With sustainable infrastructure investment needs in developing countries exceeding $1 trillion a year, aligning global finance with sustainable development remains imperative

Kevin

As the world passes the halfway mark for achieving the Sustainable Development Goals (SDGs) by 2030 and faces a rapidly closing window to avoid catastrophic climate disruptions, the negotiations at the recent United Nations High-Level Political Forum on Sustainable Development (HLPF) highlighted the urgent need for integrated approaches to foster climate-resilient and equitable development.
The severe impacts of climate change are already undoing hard-won development gains and exacerbating vulnerabilities, especially across the developing world. Extreme weather events are increasing in frequency and intensity, resulting in severe damage to economies, infrastructure, food systems and human health worldwide. However, developing countries bearing minimal historic responsibility for emissions face disproportionate climate risks owing to lower adaptive capacities.
Meanwhile, progress remains sluggish across most SDG targets, with only limited headway made on reducing poverty, expanding quality education and healthcare, and improving gender equity. Lack of financing and insufficient policy action continue to hamper advancement. According to the UN, only around a third of the SDG targets are on track, demanding a profound reorientation of priorities.
Critically, developed nations also continue falling short of delivering on climate finance commitments to support developing countries. The $83 billion in climate finance flows reported for 2020 underestimates true contributions due to ineffective reporting practices, while still falling short of the unmet annual $100 billion goal.
Moreover, over 90% of this finance takes the form of loans rather than grants, constraining accessibility for resource-poor nations already burdened by debt and economic losses from the COVID-19 pandemic. Insufficient reliable climate funding undermines capacities for mitigation and adaptation across the developing world.
These financing gaps continue despite sustainable investment opportunities surging globally. Alarmingly, climate finance flows are failing to reach those most vulnerable. Despite more than doubling from $360 billion in 2011 to over $850 billion in 2021, over three-quarters of climate financing is directed towards middle- and high-income countries, bypassing the poorest nations bearing the greatest climate risks, according to Climate Policy Initiative data.
<h2>Closing investment gaps by aligning finance with development and climate needs</h2>
With sustainable infrastructure investment needs in developing countries exceeding $1 trillion a year, aligning global finance with sustainable development remains imperative but challenging. While private capital could support climate-resilient development significantly, risk perceptions deter investors. Short-term profit motives dominating financial systems also often ignore social and environmental returns.
Meanwhile, tensions endure between developed and developing country positions and priorities. Developed countries continue resisting demands to rapidly phase down fossil fuels due to energy security concerns and pressure from powerful lobbies. Developing nations remain focused on securing promised climate finance and funding for loss and damage from unavoidable climate impacts.
Creating and sharing tools to accurately price climate risks could help overhaul financing models to reward sustainable investments. Stronger disclosure requirements and standards around social and environmental factors are enhancing transparency. Partnerships between public and private finance can blend instruments and capabilities to de-risk and better align investments with climate-resilient development needs. South-South cooperation also increasingly mobilizes technology, knowledge and financing for sustainability.
While complex challenges like risk perceptions, policy environments and global divisions persist, innovating financing systems to direct flows towards integrated climate and development solutions remains imperative.
<h2>Recognizing and seizing climate and sustainable development synergies</h2>
The negotiations and events at HLPF revealed strong momentum around harnessing the deep connections between climate action and sustainable development to maximize co-benefits. Transitioning rapidly away from fossil fuels towards renewables and efficiency can simultaneously advance mitigation, adaptation, health, and poverty alleviation. Sustainable transportation also fosters decarbonisation along with equitable access and economic development. Ecosystem restoration boosts resilience and biodiversity while supporting community livelihoods. Circular approaches to production and consumption reduce both emissions and waste.
