The UN Climate Change Conference (COP28) held in the UAE, witnessed a series of pledges announced by governments, companies, investors, and charitable institutions. The pledges they made amounted to about AED210 billion dirhams ($57 billion) during the first four days of COP28. On the first day, a very important agreement was reached to activate a global climate fund. The fund focuses on addressing the losses and damages resulting from climate change. It was followed by a range of announcements and pledges across all climate action priorities, including finance, health, food, nature, and energy.
$30 billion Climate Investment Fund at COP28
Concerning climate finance, the UAE launched a Climate Investment Fund worth AED110 billion ($30 billion), called altérra. The fund focused on attracting and stimulating private finance in the countries of the Global South.
The UAE also announced the allocation of AED735 million ($200 million) from the IMF Special Drawing Rights reserve to the IMF Resilience and Sustainability Trust. That is to strengthen climate resilience in developing countries. Moreover, the country allocated AED550 million ($150 million) for water security.
$9 billion from the World Bank
The World Bank announced an increase of AED33 billion ($9 billion) annually to finance climate-related projects. Additionally, in the first forty-eight hours of COP28, after activating the fund to address climate change damage, the total amount of its pledges exceeded AED2.5 billion ($725 million).
Climate pledges at COP28
In addition, a pledge of approximately AED12.8 billion ($3.5 billion) was announced to replenish the Green Climate Fund. The conference also witnessed a pledge of AED9.9 billion ($2.7 billion) for health. The World Bank also announced a commitment of about AED9.5 billion ($2.6 billion) to develop food systems. Moreover, participants pledged another AED9.5 billion ($2.6 billion) to protect nature and AED1.7 billion ($467 million) for climate action in cities. Furthermore, AED4.4 billion ($1.2 billion) were allocated for relief, recovery and peace.
Pledges in the energy sector
In the energy sector, AED9.2 billion ($2.5 billion) was collected to increase the production capacity of renewable energy sources. AED4.4 billion ($1.2 billion) was allocated to reduce methane emissions. Additionally, an amount of AED2 billion ($568 million) was also pledged to stimulate investments in the manufacturing of clean energy equipment.
Eight new announcements
Eight new announcements were launched that will help develop various aspects of the global economy. These novel announcements include areas such as health, food systems, sustainable agriculture, and climate action. They seek to enhance the production capacity of renewable energy sources and raise energy efficiency. Moreover, they involve initiatives to reduce emissions from emissions-intensive industries.
Three additional declarations will be made over the next few days on hydrogen, refrigeration, and gender. The increasing number of countries supporting these declarations and pledges demonstrates the success of COP28’s efforts to host a more inclusive version of the COPs.
Providing financing facilitation worth AED1 trillion
Meanwhile, the Central Bank of the UAE (CBUAE), in cooperation with the COP28 presidency, organized a global event during the conference’s Finance Day. The event supports sustainable financing solutions and encourages international cooperation to achieve a sustainable future.
During the event, the UAE Banking Federation announced the banking sector’s initiative to provide financing facilities worth AED1 trillion.
This event, which was organized in cooperation with the IMF, was attended by Kristalina Georgieva, managing director of the IMF. Ravi Menon, managing director of the Monetary Authority of Singapore also attended. Additionally, Mark Carney, U.N. special envoy for Climate Action attended the event. Moreover, COP28 hosted experts, specialists, and financial institutions from around the world.
Role of the fiscal system in developing green finance
In his opening speech, Khaled Mohamed Balama, governor of the CBUAE, stressed the importance of the role the UAE’s financial system plays in developing green and sustainable finance. He focused on its role in achieving growth and development, supporting innovative solutions, and protecting flexibility. Moreover, His Excellency noted the importance of technology in achieving sustainable development goals. Thus, sustainable finance can harness digitalization and innovation to make progress more accessible, efficient, and cost-effective. It helps advance the global transition to sustainability and adaptation to climate change.
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The most prominent pledges in COP28
The most prominent pledges and announcements made to this date are:
- The Global Renewables and Energy Efficiency Pledge: 119 countries endorsed this pledge.
- The COP28 UAE Declaration on Agriculture, Food, & Climate: 137 countries endorsed this pledge.
- The COP28 UAE Declaration on Climate and Health: 125 countries endorsed this pledge.
- The COP28 UAE Declaration on Climate Relief, Recovery & Peace: 74 countries and 40 organizations endorsed this pledge.
- The COP28 UAE Declaration on Climate Finance: 12 countries endorsed this pledge.
- The Coalition for High Ambition Multilevel Partnerships (Champ) Pledge: 64 countries endorsed this pledge.
- The Oil and Gas Decarbonization Charter: 51 companies endorsed this pledge, representing 40 percent of global oil production.
- The Industrial Transition Accelerator: 35 companies and six industry associations endorsed this pledge. This includes the World Steel Association, International Aluminium Institute, Global Renewable Alliance, Global Cement and Concrete Association, Oil and Gas Climate Initiative, and International Air Transport Association.
The COP28 Presidency is encouraged by the solidarity of parties and non-state actors who are stepping up to show political and financial support. The Presidency team announced that they will continue to push all parties and stakeholders to step up with more action and more contributions.
Financial pledges and contributions
The distribution of financial pledges and contributions so far is as follows:
- Loss and Damage: $725 million
- Green Climate Fund: $3.5 billion (increasing second replenishment to $12.8 billion)
- Renewable Energy: $2.5 billion
- Technology: $568 million
- Methane: $1.2 billion
- Climate Finance: Over $30 billion from UAE (plus $200 million in Special Drawing Rights and an increase of $9 billion annually from the World Bank)
- Food: $2.6 Billion
- Nature: $2.6 Billion
- Health: $2.7 billion
- Water: $150 million
- Relief, Recovery and Peace: $1.2 billion
- Local Climate Action: $467 million
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