COP28: Global climate investment must hit £3.5 trillion during ‘decisive decade’
Global climate investment needs to rise to $3.6 trillion (£2.9 trillion) by 2026, Allianz Trade has said, ahead of the COP28 environmental summit this week.
The fortnight-long conference will begin on Thursday in Dubai, hosted by the United Arab Emirates, with scores of world leaders and delegates from almost 200 nations set to attend.
It’s set to be the biggest annual climate congress held under the 1995 UN convention on climate change, with Prime Minister Rishi Sunak set to arrive in the Middle East on Friday.
However, there are warnings the world has made “alarming” slow progress to achieving the Paris Agreement – a legally binding treaty aiming to keep temperature rises well below 2C.
Credit insurer Allianz Trade say investment worldwide needs to hit $3.6 trillion (£2.9 trillion) in just two years and reach $4.4 trillion (£3.5 trillion) by 2046, as they called the next 10 years “the decisive decade”.
Analysts said: “This implies a staggering investment need of approximately $5,000 (£3,900) per ton of annual CO2 emissions.
“Without applying any discount and disregarding impacts on operational costs, while assuming a social cost of carbon at $200 (£159) per ton of CO2e, this level of investment would become financially viable after 25 years.”
It comes after the UN’s top climate official Simon Stiell warned that leaders have to “stop dawdling and start doing” when it comes to carbon emission cuts.
He told the Guardian: “We’re now at the point where we’re all on the frontline. Yet most governments are still strolling when they need to be sprinting.”
COP28 will focus on energy transition, climate finance, adaptation and resilience and inclusivity, with a goal of tripling global renewable-energy capacity by 2030.
Decarbonisation, capture and storage and cutting methane emissions are crucial targets, while getting the loss and damage fund – established at COP27 with the promise of wealthy nations providing $100bn (£76bn) a year to poorer countries – is a key climate finance priority.
The COP28 summit marks the conclusion of the first global stock take, which evaluated progress on the 2015 Paris Climate Change Agreement.
But net-zero emissions is “no longer even a viable goal”, Allianz analysis found, with the “window of opportunity” to hit the 1.5C target via mitigation having “already closed”.
A briefing by Ludovic Subran, chief economist, stated: “The global economy has made alarmingly slow progress towards achieving the promises of the Paris agreement.
“The global economy would need to cut carbon emissions nearly -13 per cent every year from 2025 to 2033. The pandemic in 2020 only managed to reduce [them] -7 per cent.”