The Editors' Post: How the impact community can plug COP's leaky canoe
Can the impact community succeed where COP28 failed on finance for emerging economies' climate adaptation? Plus, awkward questions for DFIs and stories of collaboration for impact. This week's view from the Pioneers Post newsroom.
All eyes were on COP28 on Wednesday, as the climate summit adopted the final text of a deal which for the first time calls on nations to transition away from fossil fuels in an attempt to mitigate the climate crisis.
The agreement was criticised for not including a specific obligation to phase out fossil fuels and for not requiring polluting countries and companies to deliver funding to achieve a just and equitable transition.
Senegal’s climate minister, Madeleine Diouf, speaking on behalf of the bloc of Least Developed Countries, said the agreement reflected the “very lowest possible ambition that we could accept”. She added that it “highlights the vast gap between developing country needs and the finance available…yet it fails to deliver a credible response to this challenge”.
John Silk, the negotiator from the Marshall Islands, which is just 2.1 metres above sea level, compared the final agreement to a "canoe with a weak and leaky hull, full of holes", but said "we have to put it into the water because we have no other option".
The anecdote to despondency
Clearly, this is a disheartening outcome. But an anecdote to despondency is action and the impact finance news this week presented opportunities for our community to make a significant contribution to the $4tn SDG funding gap facing emerging economies.
The members of the Impact Taskforce said 2024 must be a “pivotal year of change” for investment in emerging economies. The taskforce’s latest report highlights that private finance flows into emerging economies decreased by 22% in the last two years and only 10% of all private sector capital mobilised by development finance institutions in 2021 reached low income countries.
These figures are disappointing in and of themselves, but combined with the absence of guarantees of financial contributions for a just transition in the COP agreement, demonstrate a huge scope for positive impact to be made by investors.
Many of the Impact Taskforce’s recommendations are for development finance institutions (DFIs), which are also subject of discussion in the latest in our Awkward Questions series. Jesse Clain, a VC investor based in Somaliland, says even though DFIs provide billions of dollars of capital every year to underinvested parts of the world, they do almost nothing to support early-stage entrepreneurs in need of venture capital.
Further exploring how private capital can be mobilised for impact in Africa, Joanne Manda from the UNDP writes that we need guiding frameworks and standards, developed by Africans, to convince more investors to take up opportunities in the continent.
Before COP, Catherine Nakalembe, who heads the Africa programme of Nasa Harvest, told the Guardian that 70m more people in Africa are projected to suffer acute food security at 2C than 1.5C. Every kilogram of CO2 matters and although the impact community can’t fight the climate crisis alone, it can certainly help plug some of those holes in COP’s leaky canoe.
This week's top stories
Top photo: Samia Suluhu Hassan, President of the United Republic of Tanzania speaks onstage at the Adaptation Finance Summit for Africa during UN Climate Change Conference COP28 (credit: United Nations Climate Change, Flickr)