LatAm in Focus: Who Will Foot the Bill for Climate Adaptation?
LatAm in Focus: Who Will Foot the Bill for Climate Adaptation?
The UN’s Juan Carlos Monterrey Gómez and Marsh McLennan’s Amy Barnes explain how the public and private sector are funding a green economic transition.
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It could cost up to $6 trillion a year to finance the transition away from a carbon-intensive economy.That’s over three times more than the current yearly global commitment.
What would it take to rapidly expand the amount of financing available for decarbonization, green infrastructure, and compensation for the effects of climate change?
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For one, it’ll take getting developed countries to pay their share. “It's not a question of charity,” explained Juan Carlos Monterrey Gómez, vice chair for the Implementation of the UN Climate Convention and director of the School for Biocultural Leadership at Geoversity, “This is a question of justice. It is a question of moral justice based on a historic problem that we did not cause, but we continue to suffer the most impactful and damaging effects of it.” A former climate negotiator for Panama, Monterrey Gómez explained that at successive climate summits, the developing world has struggled to get developed countries to follow through on their financing promises.
But his country, Panama, has had success at securing money for its own green transition, and a big part of that has been creating the right environment to encourage the private sector to commit to green projects. “If we don't actually get the economy behind the Paris Agreement, then there is no amount of money that will be able to cover all the losses and all the damages that we are going continue to suffer,” he explained.
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This point was also emphasized by Head of Climate and Sustainability Strategy at Marsh McLennan Amy Barnes, who detailed the conditions that the private sector is looking for to invest in the green transition. She said that certainty is key; companies want to ensure that their investments are respected and profitable. One sector where this certainty exists is renewable energy. “We know the economics of those projects work…We’re very confident and comfortable about the operation of those assets,” she said.
But Barnes said that increasingly, profit is only one factor motivating the private sector. “They would say that the sacred cow or what was sacrosanct in their investment plans is their commitment to decarbonization,” she said. This sea change toward values-based investment is helping shepherd large financial commitments to green projects and decarbonization.
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