The Middle East is known for being the world’s oil capital, but did you know that it also has the world’s highest levels of solar radiation? Harnessing the region’s solar potential could help move the region beyond the conventional oil export economy and towards a brighter, more sustainable future for the next generation. It could also help build new climate-resilient forms of agriculture, water management, and infrastructure. Given the region’s record levels of water scarcity and food import dependence, these innovations take on a greater importance.
The new Paris Agreement on climate change seeks to help countries shift to low carbon, climate-resilient pathways of development. But as countries try to implement and achieve these goals, they face a number of barriers. Some countries lack the right policies or regulations, others lack the institutional mandate, or the awareness needed to make such a shift. One of the biggest challenges is a lack of finance. How much is needed? Globally, the transition to low carbon, climate-resilient economies requires new investments of US$60 trillion between now and 2050. Government alone won’t be able to shoulder the burden, with a major role to be played by the private sector.
Nationally Determined Contributions (NDCs) under the Paris Agreement serve as national climate plans to reduce emissions and adapt to the impacts of climate change. They also elaborate the scale of finance needed to take action. In trying to implement these plans, countries face obstacles to engaging the private sector as a source of climate finance. Technical, regulatory, financial, and informational barriers all increase the risks for private investors. So what can countries do to reduce these barriers? Governments can put in place new policies that address these various investor risks, and work with the finance industry to become an enabler of climate action through partnership. Partnerships with institutional investors and the private sector will be essential to meet the challenge of implementing NDCs.
To help our local partners, UNDP, the UNs largest provider of grant assistance for climate action, and the UNEP Finance Initiative, with its network of hundreds of financial institutions including banks, insurers, and investors, are partnering with the League of Arab States, the Arab Water Council, UNISDR and WFP to set up a new regional platform for action – the SDG-Climate Facility. Serving as a foundation for its many other areas of work, the Facility will have a core focus on developing country capacities to enact new policies and operational frameworks that ‘de-risk’ climate investments, and to do so in a way that brings co-benefits for many pressing challenges aligned to the Sustainable Development Goals (SDGs) - poverty reduction, women’s empowerment, rapidly growing cities and more frequent climatic disasters.
The Facility will bring together the UN, Government regulators and policy-makers, the finance industry, and private sector investors to explore local priorities for expanding climate investments. What this means on the ground is that gaps in climate finance can be identified and public-private partnerships formed to target new investments. The Facility is designed to help countries design new policies, and open up the space for investor participation in projects. Projects on solar solutions, for example, can help achieve low-carbon goals while also energizing schools, clinics, and other social services with benefits for the poor. Support will also help mobilize instruments like green insurance and bonds to build resilience to climate impacts. For example, climate-indexed insurance can compensate farmers when faced with droughts, build resilience and stability, and prevent a slide into greater poverty.
As countries in the Arab region move ahead with the implementation of the Paris Agreement on climate change, the UN is stepping up to help them put in place the right policies and to mobilize the finance needed to take action. Doing so in a way that brings SDG dividends for the most vulnerable in society can help create a better future for both people and the planet.