ESCWA: Arab States need more than $570 billion to finance climate action

Beirut, November 17, 2022 – The Arab region is highly vulnerable to climate change, which affects both rural and urban communities and has socio-economic and environmental impacts. These impacts are expected to worsen over time and bring new risks to security and stability. To increase its resilience, the region should strengthen its adaptive capacity by increasing climate finance by more than $570 billion through 2030. These are some of the key messages of a new policy brief, titled “ Climate Finance Needs and Flows in the Arab Region”, by the United Nations Economic and Social Commission for Western Asia (ESCWA).

Currently, a significant number of Arab countries have limited fiscal space, which limits their ability to meet spending commitments or allocate additional funds for climate action. It is further constrained by public debt which reached an all-time high of $1.4 trillion for the region in 2020. This trend has been exacerbated by national efforts to combat the impact of the COVID-19 pandemic in plus recent interest rate hikes, current inflation. pressures and the war in Ukraine.

Another issue is the weak international public commitments to climate finance in the Arab region and the imbalance between the provision of debt finance and the need for more grants. Over the past decade, Arab states have received a total of $34.5 billion in international public climate finance, less than 6% of their estimated needs for the coming decade, with loans totaling $30 billion. dollars, i.e. more than 7 times the amount of the grants. ($4 billion). Flows towards mitigation were also 3 times greater than flows towards adaptation, while Arab countries expressed a priority for adaptation interventions.

“Only 11 Arab countries have provided cost estimates of their financial needs to implement climate projects in line with their commitments under the Paris Agreement,” explained Rola Dashti, Executive Secretary of ESCWA. “To receive funding, it is important that all countries quantify and articulate their funding needs. Tailored support can help develop the ability to do this,” she added.

According to the note, there are also imbalances between the distribution of funds between countries, with the six least developed countries receiving only 6.6% of climate finance support, and between sectors. While the water and agriculture sectors remain an adaptation priority in the region given their sensitivity to climate change, the energy sector received twice as much support between 2015 and 2020 compared to to the water sector, and almost 5 times more support than the agricultural sector.

“Barely 4% of climate finance in the region comes from climate funds. We need tailored efforts to build the capacity of relevant stakeholders to increase access to these funds,” Dashti recommended.

As the private sector has shown increasing interest in financing green and climate action projects, the brief further recommends de-risking private sector investments through credit guarantee schemes or public-private co-financing. to attract the necessary additional financing from the private sector. sector.

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About ESCWA

ESCWA, one of the five regional commissions of the United Nations, supports inclusive and sustainable economic and social development in the Arab States and works to strengthen regional integration.

/Public release. This material from the original organization/authors may be ad hoc in nature, edited for clarity, style and length. The views and opinions expressed are those of the author or authors. See in full here.

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