Innovative financing mechanisms can ratchet up climate ambition in these times

TO REDUCE emissions, achieve sustainable growth and deliver the objectives of the Paris Agreement, South-east Asia requires an annual average investment of US$171 billion to US$185 billion from 2026 to 2030. The imperative of submitting more progressive Nationally Determined Contributions (NDCs) this year and fulfilling them is likely to push this figure higher.

While the New Collective Quantified Goal on Climate Finance aims to scale up finance in emerging economies to US$1.3 trillion per year by 2035, geopolitical tensions, investment barriers, limited fiscal space, low volume of private capital flows and high sovereign debt levels emerge as prominent roadblocks across many emerging markets and developing countries (EMDCs).

More recently, the change in the US administration spells profound shifts in global climate priorities, with potential implications for financial commitments and international cooperation.