Economics of climate change, a look at the reality

A new report released this week by the United Nations Intergovernmental Panel on Climate Change has shed light on the urgency of economic commitments needed to address climate change. The report reveals that without swift action, the world is at risk of surpassing the critical thresholds of 1.5 and 2 degrees Celsius of global warming. Veronica Jakarasi, Head of Climate Finance at AECF, recently appeared on CNBC Africa to discuss the implications of the report and the solutions that can help mitigate the effects of climate change. During the interview, Jakarasi emphasized the importance of government commitments to reduce emissions, as well as the crucial role of the private sector in financing the transition to cleaner energy sources. She highlighted the need for a collaborative effort between the public and private sectors to achieve meaningful progress in combatting climate change. One key point that Jakarasi made was the necessity of blended financing structures to support small enterprises in transitioning to more sustainable practices. She stressed the importance of enabling financing to help these businesses adopt climate-smart solutions and emphasized the growing demand for impact investing in the climate space. Another important aspect discussed in the interview was the role of technology in addressing climate change. Jakarasi acknowledged that while technology alone is not a silver bullet, it can play a crucial role in reducing carbon emissions. She underscored the need for precautionary principles when implementing new technologies, as some solutions may have unintended consequences. In terms of potential solutions, Jakarasi emphasized the need for a holistic approach that involves all stakeholders. She called for increased financing for adaptation efforts and highlighted the importance of bridging the gap for small and medium enterprises in accessing climate finance. Additionally, she emphasized the need for risk assessment in climate technology investments and the importance of fostering innovation in the climate finance sector. Overall, Jakarasi's insights shed light on the complex nature of addressing climate change and the need for a multifaceted approach that involves collaboration across sectors and a focus on sustainable finance solutions.