World Bank Reports on Climate Financing Gap for Developing Countries

TEMPO.CO, Jakarta - The Executive Director of the World Bank for Southeast Asia Wempi Saputra said that there is a significant financing gap for climate action, especially for green economy transition in developing countries. 

"Yearly fund flow to finance climate action in developing countries, especially low-income countries, and middle-income countries are less than US$425 billion," Wempi said during a “Financing the Green Transition of Developing Country” webinar in Jakarta on Tuesday, September 6, 2023. However, he added, the need for financing will be quadrupled by 2023.

Despite the long-term benefits, green transition in a wider concept, as in climate transition, will spend more than trillions of budget to invest in the environment of low-income and middle-income countries. It is estimated that these countries will need US$1.7 trillion to US$3.4 trillion for climate financing.

Wempi said that the green economy transition is necessary due to the overconsumption of natural resources including fossil fuels that is responsible for further degradation of climate and ecology. Therefore, a comprehensive change in natural resource consumption is needed.

The main challenges for the green transition are not only about limiting consumption but also ensuring Indonesia's economic cycle can continue rolling despite the limitations.

"Green economy transition could be the new drive for economic growth and establish the business foundation and sustainable economy, offering a comprehensive service and a better chance to reduce emissions," Wempi concluded.

ANTARA

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