Cop: Cash, regs still hurdles for developing nations

Financing and regulation will continue to slow developing countries' expansion to cleaner energies,despite advances in financing commitments at the UN Cop 28 climate summit, stakeholders said.

Countries and institutions have made many climate and environment-related finance commitments, including $727mn for the loss and damage fund for the unavoidable and irreversible effects of climate change that developing countries argue they will feel the most.

But there are estimates that such costs globally are closer to $20 trillion, so the new commitments are only "the start of a much larger process because the gap is still so wide," Caribbean Development Bank president Hyginus Leon said at the Atlantic Council's Global Energy Forum at Cop 28 in Dubai today.

In addition to limited direct reparations, financing costs in the developing world for renewable energy can reach as high as 20pc, compared to single digits in developed economies. The markets need to "rethink the idea of the cost of capital," given the immense risks from climate change, Leon said.

But even when the capital is secured, regulatory progress is often too slow globally, said HIF Global executive director Meg Gentle. The Chile-based e-fuels company is developing a $4bn project in the South American country and has also proposed a 2mn USG/year e-fuels plant in Texas that Gentle said has been granted approval, among other projects, but more supportive policies would speed development.

"It is getting better, but policy makers still don't really listen to the industry," Gentle said. "We are futzing around with getting things perfect rather than getting things moving."

One US government official noted that trying to remove some of these speed bumps in financing will be among the administration's main aims as the flow of cash increases.

"I keep hearing that the public sector doesn't understand," said Adam Wang-Levine, deputy assistant secretary for climate, environment and infrastructure with the US Department of Treasury. "We are open to hearing these things."

He is calling for a more open discussion "to help mobilize capital" for progress in moving to cleaner energies.

By Carla Bass