Negotiations at COP26 went well into extra time. At the end of the conference I concluded that the measure of its success would be whether decisive action was taken in the coming months. I spoke of months rather than years, as the sense of urgency that Glasgow instilled in the UN COP process was unprecedented.
Glasgow did not guarantee 1.5 degrees, but the call for governments to come back a year later year seemed to keep it alive. The urgent need after Glasgow was to devise ambitious, short-term plans for rapid decarbonisation as the current trajectory of a 2.4 degree increase in temperatures is simply not good enough.
Eight months later the landscape has changed again as international cooperation and trust between group of countries is at new lows. There is, however, unprecedented convergence between investors, businesses, cities, regions and civil society to drive real economy transformation. It is important that all actors now deliver, even if in a more complex scenario due to geopolitical and economic shocks. It will still be necessary, although difficult, to distinguish between game changers, wishful promises and green washing.
The energy crisis this year exposed how late and unprepared developed economies are to a rapid transition to low carbon infrastructure. Investments should have been made earlier and progress remains more urgent than ever.
The new geopolitical context also means that the agenda of developing nations should take even more centre stage. The delays in progressing towards the Sustainable Development Goals require a much more ambitious plan. The fact that the countries that contributed the least to emissions are the most vulnerable to climate change requires an urgent ramp-up of climate finance, combined with credible infrastructure plans that are compatible with climate and nature.
PIDG in Glasgow
Eight months ago, PIDG joined COP26 in Glasgow with a mission: to learn, to champion the communities in which we invest, and to ask the world to scale up what we see is working. Our investments are beacons of hope, showing that sustainable infrastructure can integrate climate-aligned trajectories with real progress on socio-economic development.
This is why the UK included a PIDG package in its Clean Green initiative, showcasing our pioneering work delivering climate aligned investments across ASEAN and Africa. It is also why the examples that we showcased, as well as new partnerships with Helios Partners, Meridiam and the Rockefeller Foundation received such attention.
There was consensus amongst delegates that the traditional aid architecture needs reforming, and that this will necessitate a focus on elements that are the very essence of what PIDG does. We have shown, through our innovative focus on de-risking and capacity-building in frontier geographies, that investment in climate-aligned infrastructure can pay financial, environmental and developmental dividends.
As the world races to unlock the $100bn a year in climate finance for low income and emerging markets that was promised at Paris – with $130tn announced on COP26 finance day alone – these principles will only become more critical.
So what for PIDG and the infrastructure sector?
I believe there are real implications from COP26 and its aftermath for PIDG and our work.
Deploying trillions in climate aligned finance in emerging markets can only be realistically done if there are trillions-worth of climate aligned infrastructure assets already in operation.
Project development, early stage investments, offering terms that are unavailable in the local markets, providing credit enhancement and local currency solutions and smart use of technical assistance is what we do at PIDG to get projects off the ground to a point in which they can be investable. We just need to do a lot more of this, with others.
True to PIDG’s mandate, we must continue to lead the way on pioneering infrastructure. It is clear that our track record on climate finance as a pathway to just transitions in global markets is relevant, and we must continue to push the frontier of what is feasible.
But we must also recognise that we cannot do it alone. We need to step up how we are working with others to make decisive progress at a larger scale. These partnerships will not always be obvious, but keeping close to private innovators and finance institutions will ensure that opportunities continue to flow.
Finally, we must recognise we have built something special whilst remaining flexible and evolve to face new challenges. PIDG is recognised as a unique, valuable international player, but we must remain nimble as our niche moves mainstream.
On people and the future of leadership
I was humbled by what I saw in Glasgow. Especially amongst younger participants and representatives from developing nations, I felt a sense of urgency and gravity. They were there to play their part in history, and reinvent the way we deal with people, planet and the economy. We must not let failure amongst ‘world leaders’ lead a retreat into business as usual. Instead, it is time for leaders to step up wherever they operate. To build on what was done in Glasgow in our everyday actions.
The climate crisis affects everyone, and avoiding the worst is a collective responsibility. This requires humility and collective leadership. As we work in the countries with the youngest and fastest growing populations on earth, our ambition at PIDG is for the infrastructure that we develop and finance to enable those future leaders to reinvent sustainable development.