Just Transition Needs Innovative Funding – President Ramaphosa
During the COP27 climate conference in Sharm el-Sheikh, Egypt, the President spoke at the high-level roundtable on Just Transition. The President urged commercial financial institutions to support these efforts by designing project financing instruments that consider the specific needs and circumstances of developing economies.
A “one-size-fits-all approach” will not be sufficient for financing Just Transition projects in developing countries, according to President Cyril Ramaphosa.
“We need to be bolder and more innovative in reducing project risk and crowd in private sector finance for climate and just transition projects.
“A one-size-fits-all approach to financing the transition that disregards African realties is neither just nor equitable and will not work,” President Ramaphosa said.
President Ramaphosa stated that there is a need to promote the use of non-debt instruments in order to prevent developing economies from incurring additional debt. To support transition pathways, the President also called for a just transition financing framework or a pooled financing mechanism.
He stated that this entity could act as a bridge between various funding sources and separate funds to ensure coherence in just transition financing.
“The fact that the global community was able to mobilise fiscal measures worth an estimated US$ 17 trillion within two years in response to the COVID-19 pandemic, indicates that the resources to meet climate finance commitments exist, provided there is political will.
“It is our task at this COP27 to harness the political will and mobilise the resources for the just transition. The scale of climate finance must reflect the level of ambition.”
He also stressed that African economies are losing between 3% and 5% of their GDP due to the effects of climate change.
“Our common starting point is that all parties should honour their undertakings and commitments in line with the guiding principle of Common but Differentiated Responsibilities and Respective Capabilities.
The President said, “For transitions to be just, vulnerable workers and communities need to be included in designing solutions. These same constituencies must share the benefits and not just the risks of transitions.”
Because climate transitions are whole-of-society transitions, President Ramaphosa stated that countries must establish institutions that allow government, business, civil society, and organised labour to identify vulnerable sectors and plan for their transition together.
Source: Energy Ghana