On September 25, 2023, the Center for Strategic & International Studies (CSIS) held an event on the topic of “advancing climate finance,” aiming to address the challenges related to climate change and climate finance in order to build a more productive, resilient, and equitable future through effective climate finance. The event started with an opening remark by Mafalda Duarte, Executive Director of the Green Climate Fund (GCF). The three panelists who joined the discussion were Marcene Mitchell, Senior Vice President of Climate Change of the World Wildlife Fund for Nature, Jacqueline Muna Musiitwa, Senior Climate Finance Advisor of USAID, and Christelle van Vuuren, Operations Officer of International Finance Corporation. Joseph Majkut, Director of the CSIS Energy Security and Climate Change Program, and Gracelin Baskaran, Research Director and Senior Fellow of the CSIS Energy Security and Climate Change Program, moderated the two sections, respectively.
In her opening remarks, Mafalda Duarte presented the idea that, although developed countries need to be ambitious leaders in terms of domestic climate investment, developing countries are actually the key to global climate goals. She also believes the developing countries which are disproportionally impacted by climate change need to be supported. The problem she pointed out was how the capable, developed countries have not been responsive to the needs of developing countries, and that they are divided in terms of their outlooks on climate financing. She then introduced the Green Climate Fund (GCF) and advertised that it is a flexible and risk-taking fund with significant resources, and GCF is capable of working with the public and private institutions that are not previously empowered with climate finance. She also mentioned that GCF will adapt new strategies that focus on the more vulnerable countries and mobilizing the private sector. The moderator then asked Duarte several questions regarding the lack of support in Washington. Duarte argued that the world needs to realize that “either we win together, or we fail together” on climate change, and we cannot regard climate financing as fruitless because people in other places are already struggling because of climate change. Lastly, when asked about the involvement of artificial intelligence (AI) and methods to mobilize funds, she mentioned that AI would help climate financing by collecting data to help decision-making, and making the investment more attractive is the best way to mobilize funds.
During the panel discussion section itself, the moderator first asked the three speakers about how U.S. leadership in climate finance fit into current U.S. national energy and development objectives. Mitchell responded to this question by looking at three different aspects: the moral, political, and security imperatives to carry out climate financing. She believes that the U.S. has a moral obligation to take the leadership. Not only is the U.S. the second greatest greenhouse gas emission contributor, but it is also, by nature, a world leader to take the initiative in such a crisis. Actively addressing climate change can also contribute to global political stability. Musiitwa introduced the ‘five P’s theory’ of the U.S. Agency for International Development (USAID): people, planning, policy, partnership, and private sector. Musiitwa detailed how the USAID is already working closely with local communities in over 100 countries to fund them to address the most pressing challenges and helping its counterparts to prioritize the more important objectives and set policies. Lastly, she mentioned that USAID helps the private sector to de-risk and therefore encourages them to take more responsibility in climate financing. As a representative of the private sector, van Vuuren mentioned that Multilateral Development Banks (MDBs) is playing a significant role in climate financing. She said that the idea of “room for revolution rather than evolution” is becoming increasingly popular in the World Bank, especially since Ajay Banga became the president. Currently, decisions made by the World Bank is reaching the ground level much more efficiently, but there are still places where revolution should take place, and the U.S. leadership can help to facilitate the MDBs reforms.
Next, the moderator asked the speakers about the priorities to achieve a productive and equitable future and the measures to make the Just Energy Transition equitable. Mitchell emphasized the global south in her response. She introduced the “locally led adaption” of the World Wildlife Fund (WWF) in which the organization will invest and assist fully aligned with the needs of the impacted. She also mentioned the “nature-based solutions operation platform” as the other mechanism. The platform focuses on using nature for climate change adaptation and mitigation, and it works on attracting private investment to invest in nature. Musiitwa took her experience in South Africa as an example to prove that the Just Energy Transition is a complex issue with a multitude of perspectives. South Africa relies on coal to address its energy crisis, but it is suffering from the climate crisis caused by using fossil fuels. Musiitwa mentioned that countries can learn from the lessons of the U.S. when phrasing out coal usage to prevent certain groups from being unfairly treated. She also believes that JET cannot be realized by relying on the strength of a few countries such as the U.S. and the European Union alone and requires the engagement of more countries. In addition, she pointed out that long-term and short-term planning must be distinguished to ensure that the phrasing out process will not cause inequality in energy use. Comparatively, Van Vuuren emphasized the importance of sunrise sectors. She believed that strong support for those sectors is an important way to realize the Just Energy Transition.
In the last part of the discussion, the moderator asked each panelist a separate question based on their field of expertise. In terms of what we can expect from the private sector on climate financing, van Vuuren suggested that forward planning on social impacts is very important for entities that are involved to understand their risks and opportunities. Additionally, it is necessary to give appropriate appreciation to the private entities so that they will invest in this ‘seemingly fruitless’ area. The question for Musiitwa was related to the $150 billion funds under USAID and how to bring the money to the most effective impact. Musiitwa basically restated the importance of partnership and policymaking. USAID is willing to support the green investing banks to make sure the money goes where it is needed the most. USAID is also helping its counterparts to make systemic changes on issues such as legal framework, financial mechanisms, and so on, Musiitwa explained. To close, the question directed to Mitchell was about the partnership between the WWF and the U.S. government in order to help communities from the multiple crises due to climate change. Mitchell used the flood in Pakistan as an example and suggested that it is very important to make sure that the mitigation and adaptation projects will always offer a return and never simply bring the countries with more debt.
