# How Asia is facing an $800 billion climate financing shortfall

- Link: https://www.thailand-business-news.com/environment/126968-how-asia-is-facing-an-800-billion-climate-financing-shortfall
- Published: 2024-02-20T17:18:12+07:00
- Author: News Desk

The Asia-Pacific region is facing an $800 billion climate financing shortfall, exacerbated
by the pandemic’s impact on public finances. To address this, a coordinated effort
is needed from governments, central banks, financial supervisors, and multilateral
institutions.

## Key Takeaways

 * The Asia-Pacific region faces an $800 billion shortfall in climate financing,
   requiring coordinated efforts by governments, central banks, and financial supervisors
   to unlock the potential of private capital.
 * Asia’s pivotal role in global sustainability is underscored by its heavy reliance
   on coal for energy and the region’s urgent need for at least $1.1 trillion annually
   to meet mitigation and adaptation needs.
 * To address the funding gap and challenges in accessing climate finance, actions
   such as phasing out fossil fuel subsidies, expanding carbon pricing, and strengthening
   data, taxonomies, and disclosures are crucial, along with collaboration between
   local and global entities.

Strategies include phasing out fossil-fuel subsidies, expanding carbon pricing, 
and promoting innovative financing and public-private partnerships. Asia’s pivotal
role in climate action is emphasized due to its economic growth and high greenhouse
gas emissions.

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The funding gap for mitigation and adaptation needs in the region is significant,
with challenges for small economies and issues with investor trust in sustainable
debt instruments.

## Why is climate finance urgent? 

Progress is too slow. Global temperatures are set to [surpass ](https://www.imf.org/en/Publications/staff-climate-notes/Issues/2023/11/14/Is-the-Paris-Agreement-Working-A-Stocktake-of-Global-Climate-Mitigation-541083)
the critical 1.5 degrees Celsius threshold above pre-industrial levels. Efforts 
to halve 2019 levels of greenhouse gas emissions by 2030 fall alarmingly short, 
targeting only an 11 percent reduction. Without stronger action, our warming planet
imperils homes, health, and food security. Mobilizing more climate finance is vital
not only for mitigating emissions but to build adaptive capacity through investments
in climate resilient infrastructure. This is especially important for Asia, which
is home to several of the largest emitters and a region acutely vulnerable to climate
change due to high population density and geography.

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## What makes Asia’s role pivotal?

The region’s transition to greater sustainability has global implications. Asia 
contributed about [two-thirds](https://www.imf.org/en/Blogs/Articles/2023/10/13/asia-continues-to-fuel-global-growth-but-economic-momentum-is-slowing)
of global growth last year, and will again in 2024, but its heavy reliance on burning
coal for energy means that it contributes more than half of harmful global greenhouse
gas emissions. Asia’s economies recognize how climate hazards directly impact lives
and livelihoods, and have made deeper commitments, as their revised Nationally Determined
Contributions under the 2015 Paris Agreement show. Asia can aid the climate fight
by demonstrating how to balance economic growth and environmental sustainability.

Read the complete article [here](https://www.imf.org/en/Blogs/Articles/2024/01/29/explainer-how-asia-can-unlock-800-billion-of-climate-financing?)