Collective action on climate finance urged

Asia needs collective and sustainable action to meet its green finance needs, experts have said, as negotiations at the COP29 UN climate change conference get underway to set a new global financing target for supporting related mitigation and adaptation.

"The fight against climate change is going to be won or lost in Asia," said Gulshan Vashistha, a climate change and sustainable finance expert based in Seoul.

As Asia has a high potential to address both mitigation and adaptation needs, the key areas that need funding in the region's climate transition include renewable and clean energy, with countries looking at adaptation and resilience in a stronger manner, Vashistha said, adding that innovative financing mechanisms are also important.

As representatives of countries from around the world have gathered at the 29th session of the Conference of the Parties to the United Nations Framework Convention on Climate Change in Baku, Azerbaijan, the draft text for the New Collective Quantified Goal, one of the main deliverables of the meeting, was published as a workable basis for discussion on a new climate finance goal.

COP29 is also called the "climate finance COP". The draft came as the previous annual financing goal of $100 billion will expire in 2025.

An independent high-level expert group said in a report on Nov 14 that the targeted annual figure would need to rise to at least $1.3 trillion a year by 2035.

Ambitious target

Simon Stiell, executive secretary of the UN Framework Convention on Climate Change, said at COP29 that setting an ambitious new climate finance target is crucial for the well-being of all nations.

"Asia is lining up in a big way on sustainable finance, which is issuing green bonds and issuing sustainability bonds and social bonds," said Vashistha, pointing out that areas such as urban planning and sustainable transportation also require collective action.

Noting that countries at COP29 also endorsed the global carbon market framework, a key step toward launching a UN-backed mechanism that will allow countries to trade on carbon credits to realize their climate goals, Vashistha said such mechanisms will be key to bridging the gap between investments and quality climate projects.

The endorsed standards are a significant advancement that will boost transparency and accountability to attract investor confidence, said Farhad Taghizadeh-Hesary, associate professor of economics and finance at Tokai University in Tokyo.

"Establishing both an international carbon market and a global carbon taxation system is essential for achieving net-zero emissions," said Taghizadeh-Hesary, who is also chief economist of Hong Kong-based sustainable finance consultancy Climate Finance Asia.