More than 40,000 international experts met in Glasgow at COP26 to find solutions to curb global warming.
They agreed that forest and wetland conservation measures are unthinkable without financial resources to boost the competitiveness of local communities and guarantee the maintenance of natural spaces, Portafolio reported.
Similarly, to obtain clean energy, large investments are needed, for example, in solar panels, wind farms and wind turbines, among others.
Globally, investments in energy projects must double to US$5.0T by 2030 to meet the challenge of becoming carbon neutral by 2050. In parallel, by 2050, the world needs to invest US$8.1T to protect natural ecosystems and biodiversity.
Green finance in Latin America reached almost CoP$8.0B in 2019, but the figure is still far from covering the gap of at least US$110B that the region needs to adapt to climate change.
The report said that it is essential to adopt new financial instruments that, on the one hand, guarantee current financing and, on the other hand, attract new investments from the private sector.
One of the most promising trends for climate finance is the carbon market. These markets are not yet regulated and agreement between countries at COP26 will be crucial for their reactivation.
“Carbon markets are a great opportunity for Latin America and the Caribbean, as they are an efficient system to achieve climate finance. The region’s large natural ecosystems play in our favor, as they are fundamental to preserve the global climate balance,” said Jorge Arbache, CAF’s Vice President for the Private Sector.
CAF announced that over the next five years it will allocate US$25B to finance green operations to help countries in the region meet their environmental and climate commitments.
The organization has set out to become the region’s green bank, and is currently accredited with the main green funds for global financing, such as the Adaptation Fund, the Global Environment Facility (GEF) and the Green Climate Fund (GCF).
Bottom-Line: The energy transition requires enormous resources, and the participation of all economic sectors will be essential to make progress on this important issue.
CAF’s support will undoubtedly be fundamental to achieving the region’s climate objectives.