- December 8, 2022
- Posted by: Bastion team
- Category: World News
THE 27th Conference of Parties to the United Nations Framework Convention on Climate Change, or COP 27, took place in Sharm El Sheikh, Egypt, last month. Against the backdrop of the catastrophic floods which affected 33 million people and resulted in estimated economic losses of $40 billion to Pakistan, Minister for Climate Change Sherry Rehman made a strong case for the establishment of a ‘loss and damage finance facility’ that would help vulnerable countries adapt to and mitigate the impact of climate change.
Nine years ago, UN climate negotiators had agreed to a formal mechanism to combat loss and damage, but no progress was made on this front as wealthy nations were unwilling to be held responsible for their historically high contributions to global emissions. Ahmad Rafay Alam, a Pakistani environmental lawyer and activist, has pointed out that the fire that damaged the Notre Dame cathedral in 2019 resulted in an influx of donations amounting to $877m in two days. However, of the $816m to be raised by the UN to help Pakistan deal with the aftermath of the catastrophic floods, just $90m had been received.
Capital markets provide a unique opportunity to raise climate funding. Coupled with the presence of Islamic financial institutions in critical emerging markets of the Global South, capital markets could help restructure financing from developed to developing nations. Islamic finance tools such as sukuk (a Sharia-compliant bond) and takaful (an Islamic…