“It always seems impossible until it is done,” Nelson Mandela as quoted by UNFCCC Executive Secretary Simon Stiell at the start of the conference.
This is the Asian Infrastructure Investment Bank’s (AIIB) climate team’s final blog from COP27. For two weeks, the AIIB delegation represented the Bank and our climate commitment through events and meetings with government representatives, the private sector and institutions. The COP negotiations took place in parallel and on the final days, negotiators were in overnight sessions. There were more than 100 heads of state and governments and over 35,000 participants attending.
AIIB came to COP27 with specific messaging on mobilizing finance and technology as a key solution to address climate change and the need to scale up adaptation and resilience financing, including through capital markets. We delivered our messages through AIIB-led events and participation in those of other multilateral development banks (MDB) and the private sector, including high-level events on Green Hydrogen, the special role of MDBs, smart connectivity, debt issues, renewable energy investment, joint MDB Paris alignment progress, net-zero and the UNFCCC’s Global Innovation Hub. We announced the issuance of a resilience bond in 2023, interest in implementing climate-resilient debt clauses (CRDC), signed investments and partnerships (Global Energy Alliance for People and Planet and Energy Transition Accelerator Financing) and joined strategic initiatives at a country level and the Coalition for Climate Resilient Investments that is focused on pricing climate risk to support a paradigm shift in adaptation and resilience financing. Overall, AIIB and our messages were well received with strong interest in our events and commitments.
In parallel, country negotiators worked late into the night in working groups on carbon markets (what is called Article 6) and finance and on a cover decision for COP27 called the Sharm El Sheikh Implementation Plan. The final cover decision was agreed in the early hours of Nov. 20, 2022. We understood in the run-up to COP27 that funding for loss and damage would be high on the negotiation agenda and it was a significant result that an agreement was reached. At the same time, many stakeholders wanted more ambition on phasing out fossil fuel. This was not mentioned in the final text. There was however, mention of MDBs and international financial institutions needing to do more in the climate space. This is the first time that MDBs have been singled out in this manner in a cover agreement. Enclosed is what was agreed in relation to MDBs and what this means.
37. Calls on the shareholders of multilateral development banks and international financial institutions to reform multilateral development bank practices and priorities, align and scale up funding, ensure simplified access and mobilize climate finance from various sources and encourages multilateral development banks to define a new vision and commensurate operational model, channels and instruments that are fit for the purpose of adequately addressing the global climate emergency, including deploying a full suite of instruments, from grants to guarantees and non-debt instruments, taking into account debt burdens, and to address risk appetite, with a view to substantially increasing climate finance;
The decision encourages MDBs to define a new vision and operational model that is appropriate to address the climate emergency. This involves deployment of grants, guarantees and non-debt instruments while also addressing risk appetite.
38. Calls on multilateral development banks to contribute to significantly increasing climate ambition using the breadth of their policy and financial instruments for greater results, including on private capital mobilization, and to ensure higher financial efficiency and maximize use of existing concessional and risk capital vehicles to drive innovation and accelerate impact;
For AIIB, this means building on our current focus on Paris alignment, increasing climate finance, using financing structures and partnerships to mobilize private capital effectively and increase impact.
There was also an invitation for development partners to provide support for implementation of the Early Warnings for All initiative.
27. Welcomes and reiterates the United Nations Secretary-General’s call made on World Meteorological Day on 23 March 2022 to protect everyone on Earth through universal coverage of early warning systems against extreme weather and climate change within the next five years and invites development partners, international financial institutions and the operating entities of the Financial Mechanism to provide support for implementation of the Early Warnings for All initiative.