Fighting climate change with smart finance: Pakistan and Cambodia show the way in Asia
Two years ago, the world agreed that action to combat climate change was essential. However, now the problem is how to finance and realise the 170 individual country pledges made as part of the Paris agreement.
What is needed is not necessarily just more funding, but better use of existing finance – and it is in Asian capitals like Phnom Penh, Islamabad and Kathmandu that some of the most innovative work is occurring.
Climate stresses, such as violent storms, desertification or drought typically bring negative social and economic impacts. These amplify food, water and energy scarcities, and even trigger public health emergencies and social unrest. The effects are already being felt across the world. And it’s likely to get worse, especially in Asia’s emerging economies.
In fact, an Asian Development Bank study predicts that losses in Southeast Asia from the impact of climate change could reach 11 per cent of gross domestic product by the year 2100. Countries like Pakistan and Nepal face the spectre of seeing years of hard-won gains in poverty reduction and economic equality being rolled back by climate-related stresses.
To avert such a scenario, developing countries throughout Asia and the Pacific need external support. At least US$100 billion in new climate funding will be mobilised yearly to achieve global targets.
For more equitable and effective financing, integrated and efficient financing frameworks are required. Countries like Pakistan are leading by example – having adopted a climate finance management strategy to ensure climate goals are integrated into its own financial management system.
In Cambodia, a similar “climate change financing framework” is allowing the government to estimate the economic impact of climate change and clearly map the cost of their response. Budget data is enabling the government to make a stronger case for international assistance to meet their climate goals.
Much work still needs to be done. But the recent progress we have seen highlights how countries can apply more cents and sensibility to climate finance. Asia’s pioneering efforts provide a critical example that can be replicated across the globe.
Valerie Cliff, deputy director, UNDP Regional Bureau for Asia-Pacific, director, UNDP Bangkok Regional Hub; and Glenn Hodes, climate policy and finance specialist, UNDP Bangkok Regional Hub