Egyptian president calls on global leaders, bankers to help with “green recovery”

Egyptian President Abdel Fattah El-Sisi called on global financial institutions and the international community 8 September to aid "green recovery" efforts in developing countries emerging from the COVID-19 pandemic and dealing with the negative impacts of climate change.

Delivering the opening remarks at the first International Cooperation Forum (Egypt-ICF), El-Sisi said "green recovery is becoming an urgent need," but governments, especially those in the developing world, cannot do it alone.

"Humanity is passing through the most difficult test in a long period of time, as it faces numerous challenges represented in the repercussions of the coronavirus pandemic and the negative impact of climate changes," El-Sisi said.

Egypt-ICF—which aims to develop a multilateral, streamlined green recovery through sustainable finance—brought together national, regional, and international policymakers, international financial institutions, development partners and representatives from the private sector, civil society, and think tanks.

Egypt is vulnerable to climate influenced sea-level rise. These negative impacts are compounded by its large population that lives mostly along the Nile Delta, according to the United Nations Development Programme. Egypt is one of only three African nations with a population greater than 100 million people.

In 2018, Egypt emitted 329.40 million mt of CO2 equivalent, with a share of 0.67% of global emissions and 2.5 tons of CO2 emissions per capita, according to the nonprofit World Resources Institute's ClimateWatch data.

With just about two months before the United Nations holds its pivotal COP26 climate change meeting in Glasgow, El-Sisi urged attendees from the World Bank Group, the African Development Bank, and the European Reconstruction and Development Bank—as well as the EU and the UN—to assist those countries that were hardest hit by the pandemic and were struggling to recover.

Role of private sector

"The pivotal role of the private sector arises in order to move forward toward a sustainable future through innovative mechanisms to mobilize resources and blended finance," he said.

Blended finance involves the use of public financing structures to attract private capital.

A joint World Bank-International Energy Agency report released this June on climate financing in emerging and developing economies said 70% of the capital for clean energy in the developing world must come from private investors, a point El-Sisi emphasized in his remarks

According to this report, global financial wealth exceeded $200 trillion at the start of 2020, and during the year, investments in sustainable debt reached records levels. But only 5% of that sustainable debt is in the developing world, IEA Executive Director Fatih Birol said at the launch of "Financing Clean Energy Transitions in Emerging and Developing Economies."

In fact, the report found that clean energy investment in the developing world has been flat since 2014, actually declining in some years.

Echoing El-Sisi's remarks at the meeting, Jeffrey Schlagenhauf, deputy secretary-general for the Organisation for Economic Co-operation and Development, said a one-size-fits-all approach for emerging economies and developing countries won't work.

The $41.4 billion that Africa received in development grants during the 2018-2019 period was not commensurate with the needs of the continent, he said.

"More sources of financing for development need to be mobilized, including from the private sector and through innovative approaches such as blended finance. We need to recognize that each country can find its own path for sustainable development," Schlagenhauf said.

Pandemic exposed environmental crisis

Also speaking at the meeting was Jutta Urpilainen, Commissioner for International Partnerships at the European Commission, who noted that the COVID-19 pandemic has claimed almost 4.5 million lives around the globe. "It has, like an X-ray, exposed our strengths and weaknesses, from social and economic inequality to the environmental and biodiversity crisis," she said.

Egypt was among the countries involved in developing the UN's Sustainable Development Goals (SDGs) for 2030, when environmental protection was deemed a fundamental pillar for all sectors, according to El-Sisi.

He said the development goals of Egypt Vision 2030 are aligned with the UN 2030 Agenda for Sustainable Development and Africa 2063 Development Agenda to "bolster the values of joint action and multilateral cooperation to support development efforts in various countries."

"While there is less than a decade left for the 2030 UN SDGs, it is necessary to evaluate what has been achieved so far to recover from the challenges of the pandemic and to build back better," Egyptian Minister of International Cooperation Rania Al-Mashat added.

An IHS Markit analysis released 24 August said COVID-19 has had a major impact on people's attitudes and behaviors, reinforcing the trend, especially among the financial sector, towards increased environmental awareness that had emerged a few years earlier.

"Banks, insurers, and regulators are increasingly attentive to the financial risks associated with climate change and other types of damage to the environment that would result in high remediation costs or stranded assets," IHS Markit Chief International Economist Elisabeth Waelbroeck-Rocha wrote in the report.

Posted 08 September 2021 by Amena Saiyid, Senior Climate and Energy Research Analyst