A handful of deals aimed at reducing emissions and boosting climate resilience across developing countries have been signed on the sidelines of the Climate Finance Mobilization Forum as part of US President Joe Biden's visit to the UK.
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In a joint statement on July 11, the UK Energy Security and Net Zero Secretary Grant Shapps and US Special Presidential Envoy for Climate John Kerry, said the had gathered leading philanthropists and financiers, in a bid to boost efforts to unlock private capital and support in emerging and developing economies. The bulk of these deals focused on carbon and hydrogen.
Key announcements included a new venture formed by Japanese investment group Mitsui & Co., Builders Vision and Renewable Resources Group Partnership, which will be tasked in identifying over $1 billion of projects in emerging markets using nature-based solutions.
The projects will focus on activities such as regenerative farming, agroforestry and sustainable water management to help investors and corporations deliver on carbon neutrality and sustainability pledges via direct investment and supply chain participation, according to the statement.
Builders Vision will also commit $100 million in oceans-related investments and grants in emerging markets focused on blue carbon ecosystem conservation, ocean CO2 removal, shipping decarbonization and advancing wind energy.
The forum, which took place in Windsor, southeast England on July 10, aims to boost efforts to unlock private capital and support emerging and developing economies.
These announcements come as developed nations are under pressure to pledge more financial support developing countries ahead of the UN Climate Change Conference COP28 in Dubai, UAE, from Nov. 30 to Dec.12.
In hydrogen, the Forrest Group is to launch a project with the Green Hydrogen Standard 2.0 at COP28 aiming to ensure standards are set in a way that supports emerging economies. It is also eyeing green hydrogen production from surplus geothermal energy in Kenya.
The Green Hydrogen Standard, launched by the Green Hydrogen Organisation (GH2) in 2022, defines green hydrogen as hydrogen produced through the electrolysis of water with 100%, or near 100%, renewable energy with close to zero greenhouse gas emissions.
It "requires that hydrogen made with renewables emits no more than 1 kg of CO2e per kg hydrogen up to the point of production," GH2 said on its website. "This is a 91% reduction compared to gray hydrogen made from fossil fuels and we have committed to lower this threshold further." GH2 is an industry-backed non-profit organization that promotes the rollout of green hydrogen and ammonia.
Other deals included LeapFrog Investments pledging to investing $500 million in companies that are addressing climate change in Africa and Asia.
The Sustainable Market Initiative said it will launch a new investment vehicle, the Terra Carta Accelerator Fund, which will initially start with a target of GBP100 million, focused on natural capital projects.
Financial support to developing countries continues to be a contentious issue.
In its latest synthesis report, the UN Intergovernmental Panel on Climate Change said investment in climate mitigation and adaption would have to rise by around three to six times from current levels by 2030 to meet the long-term goal of restricting global warming by 1.5 degrees Celsius.
"Increased finance, technology and international cooperation are critical enablers for accelerated climate action," the IPCC said in a statement. "If climate goals are to be achieved, both adaptation and mitigation financing would need to increase many-fold."
The IPCC's 2018 report had indicated that CO2 emissions needed to be cut by almost 50% by 2030 compared with 2010 levels to avoid the worst impacts of climate change, including more frequent and severe droughts, heat waves and rainfall.
At a Paris summit on global climate financing on June 22-23, meanwhile, the World Bank said it would pause debt repayments and build catastrophe insurance without debt for emerging economies hit by extreme weather events. The next six months will be critical in building political momentum ahead of COP28 later in the year.
Under current maximum Nationally Determined Contributions' emissions reduction targets, which are conditional on international support in more than half of the countries assessed by S&P Global, global emissions would only decrease by 10% relative to 2019 levels.
"This is above the 2022 S&P Global Commodity Insights' Green Rules scenario, which is estimated to have a temperature outcome of approximately 1.8 degrees by 2100 relative to pre-industrial levels, higher than the 1.5 degrees goal set out in the Paris Agreement," the analysts said.