UN Report Proposes 10 Principles for Financing SDGs and Climate Action in Asia-Pacific

The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) has released a report titled “Sustainable Finance: Bridging the Gap in Asia and the Pacific,” presenting 10 principles aimed at guiding policymakers, regulators, and private finance stakeholders in mobilizing and deploying financing for the United Nations-mandated Sustainable Development Goals (SDGs), particularly focusing on climate action.

Key Principles for Action

The proposed principles are designed to facilitate collaborative efforts to shift and scale up capital for financing climate action. They aim to overcome obstacles, rectify underpricing of climate risk, and align capital investments with sectoral and regional priorities. The 10 principles are as follows:

1. Developing new climate finance partnerships.
2. Developing effective strategies for financing Nationally Determined Contributions (NDCs).
3. Promoting policy coherence and capacity-building across government ministries.
4. Implementing regulatory measures to redirect capital toward the Net Zero transition in Asia and the Pacific.
5. Investing in the skills and capabilities of financial personnel.
6. Enhancing sectoral and project-based financial data.
7. Committing to Net Zero pledges for 2050 with credible transition pathways and interim goals for 2030.
8. Increasing local-currency financing for energy transition projects, green technologies, and other net-zero investments.
9. Expanding and expediting concessional financing and risk-sharing through multilateral and bilateral development banks.
10. Increasing investment in project preparation in collaboration with partners.

Challenges in Financing Climate Action

The report acknowledges that despite the growing global need for climate finance, there have been challenges in financing climate action in the Asia-Pacific region. These challenges are attributed to macroeconomic issues and concerns about public debt sustainability. It also emphasizes that, while sufficient capital and liquidity exist to close the global financing gap for sustainable finance, various obstacles hinder the deployment of capital for climate action.

Regional Situation and SDG Progress

The report highlights that only 17 out of the 51 Asia-Pacific countries participating in the UN Framework Convention on Climate Change have assessed and reported their financial needs to meet their Nationally Determined Contributions (NDCs). Additionally, only seven of these countries have broken down their financial needs between adaptation and mitigation efforts. The region also faces economic losses from disaster-related and natural hazards, which are projected to increase significantly in moderate and worst-case climate-change scenarios.

Stimulating Informed Debate

ESCAP aims to stimulate a more robust and informed debate among its member states on crucial measures to move the Asia-Pacific region towards sustainability. The report provides clarity on the benefits and consequences of various policy and financing choices in the short and long term, aiming to support informed decision-making.

Month: Current Affairs - October, 2023

Category: Reports & Indexes Current Affairs