6 Nov 2022
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The road to COP27 Series (4/4)

By EY Malta

Multidisciplinary professional services organization

6 Nov 2022

Funding climate change mitigation and adaption measures  

In previous articles within this four-part series on COP27 we discussed climate change adaptation, the creation of carbon markets and sustainable agriculture. This fourth and final article in this series linked to COP27 discusses climate finance, that is, financing climate adaptation and climate mitigation action.

Finance remains a key thematic for discussion, given its importance in climate change action.  Originally, way back in COP15 it was agreed that developed countries pledge $100 billion of climate finance, provided on a yearly basis by 2020. However, the 2021 Glasgow Climate Pact noted that, with deep regret, this target was not reached, pushing it forward to 2023. Discussions were held for the provision of funds and compensation for loss and damage arising out of climate change. During the Bonn CC Conference that took place in June 2021, it was noted that major political decisions for the provision of finance for loss and damage will need to be taken during COP27. Increased transparency and easier access for developing countries to obtain such finance will be key.

Ultimately, the Glasgow Climate Pact also urges developed countries to “at least double their collective provision of climate finance for adaptation to developing country parties from 2019 levels by 2025, in the context of achieving a balance between mitigation and adaptation”.  There is, therefore, the need for increased finance for countries to have funds available in the eventuality that they are faced by the climate change effects, but that could also potentially lead to damage in the country’s infrastructure, habitats and economy. Such effects could include rising sea level, heatwaves and frequent droughts. Most developing countries, however, do not have the opportunity and resources to be able to keep finances readily available for mitigation and adaptation purposes even though they are ultimately some of the hardest hit. Therefore, it is a must that developed countries keep to their commitments and pledges to provide finance to these developing countries. Hence, loss and damage financing is crucial, to be able to react to climate impacts. Ultimately it is needed for communities to endure and recover from such impacts.

Being classified amongst the Non-Annex I Parties, Malta is recognized by the Convention as being especially vulnerable to the adverse impacts of CC, and/or to the potential economic impacts of climate change response measures. Malta’s ‘Health and Climate Change’ country profile for 2021 highlights that Malta could potentially face a number of health risks such as ‘heat-related illnesses’, ‘respiratory illnesses’ and could have an effect on health systems. In fact, it is estimated that the projected change in annual premature deaths due to long-term exposure to heat in Malta would be 113 deaths in 2050, when compared to 50 deaths in 2010. Other risks could include food safety and security problems leading to malnutrition and foodborne diseases.

Though to a much smaller scale, Malta also provides support to developing countries for mitigation and adaptation actions as well as capacity building. Malta must also work on its own climate change mitigation and adaptation. Similar to other countries, Malta has set goals and commitments to aid in the mitigation of and adaptation to climate change. National climate commitments are crucial in setting goals to reduce national emissions and adaptation against climate change. During COP26, when new national determined contributions (NDCs) were reported, it was highlighted that reporting will now be more consistent and transparent across countries through an enhanced Transparency Framework, with common reporting requirements for the National Inventory Submission and the Biennial Transparency Report as from December 2024.

For any response measure to work, there needs to be nation-wide awareness on climate change. Such awareness would empower all members of society to participate in climate action through a diverse number of ways. Education and awareness building across all levels of society is considered crucial to set the wheels in motion – ranging from formal to informal methods - by both public entities and within the private sector itself.

Looking ahead, it is imperative that science-based reports keep being taken into consideration and are reflected in the decisions made by policymakers and governments. As echoed in the latest CC conference in Bonn, “Governments need to more urgently act on the stark warnings we have been hearing”.  Global stock-takes will mark progress made in areas such as mitigation, adaptation, finance flows, loss and damage and response measures, along with the means of implementation and support. The results obtained will then enable countries to update and enhance their climate actions and pursue recommendations before submission of their next NDCs, while serving as an update for all signatory parties until COP27.

While businesses and governments are already taking action, further collaboration is a must for climate-related targets to be achieved. We may see further decisions of a mandatory nature coming into place, but in the meantime, pro-activeness remains key – keeping abreast of thematics and formal negotiations discussed at this last COP can serve as a spring-board to further action. Creating environmentally conscious minds and a desire to contribute towards the achievement of climate-related targets will become second nature.

COP27, held in Sharm el-Sheikh, Egypt from 6th to 18th of November 2022, will be centered around climate change themes such as Mitigation, Adaptation, Finance and Collaboration. COP27 recognizes that 'just transition' remains a priority for developing countries worldwide, and that “we need to replicate and rapidly upscale all other climate-friendly solutions towards implementation in developing countries.”

Orlanda Grech and Sarah Bulteel are members of EY’s Sustainability team at EY Malta. This article forms part of a series of four articles in preparation for COP27, to be published in the coming weeks. 

Orlanda Grech
Manager
Valuation, Modelling and Economics 
orlanda.grech@mt.ey.com
Sarah Bulteel
Associate
Valuation, Modelling and Economics 
sarah.bulteel@mt.ey.com

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The road to COP27 Series (4/4)

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By EY Malta

Multidisciplinary professional services organization