Asia-Pacific countries call for innovative finance solutions to tackle impact of climate change
Bonn (ESCAP News) -- Countries in Asia-Pacific on Thursday gathered on the sidelines of global climate talks underway in
Bonn to discuss opportunities to raise ambition to meet the goals of the Paris Agreement through innovative finance
While global estimates range between US$55 trillion and $93 trillion to stay within 2C of temperature increase by
2030-35, developing countries in Asia alone need an estimated US$3.6 billion per annum up to 2030 to transition toward
net zero emissions and increased resilience.
Participants recognized that if finance is to be scaled-up to these levels, it was essential to use lending and capital
market channels to shore up resources to effectively tackle the impact of climate change. It was acknowledged that
additional support from the international community was required to support this effort.
One of the key recommendations to emerge from the meeting was the need to enable least-developed countries and small
island developing states to lower the cost of capital, provide de-risking and scale solutions, and build awareness and
capacity to overcome the barriers. Despite the challenges, some countries in Asia and the Pacific are successfully
accessing international capital markets to further climate action.
According to the certification report accompanying its latest Green Bond issue, the Republic of Fiji indicated that its
insufficient technical expertise, human resources and financial readiness represent the most material issues interfering
with its efforts and commitments to mitigate the effects of normal weather events and adapt to climate-change weather
In her intervention, United Nations Under-Secretary General and Executive Secretary of the United Nations Economic and
Social Commission of Asia and the Pacific (ESCAP), Dr Shamshad Akhtar, voiced concern that, without stronger
foundations, capital markets in the region risk losing out on the global reallocation of private funds toward
Priority measures for the region include acceptance of the widely agreed Green Bond Principles in Asia and the Pacific
and in each target country, the enforcement of disclosure and the reduction of issuance costs by borrowers, as well as
the emergence of standardized terms for financial instruments.
Dr. Akhtar highlighted the importance of facilitating the emergence of a pipeline of specific projects that can be
financed through green finance instruments.
“In a world awash with capital, it is paradoxical that finding sound investment opportunities remains a stumbling block.
By building a pipeline of specific projects that can be financed through green finance instruments, the region will be
equipped with a credible investment proposition for global private capital,” she said.
Equally important was the need to supplement the emergence of green projects with a grant facility to make up for the
capital markets’ shortcomings in the target countries. Dr. Akhtar underscored that many private borrowers risk foregoing
the opportunity of raising funds through international bonds or loans, while relying on comparatively scarcer bank
loans, given the additional burden put on them by international guidelines.
“Through a grant facility, the region could solve many of these shortcomings and support the emergence of a pipeline of
new bond issues, while building up its local capital markets, thus capitalizing on such a development to create a
positive feedback loop for longer term economic and social growth,” she added.
The meeting concluded with participants agreeing on the need to develop a clear Regional Action Agenda that unifies
climate ambitions with making finance flows consistent with a pathway towards low greenhouse gas emissions and
climate-resilient development. To this end, ESCAP proposed, in partnership with UNFCCC and others, to support the
formulation and implementation of a Regional Action Agenda. Further consultations on this would take place at the
upcoming Asia-Pacific Climate Week, which will convene several hundred stakeholders from the public and private sector
stakeholders to identify the region’s priorities, and who needs to do what, and when, to scale-up finance for climate