Wednesday, July 3, from 3-5 pm:
Focusing on “Scaling Up Low-Carbon and Resilient Investment in the Face of Climate Vulnerability” the SOAS Centre for Sustainable Finance, the V20, and MCII will hold a joint event during the London Climate Action Week.
Over the last decade, climate vulnerability has cost the V20 group of climate vulnerable countries an additional US$62 billion in interest payments alone, according to a recent UN report on Climate Change and the Cost of Capital in Developing Countries. Additional interest payments due to climate vulnerability are projected to increase to US$168 billion over the next decade. For every US $10 paid in interest by climate vulnerable countries, an additional dollar will have to be spent due to climate vulnerability. These payments are separate from economic losses directly suffered from climate change.
The problem of higher cost of capital faced by climate vulnerable countries impedes these countries’ ability to invest in climate change mitigation and adaptation measures. As a result, sustained GDP growth and fiscal stability in climate vulnerable countries will be under threat. One element corroborating the cost of capital problem relates to the increased pressures put on V20 countries’ fiscal budgets due to sudden-onset events. In the V20 group of climate vulnerable countries, current climate risk obligations lie mainly with national and subnational governments, which reduces fiscal space and obfuscates public debt management.
To address these challenges, a new financing mechanism – the Accelerated Financing Mechanism (AFM) – has been proposed by the members of the V20. Based on an assessment of the specific sources of risk affecting capital cost, the suggested mechanism would enable appropriate risk mitigation tools to render applicant projects in V20 economies financially viable. The mechanism itself would be financed from different international and regional sources. The V20 have also been working with global partners on climate and disaster risk finance and insurance schemes as a response to an increasing exposure to climate risk.
This session will discuss both the challenges and opportunities surrounding low-carbon and resilient investment in the face of climate vulnerability, including V20 initiatives and other initiatives aimed at leveraging private sector finance and alleviating the financial burden put on governments ex-post disaster.
Following key notes by the Director of the SOAS University of London, the Ambassador of the Republic of the Marshall Islands, and the Chairperson of the Global Environment Facility, the event will feature brief introductions of V20-led implementation initiatives, before diving into discussion with a high level panel, featuring Soenke Kreft from MCII.
To access further information and to register for the event, please CLICK HERE.