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Diokno underscores critical role of coalitions in advancing collective action to address climate change

DUBAI, UNITED ARAB EMIRATES––Finance Secretary Benjamin E. Diokno has underscored the critical role of coalitions in advancing collective action towards addressing climate change during a Department of Finance (DOF)-led side event as part of the 2023 United Nations Climate Change Conference (COP28) on December 4, 2023 at the Philippine Pavilion.

Organized with the support of the Asian Development Bank (ADB), the Philippine government conducted a high-level dialogue entitled “Investing in a Better Tomorrow: Harnessing Financing Coalitions for Accelerating Climate Finance.”

The event aims to foster dialogue among key representatives from coalitions on accelerating climate finance in private and public programs, as well as share best practices on innovative financing instruments and approaches.

According to Secretary Diokno, financing a net-zero future requires about US$ 5 trillion every year by 2030. Of this figure, emerging and developing countries need US$ 2 trillion.

“As we explore innovative ways to mobilize and allocate resources, we highlight the critical role of coalitions as platforms for bringing together diverse stakeholders––governments, private sector, and nonprofit organizations – who are united by a common purpose,” Secretary Diokno said in his keynote message.

Aside from respective countries’ domestic efforts to scale up climate finance, Secretary Diokno called for collective and decisive action from partner financing coalitions in catalyzing global public climate finance.

Secretary Diokno specifically thanked the ADB for being a strong and reliable partner in the country’s fight against climate change.

Aside from its support in mobilizing climate finance, the ADB is helping the Philippines develop its Nationally Determined Contribution Implementation Plan (NDC IP), which will be instrumental in facilitating a sound and robust climate finance ecosystem in the country.

Meanwhile, the Philippines has embarked on a Readiness and Preparatory Support Program with the Global Green Growth Institute (GGGI) to strengthen the country’s capacity and knowledge on accessing the Green Climate Fund (GCF).

More importantly, the government is pushing to develop a Climate Finance Data Platform, which is designed to work in synergy with the Sustainable Finance Taxonomy Guidelines to provide clarity, promote transparency, and enhance efficiency in the sustainable finance ecosystem.

“The development of a centralized platform for tracking sustainable finance flows will help us significantly reduce information gaps and avoid mismanagement of data and information,” Secretary Diokno said.

Having sufficient sustainable finance information will ensure the alignment of incentives, accurate measurement of results, proper valuing of assets, and effective management of risks, thus enabling implementing agencies to efficiently collaborate.

To increase protection for vulnerable sectors, the Philippines officially joined the Board of Vulnerable 20 Group of Finance Ministers (V20) – Group of Seven (G7) Global Shield (GS) Against Climate Risks on November 15, 2023.

The GS aims to make considerable progress towards providing and facilitating more and better pre-arranged and trigger-based finance against climate and disaster-related risks for vulnerable countries.

Secretary Diokno also emphasized the need to institute effective climate policies to stimulate green innovation.

These include emissions-trading schemes to cost-effectively reduce greenhouse gas emissions; feed-in-tariffs that guarantee a minimum price for renewable energy (RE) producers; government subsidies for research and development; and lowering tariffs on low-carbon technologies.

Secretary Diokno was joined by Masatsugu Asakawa, President of the ADB; Dr. Henry Kokofu, Special Envoy of the Climate Vulnerable Forum (CVF) Presidency of Ghana and Executive Director of the Environmental Protection Agency of Ghana; and Michalli Harmsen, Deputy Sherpa for the Netherlands and co-chair of Coalition of Finance Ministers for Climate Action (CFMCA) during the discussions.

The session was moderated by DOF Head of Climate Finance Policy Group, Undersecretary Maria Luwalhati C. Dorotan Tiuseco.

President Asakawa announced that under the new country program for the Philippines, they are developing ADB programs worth US$ 10 billion for 6 years. Moreover, the ADB will redouble its efforts to mobilize additional climate financing from the private sector co-financing and other sources.

He mentioned two very important lessons in mobilizing climate finance in the Philippines.

First is a strong and coherent policy framework, which led to the approval of the $250 million Climate Change Action Program, Subprogram 1 (CCAP1) for the Philippines–the ADB’s first-ever climate change policy-based loan.

Second is a consistent approach to preparing, designing, and loading up flagship climate investments.

Together with the DOF, the ADB was able to run a project preparation facility to design and prepare climate-smart infrastructure projects that resulted in the fruition of two infrastructure flagship projects.

In 2023, the ADB approved a $303 million loan to reduce flood and climate risks and protect people and livelihoods in three major river basins in the Philippines; and a $1 billion loan to help establish a city-wide public transport project in Davao City, which is the Bank’s largest road-based public transport project in the Philippines.

Meanwhile, Harmsen highlighted the importance of a comprehensive, whole-of-government approach for a robust climate strategy, emphasizing the catalyzing role of finance ministers in mobilizing funds for climate action.

She stressed the critical role of the CFMCA as a safe space for members to facilitate collaboration, exchanging best practices among different countries, addressing common challenges, and ensuring that measures implemented have the desired impact on the ground.

On the other hand, Kokofu outlined practical solutions to the urgent challenges of the climate crisis advocated by CVF through The Vulnerable Twenty (V20) Group, such as innovative financing instruments like debt-for-nature swaps, carbon pricing, and catalytic climate finance vehicles.

He urged COP28 to take proactive actions to alleviate the suffering caused by climate change, particularly emphasizing the impact on women and children.

The event was also attended by the Department of Environment and Natural Resources (DENR) Secretary Maria Antonia Yulo Loyzaga and Ambassador of the Philippines to the United Arab Emirates Alfonso Ferdinand A. Ver.