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October, 2021

Prepared by:

iDERA
Hon. Edwin Laurent,
Dr Sindra Sharma-Khushal
Public sector flows are Achievement of net zero
There have been a ambitions amidst a post
In the lead up to not expected to number of shortfalls pandemic recovery will
COP26, the role of sufficiently provide the
towards achieving the include a role for not only
private finance and required funding to meet
$100 billion the $100 billion
the private sector has the costs of developing
commitment by commitment in public
received considerable countries’ climate funds by developed
change adaptation and developed countries to
attention from global countries, but also for the
resilience building address the needs of
leaders. large and untapped pools
needs. developing countries.
of private finance.
1. Globally
Aligned
Standard
Setting
3. Enhanced
mobilisation
into
developing
countries
2. Monitoring
and reporting
4. Knowledge 7. More
and best ambitious
practice government
sharing climate policy
6. A deep and
liquid global
market for
carbon credits

5. Returns
Increasing Net Zero Standards- Governments of developed countries have
increasingly begun to introduce net zero standards for reporting climate risks and
opportunities. For example, in June 2021, the G7 announced their backing to make
climate risk disclosure mandatory according to the existing recommendations made
by the Task Force on Climate-related Financial Disclosures (TCFD).

A Growing Private Sector Response- Private sector companies in these countries


are in turn expected to and have begun setting their own net zero targets and
private finance companies are coming together to set industry standards via global
networks such as GFANZ (Carney, 2020).

Expected Implications to Developing Countries- Overall, improved reporting, risk


management and measures in developed countries are expected to benefit
developing countries, but it is not yet clearly indicated how (Carney, 2020).
Geopolitical developments- In response to China’s Belt and Road Initiative (BRI- which in
recent years has shown significantly declining investment trends), the G7 in June 2021
announced its ‘Build Back Better World (B3W)’ initiative as an alternative to the BRI to
help narrow the $40+ trillion infrastructure need in developing countries, including in SIDS
(The White House, 2021). The initiative involves catalysing private capital to invest in
global infrastructure. Climate forms one of the B3W’s four core focus areas (CSIS, 2021).

Climate finance de-risking platforms- these blend private and public finance and have the
potential to offer the scale of investments at the pace needed in SIDS when coupled with
an enabling policy and regulatory environment (UNDP, 2017). For example, the SDG
Investor Platform launched in April 2021 (UNDP, 2021).

The COP 26 Finance Hub- recognised international private financial flows as critical to
supporting the financing gap in developing countries. However, it also acknowledged that
the necessary private financial flows to developing countries were still limited (Carney,
2020).
THANK YOU
iDERA
Find the full paper on our website under Prepared by:
‘Our Work’: Dr Ginelle Greene-Dewasmes,
https://www.ideraltd.com/ Hon. Edwin Laurent,
& Dr Sindra Sharma-Khushal

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