Climate finance: a new roadmap to deliver on high climate ambition and the SDGs

Key points

The EESC:

• recognises climate finance as a sophisticated mechanism aimed at mobilising resources and facilitating the transition to a low-carbon, resilient future. This includes financial resources allocated to both mitigation and adaptation efforts in climate action, intertwined with compensation (loss and damage) and Just Transition finance;

• stresses the major role of public finance in adaptation and commitment from both public and private actors over extended periods, which can be challenging;

• maintains that access to climate finance for local initiatives, grassroots movements, and social partners is vital for scaling up climate action, and this reflects the EU’s experience in driving meaningful change and enhancing community resilience;

• calls for incentivising the private sector to use its financial resources and to be actively involved in national and regional adaptation and mitigation plans while not placing disproportionate burdens on public finances and workers;

• supports the influential role of the ECB especially in facilitating investments in climate adaptation and ensuring that financial flows are aligned with the goals of the Paris Agreement;

• emphasises the need of debt relief to break the cycle of indebtedness and underinvestment in adaptation (inter alia), which is followed by increased vulnerability, and to enhance the role of SDG-linked bonds;

• agrees with the recent EU proposals that the New Collective Quantified Goal (NCQG) on Climate Finance negotiations should aim to make climate finance 1) better fit for purpose and more biodiversity-friendly, 2) more impactful and 3) better able to accurately target the most vulnerable countries and communities;

• finds that the Just Transition concept should guide the allocation of all climate finance flows in line with the Paris Agreement, emphasising alignment with Earth’s safe and just operating boundaries and broader social and economic objectives, with SDGs at the core.