Global economic and financial leaders recently gathered in the latest edition of the Alternative Investment Management Summit (AIM). Hosted by Dubai, the event put the spotlight on various financial issues, notably climate finance. It also emphasized the role the investors from the Middle East and North Africa (MENA) region play.
The need for substantial investments
In his opening keynote, Badr Jafar emphasized how critical the private sector is in rectifying climate finance. They take on a vital role in ensuring accessibility, affordability and equity in investment and financing mechanisms. Jafar is the chief executive officer of Crescent Enterprises, a multinational company based in Sharjah, United Arab Emirates (UAE). He also serves as COP28’s special representative of Business & Philanthropy.
“With the COP28 Presidency placing business center stage, let us use this incredible platform to raise our ambitions, create our own green agenda that is underpinned by social and economic progress, and catalyze the change we need to see for the sake of our businesses, our society and our planet,” he said.
Moreover, he stressed the need for a substantial global investment of $4 trillion annually to achieve net zero emissions by 2050 and prevent temperatures from exceeding 1.5 degrees Celsius. He also highlighted the requirement for developing countries to secure $2.4 trillion in annual investments through 2030 to fulfill the goals of the Paris Agreement.
Meanwhile, another $8 trillion investment in nature is needed by 2050 to combat biodiversity loss and land degradation.
Read: Green Finance initiatives in the Middle East
Climate finance in MENA
In his address, Jafar also underscored the vulnerability of specific regions, including MENA. In MENA, countries experience water scarcity and temperatures that rise twice the global average. These situations could indicate increased droughts and extreme weather events affecting hundreds of millions.
Historically and presently, MENA only accounts for less than 1 percent of global carbon emissions both historically and presently. However, experts consider the region as one of the least climate-resilient areas in the world.
Addressing the scale of the challenge, Jafar added that the private sector’s ingenuity and capacity are indispensable in tackling these issues.
“What is increasingly clear, is that there is no way we will come anywhere close to meeting this challenge without the ingenuity and capacity of the private sector,” said Jafar.
“Which is why COP28’s President, His Excellency Dr. Sultan Al Jaber, has called for a new paradigm of actionism, which embraces the dynamism, capital, and action networks that business and philanthropy must bring to the table,” he added.
On the public sector front, governments in the MENA region have been actively promoting climate finance. They have been creating a conducive environment and introducing innovative financial instruments that support climate adaptation and mitigation initiatives. In 2020, Egypt launched the first green sovereign bond in the region, valued at $750 million and yielding 5.25 percent.
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