Overview of Major Trends in Sustainability Finance in SEA from AlterCOP29

The following are notes of the presentation delivered at AlterCOP29, on the 14^th November 2024.  These are my opinions, as President of Red Sycamore. 

Red Sycamore were at the United Nations Framework Convention for Climate Change’s 28^th Conference of Partners, in November 2023.  While there, the team had private discussions with: government representatives, central bankers, representatives from financial institutions and major corporations, and potential investors of sustainability projects. 

Our conclusion: the carbon credit system, and sustainability finance, as a whole, needs to evolve.  Consider this: the Loss and Damage Fund was established to assist developing countries particularly vulnerable to the adverse effects of climate change.  Current efforts and pledges fall short of what is needed.  As of September 2024, a total of U$S702 million has been pledged to the fund by 23 contributors.  Countries like France, Italy, Germany, and the UAE have pledged significant amounts, with each contributing at least US$100 million.  According to a UN report, developing countries will need US$300 billion per year by 2030, and US$500 billion by 2050 to adapt to climate change.  The 2022 Adaptation Gap Report indicates that international adaptation finance flows to developing countries are five to ten times below estimated needs. 

The projected loss of GDP due to climate change varies by region and scenario.  According to recent reports, climate change could lead to a 16.9% loss in GDP by 2070.  India alone is projected to face a 24.7% GDP loss.  If no mitigating actions are taken, the global economy could lose up to 18% of GDP by 2050.  If we assume a projected GDP loss of 18% by 2050, considering that as of 2024, the global GDP is approximately US$100 trillion, the projected loss in is US$18 trillion.  These numbers assume high emissions scenarios.  The Loss and Damage Fund does not have near enough to address this, even if we assume that it is only used for infrastructure development to address climate change, which is fanciful.  We are all stakeholders of this planet.  Sustainability finance needs to be democratised.  This presentation is an overview of the issue.  It is not meant to answer the questions in detail, but to continue the conversation, and bring more stakeholders to the table.