Mahmoud Mohieldin: COP27 Confirmed that Climate Finance is a Development Finance

The RPCP Initiative has created a mechanism for joint cooperation to achieve climate and development goals

Dr. Mahmoud Mohieldin, UN Special Envoy on Financing 2030 Sustainable Development Agenda, said that COP27 in Sharm El Sheikh succeeded in consolidating the principle that climate action is a development action, and stressing that working to overcome the constraints of climate finance leads to overcome the obstacles to financing the SDGs as a whole.

This came during his participation in the Third global dialogue and investment-focused event under the Sharm el-Sheikh mitigation ambition and implementation work program, held in Bon under the umbrella of the UNFCCC.

Mohieldin stated that the development financing gap is estimated at about $5 trillion according to United Nations estimates, stressing in this regard the need for accurate dependable data on which to assess the climate and development financing gaps at the national and global levels.

He explained that overcoming the obstacles of financing development and climate action must be done on four levels, the first of which is the local level, where solving the development and climate finance crisis requires mobilizing financing from domestic sources, and maximizing tax revenues and their rates relative to the GDP, which contributes to the financing of climate and sustainable development projects.

The second level, according to Mohieldin, is the need to work to overcome political and financial obstacles that limit the size and effectiveness of financing at the bilateral level and the contributions of countries to financing climate and development action. While the third level is the need to increase the capital of MDBs and adopt more effective policies to finance climate and development projects in middle- and low-income countries. With regard to the fourth level, he stressed the need to stimulate the private sector to participate in financing and implementing climate and development projects by adopting incentivizing policies that help enhancing the participation of the private sector and create favorable conditions for investment.

Mohieldin emphasized the importance of reducing the dependence of climate and development finance on debt, with the need to resolve the debt crisis in developing countries and emerging economies by restructuring them and adopting new policies for concessional finance.

He also noted the importance of reconsidering the industrial and trade policies adopted by developed countries, such as the Carbon Borders Adjustment Mechanism (CBAM) in the EU and the US Inflation Reduction Act (IRA), which would restrict the global trade movement and not help developing countries implement their green transition.

Mohieldin stressed the need to strengthen cooperation at the regional level to achieve the targets of climate and development, and underlined the importance of countries adopting a new generation of NDCs that are more practical and represent a national plan for investment in climate and development action.

He said that the Regional Platforms for Climate Projects (RPCP) has demonstrated over the past two years the ability to find mechanisms for joint cooperation globally and regionally to finance and implement climate projects that contribute to achieving emission reduction and adaptation to climate change goals at the local, national and regional levels, in a way that contributes to the global effort to achieve climate and development goals.