Brenna Hughes Neghaiwi

ZURICH (Reuters). – An international climate action bank, a multilateral development bank for emerging markets is required to make it easier to get funds to these countries more efficiently, according to analysts from the U.S bank Citigroup (NYSE:) Tuesday’s announcement came ahead of the U.N. climate summit.

Global leaders will assemble in Glasgow on Oct. 31 for the COP26 U.N. climate summit https://www.reuters.com/subjects/focus-climate-change, aiming to thrash out more ambitious plans to cap global warming and agree the funding needed to help accelerate the planet’s shift towards a lower-carbon economy.

The Paris climate accord has required that developed nations pledge at least $100 billion per year to address climate finance needs in developing countries. Meanwhile, the summit hopes to mobilize trillions of dollars from the private sector to support climate investment.

Citi suggested a global bank to finance low-carbon development, which would be supported by all countries.

According to Citi authors, “We believe that it would be far more efficient for capital to be allocated with the support of an institution completely dedicated to climate change goals.”

This bank might work with the World Bank and African Development Bank to help coordinate climate actions and achieve other objectives.

By adopting a blended approach to finance, which is public-private transactions backed with government-financed institutions and increasing the risk and barriers that investors face when backing projects in emerging economies, it could also help unlock trillions of private sector capital.

Business leaders around the world hope to make a deal during this summit in order to solve issues that have impeded carbon pricing’s ability to reduce worldwide emissions. They want to increase the contribution of companies in slowing down global warming.

In the bank’s 104 page global carbon market report, nine experts conclude that “to stand any chance of keeping within a 1.5 degree Celsius increase in temperature, we must do much, more to reduce emission.” The team, which included nine experts, called for an international effort to price carbon and to remove obstacles for developing countries seeking climate finance.

“We can’t realistically expect emerging markets funding their own carbonization programs and slowing their economic growth,” the authors stated. According to the authors, at least a portion of this goal should fall on developed countries. It is necessary to create a system that allows global efforts to reduce carbon emissions to be funded in an efficient and equitable manner.