However, effectively seizing these synergies requires evidence-based, inclusive policymaking. Impact assessments help identify and maximize socioeconomic, health and environmental co-benefits across sectors while mitigating trade-offs. Multi-stakeholder processes enable collaborative planning and capacity building. Mainstreaming climate and SDGs through governance at all levels fosters integrated implementation.
Principles of equity, inclusivity and climate justice must also underpin financing flows to ensure solutions benefit the most marginalized groups. Knowledge and data gaps persist around interlinkages, constraining integrated planning and investments. Budgetary and capability constraints pose further obstacles for LDCs and developing countries.
Nonetheless, growing recognition of the deep, multifaceted connections between climate and broader sustainable development is spurring promising pathways for synergistic solutions. Developed cities and countries in particular possess immense capacities and financing that could empower integrated progress globally if directed strategically towards vulnerable developing nations.
<h2>Harnessing the strategic role of developed cities</h2>
Developed cities and urban centres play an increasingly pivotal role in both global climate action and sustainable development. They occupy the intersection between critical mitigation and adaptation needs. Cities also serve as centres of innovation, finance, governance and technology to devise solutions scalable worldwide.
Developed cities possess immense capacities and financing that could empower climate-resilient progress globally if strategically leveraged. Sustainability leaders like Singapore and Hong Kong offer key insights into catalysing such solutions through strong policy, technology expertise and financing capabilities.
For instance, Hong Kong built deep knowledge around green finance tools, including pioneering green bonds in Asia. It can direct such capabilities towards mobilizing climate adaptation and mitigation financing across developing Asia's vulnerable cities. Meanwhile, Singapore has spearheaded electric vehicle policies and low-carbon buildings in a high-density urban environment. Its urban development model offers important learnings for regional developing cities.
Partnerships between developed city experts and developing country policymakers can powerfully accelerate knowledge transfer and capacity building. Developed cities can also utilize their financial strength to insure climate risks, pioneer carbon trading and clean energy investments and expand climate finance across the Global South. Rather than traditional donor-recipient dynamics, such collaborations represent mutually empowering North-South and South-South exchanges to achieve sustainable development.
<h2>Realizing true climate leadership: bridging divides through partnerships</h2>
Moving forward, the world urgently requires courageous leadership and unprecedented collaboration to bridge enduring divides between the developed and developing world. The principles of equity and climate justice must be upheld, especially by countries and cities with the greatest capabilities and historic responsibilities.
Developed nations and cities must fulfil &ndash; and go beyond &ndash; their climate finance pledges, shifting from loans to grants to expand developing countries&rsquo; access and self-determination. Concrete technological and knowledge exchange partnerships can accelerate climate action and resilience among the most vulnerable communities.
Rather than finger-pointing or isolationism, open dialogue and transparency around needs and capacities can build mutual understanding and trust. Developing countries also have a key role to play in undertaking governance reforms, expanding engagement and accountability with marginalized communities, and fostering enabling environments for sustainable development.
Ultimately, securing our shared climate and development goals hinges on forging win-win partnerships founded on equity and justice. The cooperation of all actors &ndash; subnational, national and multilateral &ndash; is essential to succeed in transforming entrenched systems and power imbalances.
With climate change and development challenges growing increasingly dire and intertwined, the world needs a profound reorienting of priorities and financial flows coupled with unprecedented collaboration between all stakeholders. Developed cities and countries must embrace their pivotal opportunity to lead by enabling and empowering the most vulnerable regions.
As global leaders prepare to gather at pivotal forums ahead on climate, development finance and justice, they face historic choices between transformative partnership or continued paralysis that imperils humanity&rsquo;s future. The progress made at HLPF offers hope but remains far below the scale and urgency these existential crises demand. We still have time to choose wisdom, courage and solidarity. But that window is closing rapidly.
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

