Current investment in mitigation is “inadequate and unfair”, researchers involved in the Intergovernmental Panel on Climate Change have found.
In a research paper published last week and shared with ESG Clarity, an international team of researchers tested how global investment could be fairly divided between regions.
Cost-effective mitigation investments require recognition of differentiated responsibilities, capabilities, and needs to yield an equitable outcome and be realised, the paper said. The team has developed a tool that allows for selection and weighting of equity considerations and corresponding indicators to show how investment can be divided fairly.
“We find that $100bn pledged for mitigation and adaptation from the developed to the developing countries is insufficient to leverage the scale of financing required to meet the long-term temperature target fairly,” said IIASA energy, climate, and environment program director Keywan Riahi, one of the co-authors of the study.
“Even under the most favourable fairness assumptions for the rich countries, the global finance flows to the developing countries needs to be scaled up to $250bn to $550bn per year.”
The researchers found that flows from North America and Europe to other regions would have to increase substantially relative to present levels to meet the Paris Agreement goals under most equity considerations. They estimated that the financial flow required under the selected equity considerations ranges between $250bn and $1.5trn annually.
“We are in the acceleration phase of a range of mitigation technologies. If we are to deploy them at the speed required for our climate targets, we have to make sure that they also happen at scale in poorer regions of the world,” said Christoph Bertram, a researcher at the Potsdam Institute for Climate Impact Research and a study co-author.
Setu Pelz, a study co-author and researcher in the IIASA Transformative Institutional and Social Solutions Research Group, added: “This is a crucial opportunity for governments to signal to one another and to the private financial sector the magnitude and direction of the necessary financial flows.”