As delegates continue to negotiate over what will make it into the final agreement to emerge from COP26, finance remains a major stumbling block.
Developed world countries had previously committed to mobilise an annual contribution of $100bn to developing world countries to finance their mitigation and adaptation needs.
The target of mobilising those funds by 2020 has been missed, and is unlikely to be reached by 2023 at the earliest.
But pledges made in recent days have edged commitments closer to that $100bn target. In reality, the cost of transitioning energy systems and building resilient societies will be in the trillions.
Nicholas Stern, chair of the Grantham Research Institute on Climate Change and the Environment at the London School of Economics, has warned against adding targets for future finance to the text simply because whatever figure is put in, it will likely not be enough.
“An attempt to put numbers into the finance paragraphs now will lower ambition and undermine the crucial logic of building the different sources,” he says.
“It is understandable that there is anger about the failure by rich countries to deliver the $100 billion by 2020 that was promised in 2009-10. That failure is a breach of trust.
“But the whole purpose now is to get serious sums, especially from the private sector, behind the action and investment needed, and the right kind of finance in the right place at the right time.”
Mobilising public and private finance is critical to supporting and scaling up insurance mechanisms which can boost the resilience of vulnerable communities.
In today’s edition we hear how public and private finance will be critical to drive scale in weather-index based agricultural insurance products in sub-Saharan Africa
We also take a look at a pilot project in Fiji which can potentially serve as a prototype for other insurance mechanisms in the Pacific region.
While much of the media attention over the next 48 hours will be on the strength of the political agreement that emerges from the past two weeks of talks, the success of the event will ultimately be determined by the extent to which it serves as a catalyst for further action.
From an insurance perspective, COP26 has highlighted several ways in which the industry can serve as a force for good. Look out for tomorrow’s final edition of The Insurer’s COP26 daily bulletin for a round-up of key takeaways from the past two weeks.