The interconnected challenges of climate and development demand integrated solutions

Since the Intergovernmental Panel on Climate Change (IPCC) embarked its sixth assessment report cycle, three working group reports have been published. These reports reaffirm the indisputable fact that climate change is caused by human activities, and focus on the impact of climate change, adaptation and vulnerability. 

Since the Intergovernmental Panel on Climate Change (IPCC) embarked its sixth assessment report cycle, three working group reports have been published. These reports reaffirm the indisputable fact that climate change is caused by human activities, and focus on the impact of climate change, adaptation and vulnerability. On April 4, the third working group report (WG3) highlighted that the world must peak its carbon emissions now. Otherwise, the global average temperature will continue to rise towards the end of this century by 3.2 degrees Celsius compared with pre-industrialization, which will become a catastrophe. We must accelerate climate actions to limit temperature rises to 1.5 degrees Celsius, as required by the Paris Agreement.
<h2>Asia&rsquo;s energy transition needs to speed up</h2>
The webinar, "<a href="https://www.ccinnolab.org/SCREWebinarsPost/REWebinar20">Accelerating the Just Energy Transition in Asia: Voices from Civil Society and Business</a>", which was held on April 7th by CarbonCare InnoLab, was echoing the IPCC&rsquo;s findings in time. A total of 13 experts from Japan, South Korea, the Philippines, India, Mainland China, Taiwan and Hong Kong were invited to address the opportunities and challenges towards achieving, and put forward analysis and suggestions on how to speed up a just energy transition.
Even if we affirmed the climate pledges in their respective countries/regions, there are still a long way to go with the IPCC recommendations. The decision-making process is also top-down, with less attention paid to the specifics of how to formulate and implement decarbonisation pathways.
There are also cautions about the intervention of new technology solutions, including the new generation nuclear energy and carbon capture and storage. Even though new energy technologies such as green hydrogen have considerable potential, and the IPCC report have listed the above technologies as mitigation options, their potential very much depends on the maturity of large-scale use of technologies, which usually have longer return on investment, higher costs and potential security risks.
<h2>Possibilities and limitations of technology solutions</h2>
In addition, even though the cost of renewable power generation has dropped significantly, the comparatively high upfront cost and the grid instability arising from variability of renewable energy, which are solvable, requires serious attention by the grid operators and regulators. There is an example from Jeju Island of South Korea, indicating that due to curtailment by grid operators, the electricity generated by renewable energy cannot be used even if it performs as good as gas-fired power plants. In addition, due to the supply chain issues as a result of coronavirus pandemic and geopolitical tensions, the originally reduced renewable energy generation costs may become unstable. Therefore, regulators should play a central role in overcoming technical barriers while weighing in costs, benefits and risks.
Meanwhile, Asia will face difficulties in speeding up the decommissioning of coal-fired power plants in the future. Operators from two local coal-fired power plants in South Korea are hindering the early retirement because the government is afraid of potential demands for costly compensation, without the initiatives to assess the compensation size. The government, as the power regulator, has not been actively promoting the decommissioning. To negotiate a set of implementation guidelines and early retirement mechanisms will pose a challenge in the region.
<h2>Issues of just energy transition: openness, transparency and equality</h2>
Looking ahead, the energy transition in Asia will still encounter opportunities and challenges. The current level of renewable energy technology, according to an analysis from Japan, can already meet the country's decarbonisation targets, which will generate greater economic benefits and create more employment opportunities than the continued development of fossil fuels and nuclear energy. Meanwhile, studies from Hong Kong and ASEAN, indicated that the principles of openness, transparency and equality should be mainstreamed in the process of energy transition.
Experiences from community-based renewable energy projects in Japan and Taiwan, setting good examples across Asia. These examples are encouraging, but small-scaled and fragmented. The factors of success are members' sense of participation, trust in other members of the community and a sense of belonging to the project, but still need to overcome the legal and power system barriers. This is what needs to be learned in order to grow at scale.
Finally, the investors should incorporate just transition into investment principles, including care for labour and community participation. Such initiative is still in its infancy, but it is hoped that in the foreseeable future more investors in the region will consider the just transition as a core value in their energy investment decisions.
This webinar covered a wide range of topics across Asia. The three-hour discussion was obviously unfinished, but was a good attempt, taking the first step towards multilateral cooperation on regional energy transition in the future. We look forward to further in-depth discussions with experts on individual topics in the future.
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.
<h3>Annex</h3>
Speaker List of the Webinar - "Accelerating the Just Energy Transition in Asia: Voices from Civil Society and Business": (in no particular order)
<ul>
<li>Zhao Ang, co-director and co-founder, Rock Environmental and Energy Institute (Mainland China)</li>
</ul>
<ul>
<li>Mika Ohbayashi, Director, Renewable Energy Institute (Japan)</li>
</ul>
<ul>
<li>Professor Jusen Asuka, Centre for Northeast Asian Studies, Tohoku University (Japan)</li>
</ul>
<ul>
<li>Dr. Shota Furuya, Researcher, Institute for Sustainable Energy Policies (Japan)</li>
</ul>
<ul>
<li>Gahee Han, Researcher, Solutions for Our Climate (South Korea)</li>
</ul>
<ul>
<li>Seukyoung Lee, Researcher, Solutions for Our Climate (South Korea)</li>
</ul>
<ul>
<li>Hwang Shute, Chairperson, Green Advocates Energy Cooperative (Taiwan)</li>
</ul>
<ul>
<li>Dr. Chao Chia Wei, Chairman, Taiwan Environmental Planning Association</li>
</ul>
<ul>
<li>Anjali Viswamohanan, Senior Policy Manager, Asian Investors Group for Climate Change</li>
</ul>
<ul>
<li>Dr. Daphne Mah, Director, Asian Energy Research Centre, Hong Kong Baptist University</li>
</ul>
<ul>
<li>Dr. Laurence L. Delina, Division of Environment and Sustainability, Hong Kong University of Science and Technology</li>
</ul>
<ul>
<li>Chong Chan Yau, co-founder and CEO, CarbonCare InnoLab</li>
</ul>
<ul>
<li>Kevin Li, researcher, CarbonCare InnoLab</li>
</ul>

