Financing climate becomes center stage at COP-28 as it is a pre-emptive measure and a critical tool in the global fight against climate change.  The essence lies in providing necessary resources to mitigate its effects, adapt to changes, and transition towards a more sustainable future. Since climate change is a global problem therefore, requires a collective solution through coordinated and collaborative action. This action is met by financing the efforts to reduce greenhouse gas (GHG) emissions (particularly methane), vulnerability and increase the resilience of humans against anthropogenic activities causing drastic impacts of climate change.  To meet the need for climate action finance, a well-designed evidence-based plan is required, with a grasp of the difficulties and potential choices. COP-28 presented solutions to all climate-driven problems however; the problem lies within the solution as it bears implementation challenges.

Climate finance refers to the financial resources and tools used to support climate change mitigation efforts. Climate financing is crucial to addressing climate change because it enables large-scale investments required to transition to a low-carbon economy and assist communities in building resilience and adapting to the effects of climate change. Climate funding supports the aims of sustainable development by encouraging environmentally benign activities, economic growth, and social well-being while without jeopardizing future of next generations. Funding is required for the development and execution of programs that minimize or avoid the release of greenhouse gases. This includes investments in renewable energy, energy efficiency, and sustainable transportation. Moreover, since last year, loss and damage fund add up to the list of climate finance claimed by developing nations as reparations.

Climate change is among the biggest challenges faced by modern day world. Especially developing countries face a dilemma: on one hand, they are the most vulnerable to the impact of climate change due to certain characteristic, such as large dependence on agriculture for livelihoods and employment and a low capacity to adapt; on the other, they have competing priorities and limited resources. Pakistan is one of them. As Pakistan stands among those highly vulnerable countries whose contribution to greenhouse gas emissions is almost negligible but affected the most. For this reason, Pakistan insisted for the first time for ‘loss and damage’ fund in the last year’s COP-27 Summit and COP-28 added to it successfully.

The climate finance can come from different sources: public or private, national or international, bilateral or multilateral. It can employ different instruments such as grants and donations, green bonds, debt swaps, guarantees, and concessional loans. It can be used for different activities; including mitigation, adaptation, and resilience-building. Takin for example Paris Agreement; the global community has started some initiatives, such as Green Climate Fund (GFC) to help developing countries raise climate finance within United Nations Convention on Climate Change (UNFCCC). The broader objective of these initiatives is to provide funds to developing countries to mitigate or adapt various climatic impacts.

Climate finance took the center stage position at the COP-28 agenda. For transition to renewable energy resources, transformation of global food chains, technological advancement of agriculture systems for sustainable growth and resilience to climate change effects; massive amount of grant is required. The host of COP-28, UAE, offered $270 billion by 2030 through its banks, and other development banks (Asian Development Bank, Development Bank of Latin America and Caribbean) announced plans to increase assistance, including pausing loan repayments during the time of climate catastrophe. However, Saudi Arabia, the world’s largest oil producer, took a back seat in this regard with his absence at the conference.

The amount of money required for energy transition, climate adaptation, and disaster relief is over-whelming. According to estimates, emerging markets and developing nations would require $2.4 trillion in annual investment to reduce emissions and adapt to climate change concerns. The loss and damage fund necessitates for larger amount as vulnerable countries that are already being hit by costly climate disasters are asking for billions more through a newly formed disaster fund, although current pledges are only around $700 million.

The goals presented on the agenda meet with a number of challenges such as trade complications with oil markets, financial realities, implementation strategies etc. The benchmark for a strong outcome at the climate summit largely depends on whether parties implement on strategies agreed on the platform regarding mitigation, adaptation, technology transfer and financing for a sustainable ecosystem.