COP28 Summit: UN says $7 trillion spent every year on investments that fuel climate change

Every year, practically $7 trillion of private and non-private finance helps actions that instantly hurt nature – some 30 instances the quantity spent on nature-based options yearly, in accordance with a stunning UN report launched on Saturday (December 9, 2023) at COP28 in Dubai.

The report from the UN’s environmental wing, UNEP, additionally revealed that regardless of a long time of requires ending finance flows in the direction of sectors that hurt a few of humanity’s most useful property, these investments at present account for a whopping seven % of world GDP.

Saturday’s report launch comes as negotiations on the convention’s final result textual content are shifting into excessive gear – COP28 is scheduled to shut on Tuesday – and towards the backdrop of the biggest on-site motion but for climate justice. Calls for ending the world’s dependence on fossil fuels and demanding reparations for ‘loss and harm’ could be heard ringing out at Dubai’s iconic Expo City venue.

This year’s State of Finance for Nature report is the primary such survey to focus on what is called “nature-negative finance flows” and underscores the urgency to handle the interconnected crises of climate change, biodiversity loss, and land degradation.

The report, launched to coincide with a day put aside on the newest UN climate convention for discussions on nature and land use, additionally highlighted the actual fact that these investments dwarfed the annual quantity being invested in nature-based options, which totaled roughly $200 billion final year.

A staggering $5 billion of those nature-negative finance flows come from the non-public sector, which is 140 instances bigger than non-public investments in nature-based options, and virtually half of that stems from solely 5 industries: building, electrical utilities, actual property, oil and gasoline, and meals and tobacco.

‘Greening finance’

One of UNEP’s companions contributing to the report is Global Canopy, a data-driven non-profit that targets market drivers that negatively influence nature. It’s Executive Director, Niki Mardas, instructed UN News that there’s a group of corporations or monetary establishments who could also be making nature-positive investments “and making an enormous noise about that, however aren’t even clear on their publicity to nature-negative [investments], notably when it’s down their provide chains.”

He emphasised that, whereas these corporations should proceed to make constructive investments, additionally they have to do the arduous and complicated work of understanding how they’re driving the issue.

They should begin addressing that “not by getting out and never by divesting, however by partaking corporations of their portfolios, by partaking corporations of their provide chains so that they change their operations and their behaviour”.

Mardas gave the instance of countering deforestation, which is “on the coronary heart” of any effort to attain net-zero, but solely 20 per cent of the over 700 monetary establishments that made excessive profile net-zero commitments as a part of the Glasgow Financial Alliance “have taken any motion in any respect on deforestation”.

“The single largest motion we are able to take for nature, climate and other people is to inexperienced finance. We have to finance inexperienced, however we additionally have to inexperienced that $7 trillion of finance. Otherwise, we’ll all the time be caught on this loop,” he added.

Turning the tide

At a press convention in Dubai, the pinnacle of UNEP’s Nature for Climate Branch, Mirey Atallah, stated the report demonstrates that the climate disaster remains to be outpacing efforts to include it.

She stated finance is “the nice enabler, and with out cash flowing in the proper path, we can’t obtain the targets now we have set” on the 1992 Earth Summit in Rio to handle the interconnected challenges of climate change, desertification and biodiversity loss.

While the report might present very sobering conclusions, Atallah stated UNEP desires to make use of the info to indicate that the cash getting used to hurt nature can and have to be diverted to have a constructive influence and burdened that COP28 have to be the turning level.

Speaking to UN News, the UNEP official stated the continual underfunding of nature-based options is just not as a result of lack of funds, “it’s simply that the cash goes within the mistaken path”.

She stated convincing non-public corporations to make the proper investments requires putting in the mandatory authorized frameworks to help directing funds in the direction of nature-positive options.

Atallah famous that some non-public monetary establishments have already began taking climate results under consideration when approached for loans, which may also help “flip the tide of investments”.