Asia needs regional multilateral cooperation to achieve a just energy transition

On February 28, 2022, the Intergovernmental Panel on Climate Change (IPCC) released a report assessing the latest status of climate change impacts, adaptation and vulnerability. From 67 countries and regions around the world, 270 scientists and 675 experts in related areas, including 10 mainland Chinese and 3 Hong Kong experts, made reference to more than 34,000 academic journal papers and 62,418 comments from officials and experts, and came to conclude with this 3,675-page report.

On February 28, 2022, the Intergovernmental Panel on Climate Change (IPCC) released a report assessing the latest status of climate change impacts, adaptation and vulnerability. From 67 countries and regions around the world, 270 scientists and 675 experts in related areas, including 10 mainland Chinese and 3 Hong Kong experts, made reference to more than 34,000 academic journal papers and 62,418 comments from officials and experts, and came to conclude with this 3,675-page report.
This report is a must-reference document for the annual United Nations Climate Change Conference, and is also an important basis for reviewing the implementation of the Paris Agreement by the parties. When the Financial Secretary of Hong Kong SAR recently released the Budget 2022-23, he proposed to allocate funds to improve the resilience of low-lying areas, confirming that the HKSAR government has also begun to attach importance to climate adaptation. In fact, the Government&#x27;s climate adaptation measures can still be strengthened in many places. The report proposes some international best practices, which are worthy of reference by the government.
<h1>Climate adaptation measures will only be effective with timely control of global warming</h1>
According to the report, more than 40% of the world&#x27;s nearly 8 billion people, or 3.3-3.6 billion people, will regularly face the threat of climate catastrophe. If we cannot control the global temperature increase to within 1.5 degrees Celsius, at least 350 million people will face the threat of water shortage, half of the world&#x27;s species are or will be migrating their habitats, and up to 90% of coral reefs will disappear. Even if we adopt climate adaptation measures, the effectiveness may be offset, making it less effective against a direr catastrophe.
Looking at our cities and communities, the report notes that climate change disproportionately affects vulnerable groups. For example, the frequent use of air-conditioning consumes more electricity and therefore increases the burden of medical expenses for poor households, and reduces their income due to the inability to find jobs. Take Hong Kong as an example. According to statistics from the Hong Kong Observatory, the number of hot nights in 2021 was 61 days, while the number of extremely hot days was 54 days, both of which are the highest on record. Many subdivided housing residents and outdoor workers in Hong Kong are faced with the dilemma of living in extremely hot weather every day.
Combining structural poverty, social and economic inequalities, and exacerbating the plight of people with disabilities and the urban poor, the report notes that climate impacts are often multiple and interlocking. Regarding the difficulties faced by the elderly, subdivided housing residents, outdoor workers and people with disabilities in extreme weather, CarbonCare InnoLab has also held a number of community dialogues to discuss the problems and propose solutions with relevant groups. The author will elaborate in another article soon.
<h1>Climate change exacerbates inequalities, increases patients’ risks</h1>
In addition, the quality of life of citizens in hot weather deteriorates, with the rising occurrence of mental illness, and reduction in sports activities, social activities, tourism and recreational activities. Moreover, the inverse relationship between temperature and global economic output could lead to a potential loss of 23% in global productivity declines by the end of the century.
What&#x27;s more, there is a clear relationship between increased heat or rainstorms and mental health problems, with suicides, anxiety, depression, and even mental illness, and the need for psychiatric hospital admissions and clinic visits also increased. And in many parts of Asia, heat increases the risk of mental health, including mental disorders, depression and anxiety. Based on global research, every degree Celsius increase in temperature increases the risk of suicide to varying degrees. In addition, the number of hospitalizations for various medical diseases, heat stroke and accidents increased. Salmonella outbreaks are closely linked to rising temperatures and increased levels of allergens such as pollen, leading to an increase in diseases such as asthma and allergic sinusitis.
