Devex Newswire: Charting a new path for global climate funding

At our Climate + Finance event in London yesterday, we focused on equitable financial solutions to help build resilience and address the existential threat of climate change disproportionately affecting low- and middle-income countries.

Also in today’s edition: We look at what’s needed for climate finance to reach the local level, see how overheating affects health, and listen to Mother Nature on Spotify. Plus, how optimistic is Sir Alok Sharma?

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Sharma’s glass is half full

The upcoming 29th U.N. Climate Change Conference in Azerbaijan, dubbed the "climate finance COP," marks a critical juncture. With wealthier nations finally hitting the $100 billion annual climate assistance target — albeit late and with some creative accounting — attention now shifts to setting a new collective quantified goal at COP 29.

Opening Devex’s Climate + Finance event, Sir Alok Sharma, COP 26 president when that 100 billion goal was in its infancy, struck an optimistic note. “I'm very much a glass-half-full person on this. Of course, it's tough. If it was easy, we would have solved this. But I think if you have a willingness to work together, and there is a sort of a proper spirit of collaboration, I think we can get there,” he told Devex Business Editor David Ainsworth.

Lower-income countries, however, are asking for trillions to address climate impacts, a daunting figure that underscores the need for extensive cooperation, Devex Managing Editor Anna Gawel writes. Sharma stressed the essential role of the private sector: “That is not money that is going to come from governments,” he said.

“But I think that the divergence here is that if you look at the statistics of the money going into green transition in developed economies, in advanced economies, last year around 84% was from the private sector. … In the developing world, it was 14%. So there is a huge mismatch in terms of where that money has to come from.”

To bridge this gap, Sharma called for strategies to incentivize private sector involvement and collaboration with multilateral development banks and philanthropies. He also highlighted the importance of lower-income countries creating investor-friendly regulatory environments.

Sharma urged world leaders to move beyond rhetoric: “There's an urgency here that I think world leaders particularly need to wake up to, which is that it's no good turning up and giving sort of fine speeches,” said Sharma, who is now a climate and finance fellow at The Rockefeller Foundation. “You need to now also deliver on the policy and also support the delivery of finance as well.”

Read: World must summon urgency to hit new climate goals, Alok Sharma says

Related: Climate adaptation finance must double by 2025. How will that happen? (Pro)

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Bridging the gap

What will it take for climate finance — the dollars working to address the causes and consequences of climate change — to actually trickle down to the local level?

Across the sector, there’s an understanding that communities on the front lines of climate change should be the ones calling the shots. But in 2023, just 17% of climate finance was reaching the local level, the International Institute for Environment and Development’s Rojy Joshi told the audience at the Devex event yesterday.

“Obviously, we want more climate finance reaching the local level,” Joshi said. “But the point is also about the quality of that finance, and getting more agency to the local level.”

That includes increasing community involvement and letting local leaders decide how climate financing should be spent. Making loans and grants more accessible and reducing the complexities in the application, reporting, and approval processes. And increasing the trust between local partners and donors, and building the relationships between them.

According to Jane Burston, the founder of the Clean Air Fund — a foundation that focuses on global air pollution — the ripple effects of not doing so can be enormous.

“If you leave people behind, and they think climate change is the kind of thing that only the elites can tackle, then we see the kind of thing that we did in the European Parliamentary elections just now,” Burston said. “There was quite a big swing to the far right and away from green policy because people feel like the green agenda is not for them. … I think the same is true for countries all around the world.”

Still, it’s something many organizations, governments, and institutions are working to change, notes my colleague Elissa Miolene. Joshi highlighted the Global Commission on Adaptation’s Principles For Locally Led Adaptation — which today have been endorsed by 130 governments, organizations, and institutions. There have been commitments by government donors such as USAID, which is trying to shift a quarter of its eligible funding to local entities by 2025.

And there’s the Green Climate Fund, which has set up an initiative to help 10 cities access finance directly, while also writing business cases for private investment.

“These figures are promising, but it’s happening at a slow pace,” Joshi said.

+ How has USAID been progressing on its localization agenda? Download our latest report where we present figures to highlight how far the agency is to reaching its localization target, as well as what we can expect next.

Mother Nature joins the music biz

Nature is now an official recording artist, Jorge Valencia writes for Devex.

The world’s largest streaming platforms host nature’s official accounts, featuring music created with nature sounds from around the globe. This initiative, led by the Museum for the United Nations — UN Live, aims to raise funds for conservation and inspire environmental action.

“Who’s the oldest and most underpaid artist in the world? It’s nature,” UN Live CEO Katja Iversen said at the event. “4.6 billion years old, and she never got paid for her sound.”

Another highlighted initiative is an insurance policy by The Nature Conservancy to protect Mexico’s Yucatan peninsula reef and beaches, funded by local hotels and the state government of Quintana Roo.

But perhaps the most unlikely of partnerships presented was that of recording artists officially working with Mother Nature. The project was launched in partnership with the Wildlife Conservation Society and The Nature Conservancy under the name Sounds Right. It already has 1.1 million Spotify listeners and features artists such as Ellie Goulding and Aurora, royalties will fund conservation efforts.

“When they listen, they do good,” Iversen said.

Read: Mother Nature is about to get paid for her sound

Battling the heat

And all of the above plays into this: In Freetown, Sierra Leone, women in open air markets face relentless heat, selling fruits and vegetables with little shade or hydration. These conditions not only spoil their produce but threaten their health and livelihoods, Disha Shetty writes for Devex.

Eugenia Kargbo, a senior heat strategist with Climate Resilience for All, highlights the severe impact: The “majority of the women in these markets are exposed to prolonged and extensive heat during the day, which impacts their livelihood and leads to economic losses.”

Freetown’s market workers are just a small part of a huge global crisis. An International Labour Organization report states that 2.41 billion workers worldwide are exposed to excessive heat. Heat waves are 10 times more likely in West Africa, according to an April 2024 study by World Weather Attribution.

While heat strokes are widely recognized as deadly, chronic heat exposure from everyday work can be just as fatal. Prolonged heat stress leads to various health issues, from kidney damage to hypertension, especially when workers cannot cool down properly.

Indoor and outdoor workers alike are at risk, Disha writes. Brenda Jacklitsch from the U.S. National Institute for Occupational Safety and Health explains that the combination of environmental and metabolic heat from manual labor significantly raises body temperatures, even on mild days.

The World Health Organization is ramping up its focus on the health impacts of climate change, including heat stress. WHO Director-General Tedros Adhanom Ghebreyesus emphasizes the economic benefits of climate action, noting that reducing heat exposure could save millions of lives and generate significant economic returns.

Read: As heat affects workers worldwide, health policies struggle to keep up

In other news

Under its G20 presidency, Brazil is proposing a global minimum tax on billionaires that aims to generate funds to address key global challenges such as inequality, hunger reduction, sustainable development, and reforms in global governance. [VOA]

Deadly protests erupted in Kenya as citizens rejected a controversial finance bill, demanding its full withdrawal. [BBC]

​​South Africa is risking a $9.3 billion climate finance pact by delaying the closure of coal-fired power plants, a condition of the 2021 Just Energy Transition Partnership. [Bloomberg]

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