Climate finance warms in LatAm
December 5, 2018 |
Financing is expected to rise 10% to $40bn as Colombia, Mexico and Peru pursue environmental projects
Climate finance in Latin America is expected to grow around 10% to nearly $40bn this year as Colombia, Mexico and Peru pursue environmental projects, LatinFinance has heard.
"Flows continue to increase amid rising demand for projects," Leonardo Martínez-Díaz, global director of the Sustainable Finance Center at the World Resources Institute (WRI) in Washington DC.
Developed countries have increased their commitments to help poorer countries combat global warming, recently reaching $70bn of the $100bn annual pledge by 2020, and Latin America has benefited from such aid, with much of the money going to finance renewable energy projects and the production of electric vehicles, he said.
Despite the increase, Latin America still does not have the funding it needs to develop new new projects and cut carbon emissions in line with the Paris Agreement.
"Climate resilience and adaptation funding is underspent by 70%," Martínez said, citing water management, agriculture and protecting cities from heatwaves as crucial areas for investment.
Some countries are making progress in adaptation financing in Latin America, he said. Colombia has a "strong" climate action program and it unveiled a climate finance tracking system last year. Mexico has a green energy fund and laws to reduce emissions and increase the use of renewable energy. Peru is one of the first countries in Latin America to secure investments from the UN-backed Green Climate Fund and it is a pioneer in forestry and land preservation projects, Martínez said.
Barbara Buchner, executive director at the Climate Policy Initiative, said Latin America has outpaced other regions, but she added that it needs to provide better conditions for the private sector to finance more environmental projects, including greater participation from the insurance sector.