<h1>The adaptability of cities to climate change needs to be strengthened</h1>
The report also places great emphasis on the impact of climate change on cities, and the role cities can play. More than half of the world&#x27;s population currently lives in cities, and by 2050 it is more likely that cities will account for two-thirds of the world&#x27;s population. But, by the middle of this century, about 1 billion citizens of coastal cities will be threatened by rising sea levels. In addition, heat waves and air pollution directly affect the health of citizens, and the operation of urban infrastructure including transportation, water supply, energy and power systems will also be affected.
Coastal cities like Hong Kong need to strengthen climate risk management, as well as climate change assessment and disaster risk reduction research. The most effective way to limit the increased climate risk for coastal cities and dwellings is to avoid new development in areas vulnerable to flooding or sea level rise. Reserve flooding space is the most widely used adaptation strategy. Experts also warn that climate adaptation measures should not be abused and wasteful, not only failing to withstand disasters, but also depriving groups that should be protected by adaptation measures due to maladaptation.
The report points out that vulnerable groups, including people living in developing countries and small islands, indigenous peoples, women, ethnic minorities, the elderly and children, are more affected by climate change, and puts forward the principle of equity and justice, taking into account vulnerable groups and various generations the need for equitable participation of people with different interests, opinions and values.
<h1>Adaptation measures should be based on the principle of equitable participation and inclusion of the most vulnerable</h1>
Therefore, for the first time, the report proposes &quot;Climate Resilience Development&quot; as a way for future cities to balance development needs and climate change, while taking into account the reduction of greenhouse gas emissions, climate risk reduction, biodiversity conservation and sustainable development as the target. The report proposes that cities need to adopt a combination of nature-based and built-in approaches, building more green and water-friendly public spaces, developing urban agriculture to increase food security, and creating social safety nets to protect vulnerable groups from climate disasters, etc.
As for strengthening Hong Kong&#x27;s climate resilience, we believe that the five important principles for adaptation measures proposed by the report, including political leadership, clear goals and responsibilities, accumulation and sharing of knowledge, establishment of monitoring and evaluation mechanisms, and equity and inclusion of the most vulnerable, should guide Hong Kong&#x27;s climate adaptation policies. The “Paris Watch Report 2021” published by CarbonCare InnoLab pointed out that the &quot;Hong Kong Climate Action Plan 2050&quot; seems to self-congratulate its past and current climate adaptation &quot;achievements&quot;, while there are still rooms for improvement in strengthening adaptation to climate change and disasters, in contingency work, in enhancing public participation and transparency, and in strengthening monitoring and evaluation of adaptation effectiveness. These principles are also applicable to examining how large-scale infrastructure projects such as the Hong Kong Airport&#x27;s Third Runway and the Lantau Tomorrow Vision projects, which require enhancement of climate resilience. As pointed out in the Paris Watch Report, only if we accelerate the pace of carbon reduction and energy transition, strengthen climate adaptation, and update the goals and details of the “Hong Kong Climate Action Plan 2050” as soon as possible, can we hope to reduce the risks posed by climate change.

Energy Voices is a democratic space presenting the thoughts and opinions of leading Energy &amp; Sustainability writers, their opinions do not necessarily represent those of illuminem.

Kevin Li

Kevin Li

The interconnected challenges of climate and development demand integrated solutions

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