Latin American governments of the Under2 Coalition call for increased funding and financing to accelerate climate action

8 November 2021, 10:00 UTC 3 min read

Home to 25% of Earth´s forests and arable land, the world´s greatest amount of biodiversity, and the highest level of urbanisation of any region, Latin America is key to climate action. Therefore, 50 Latin American state and regional governments of the Under2 Coalition which represent more than 200 million persons and their economies contribute over 1.65 trillion USD to global GDP are calling on donors, investors, funders, banks and other institutions to close the financing gap needed to accelerate climate action here and boost global efforts in the fight against climate change.

The Under2 Coalition’s Latin American members have been among the most active in their ambition and commitment to reach net zero emissions by 2050. 11 have joined the United Nations’ Race to Zero campaign and four have become ‘Net Zero Leaders’ in the Net Zero Futures programme: showing other governments from around the world how to set realistic and achievable net goals.

Many other Latin American governments have also institutionalised plans to meet their climate targets, and so demonstrated not only their intention to reach net zero but the pathways they can and will put in place to get there. As part of this commitment eight have laid out ambitious actions ahead of 2030 and recognized the need to make progress in this vital climate decade.

However, resources are often limited in our states and regions: reducing our ability to take the action we know we need to take. That’s why, at COP26, we’re calling on the international community to help us act quickly and go further by supporting funding, investment and financing to:

Support our efforts to achieve a faster energy transition through investments in:

Distributed energy production (solar photovoltaic, wind or renewable generation)
Energy efficiency measures
Electrification of public transport systems
Technology improvements to accelerate zero emission vehicle (ZEV) production
Charging infrastructure for ZEVs
Non-motorized mobility measures

Support our efforts to increase nature-based solutions through investments in:

Local conservation mechanisms
Deforestation-free agricultural and forestry commodities
Large scale restoration of forests and key vulnerable ecosystems
Green infrastructure in cities including water sensitive urban design

We invite you to connect and strengthen the subnational financial engineering capabilities in our region necessary to make these commitments, plans and actions a reality, by building a subnational financial market that can be attractive for investors and donors. This can include:

Funding for pilot or technical assistance projects, as well as project preparation
Blended finance vehicles for adapted subnational loans and credits for resilient infrastructure
Direct investment in new technologies supporting the acceleration and implementation of our policies for transition
Incentive mechanisms for conservation (like ecosystem services payments funding)
Green credit lines and dedicated subnational guarantee systems and funds
Local certification mechanisms
Funding for agricultural and forestry productive reconversion
Direct investment in Advanced Weather Services and early warning systems

Our commitment and ambition is there and we are both willing and able to make the changes necessary to protect our shared planet.

In response to this, Climate Group, as the Secretariat of the Under2 Coalition, is announcing a new strategic partnership with the Alliance of Subnational Development Banks in Latin America and the Caribbean, an initiative embedded in IDFC’s Finance In Common Initiatives, to kickstart this financing framework for the region. We call on more investors, asset managers and donors to join forces and close the financing gap to make net zero a reality.

Notes:

The Alliance of Subnational Development Banks for Latin America and the Caribbean was launched in April 2021. Its Steering Committee is composed of 22 members gathered in the following constituencies: SDBs, Multilateral Development Banks (MDBs) and Development Finance Institutions (DFIS), International Organizations, Local Government Associations, Think Tanks and Academia.

Latin America members of the Under2 Coalition:

Argentina