COP28 has made more money than Tesla, Cyber Monday and Taylor Swift – but is it enough?
On December 4th, the COP28 summit announced that it had seen various countries and parties announce $57 billion in funding in just four days.
In a powerful demonstration of global solidarity, governments, businesses, investors and philanthropies have announced over $57 billion across the climate agenda in just the first four days of COP28.”
All a matter of perspective
To put this figure in context, bear in mind that:
- Company Tesla reported revenues of $23.4 billion in Q3 of the 2023 financial year.
- United States shoppers are estimated to have spent a total of $12.4 billion on Cyber Monday this year – more than any year before.
- Taylor Swift is estimated to have a personal net worth of roughly $1.1 billion following the success of her ongoing Eras tour.
But is this eye-watering amount enough to really change the story when it comes to climate change financing?
Falling short by trillions
According to a report released by Citi at COP28 entitled ‘Unlocking climate and development finance: Creating bankable projects’, the world will need $9 trillion per year to remedy the current climate crisis – six or seven times more funding than the already sizable amount that has been raised so far.
Citi GPS head of sustainable finance, Jason Channell, said at the launch:
What we’re trying to do is answer the question how do we get capital to flow, because the capital is there, the need is there but for some reason the capital isn’t getting through. Between 2016 and 2020 $600 billion and $900 billion a year, while some estimates for last year have taken that up to $1.4 trillion. So, significant growth [has happened] but it needs to be multiples of that. Some estimates out there are suggesting we need $9 trillion a year for 2030 and beyond. So, six or seven times where we are now.”
A couple of days later, PricewaterhouseCoopers (PwC) came out with its own report findings around COP28. These ones highlighted the lack of funding for Africa specifically – in both quantity and quality.
“In mid-2022, African governments had pledged slightly more than $250 billion from domestic public funds for climate finance purposes. This accounted for roughly 10% of the $2.8 trillion needed to fulfil Africa’s share of the Paris Agreement’s nationally determined contributions between now and 2030, and to mitigate the worst impacts of climate change,” PwC said in a media release on December 7th.
PwC’s sustainability leader Lullu Krugel added that the main sources for climate finance in Africa remain loans from financial institutions, and that African countries in these scenarios typically face interest rates up to eight times higher than developed nations.
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