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By Imali Ngusale
The UAE announced a US$30 billion commitment to the newly launched catalytic climate vehicle, ALTÉRRA, that will drive forward international efforts to create a fairer climate finance system, with an emphasis on improving access to funding for the Global South.
The US$30 billion commitment is undoubtedly the world’s largest private investment vehicle for climate change action. It is envisaged that this investment will steer private markets towards climate investments and focus on transforming emerging markets and developing economies.
Whereas the UAE came under sharp criticism for being one of the largest emitters of oil and gas, the government seems not to shy away from financing for climate action in the global south. Perhaps what is now missing is a Climate Impact Framework that will ensure a positive climate transformation towards collective climate objectives, aligning with international best practices to safeguard global south industries and ascertaining that the ALTÉRRA’s climate mandate will have accountability and transparency.
Notably, the launch of this vehicle was described by COP28 President Dr. Sultan Al Jaber as a “defining moment” in the creation of a new era of international climate finance.
Dr. Al Jaber, said , “The ALTÉRRA provides a transformational solution for attracting private capital. Its scale and structure will create a multiplier effect in climate focused investment, making it a vehicle like no other. Its launch reflects the COP Presidency’s Action Agenda and the UAE’s efforts to make climate finance available, accessible and affordable.”
The ALTÉRRA will have an innovative two-part structure to spur new ideas, incentivize policy and regulatory frameworks, and identify solutions to rapidly deploy capital across the entire value chain of the new climate economy. A US$25 billion component of ALTÉRRA, will steer institutional capital towards climate investments at scale that have the greatest potential to accelerate the transition to a net-zero and climate resilient economy and the other US$5 billion component of ALTÉRRA, will provide risk mitigation capital to incentivize investment flows into the Global South, directly addressing the challenges that currently limit climate investment.
It is estimated that by 2030, emerging markets particularly those in the global south will require US$2.4 trillion every year to address climate change and that is why COP28’s Action Agenda, namely: Energy Transition, Industrial Decarbonization, Sustainable Living and Climate Technologies will determine whether the future is oblique or bright.
UAE’s track record of managing large investment platforms and successfully developing and operating renewable energy projects around the world as a trusted facilitator at the global crossroads between North, South, East and West may remain under trial until the aforementioned finances reach those disproportionately impacted by climate change.
Source of original article: Africa Science News (africasciencenews.org).
The content of this article does not necessarily reflect the views or opinion of Global Diaspora News (www.GlobalDiasporaNews.com).
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