Global financial institutions are starting to make bigger commitments to finance climate solutions in emerging markets. But the money may be coming too slowly and too late to make the changes needed to keep the world from perilous warming.
Around $1.2 billion in funding commitments have been made in the past week alone after developing economies railed against wealthy nations for failing to live up to the funding commitments made during the last round of climate negotiations.
Wealthy nations were supposed to provide $100 billion in funding by 2020 and only managed to hit $80 billion last year. At the rate of past commitments, wealthy nations wouldn't hit their funding goals until 2023.
That may not be fast enough.
But things are starting to change. Last week Blackrock, the massive investment firm that controls nearly $9.5 trillion in assets, led a consortium of investors in setting up a $675 million fund that's focused on developing renewable energy projects in emerging markets.
Earlier this week, the European Investment Bank, an international development bank, and Allianz Global Investors, a private firm that has about $727 billion that it manages, put together a $574 million investment fund to invest in renewable energy projects in developing economies.
Called the Emerging Market Climate Action strategy, the investment vehicle will back things like wind farms, solar energy projects, and hydropower developments across
"Supporting climate projects in emerging and developing countries is the key to meeting the Paris climate goals and to boosting economic activity on the ground. As the EU climate bank, we have a long experience with innovative financial instruments that mobilize private capital at scale," said the European Investment Bank's vice president, Ambroise Fayolle.
These commitments are a drop in the bucket of the $20 billion in funding that needs to come in to reach the target set for global finance.
And these issues aren't academic. These emerging economies that are most at risk from global climate change are also the nations that are least responsible for causing the problem.
Historically, the U.S. has been the largest source of carbon dioxide emissions since about the turn of the 20th century.
That's one reason why developing economies are asking the richest nations to foot the bill as they look to avoid going down the same path as they industrialize and develop.
“We can and must do more to get finance flowing to developing nations. So in the lead up to COP26, it’s vital we see further pledges from the donor community and action on key priorities such as access to finance and funding for adaptation,” said the UK politician Alok Sharma, whose heading up the global climate change negotiations slated for next week in Glasgow.
The commitments from Blackrock and the European Investment Bank keep the money flowing, but far more needs to be done.