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Following COP29, how can countries catalyse investment towards climate action plans?
By the 3Ci Team
In November 2024, COP29 took place in Baku, Azerbaijan.
A focus this year has been to align climate finance contributions to global needs, as well as looking to ramp up the role of the private sector and unblock barriers to investment.
On Tuesday 12th November, Prime Minister, Sir Kier Starmer MP addressed the Summit outlining the critical role the UK must play in climate finance, as well as introducing the new target of reducing UK carbon emissions by at least 81% by 2035 compared to 1990 levels.
“This is a huge opportunity for investment, for UK business, for British workers – if we act now.”
– Prime Minister, Sir Kier Starmer MP, COP29
The Prime Minister also used the Summit to announce the launch of the new CIF Capital Market Mechanism, which could mobilise up to $75 billion in climate capital for developing countries over the next decade.
According to the Prime Minister, its listing on the London Stock Exchange cements London as a green finance capital and showcases the UK at the forefront of global climate investment.
At 3Ci, we hope to see positive outcomes from the discussions around successfully mobilising private finance towards net zero ambitions. However, we understand the challenges that face this from our own experience in the UK where our partnership includes representation from 90% of local government.
Below, we outline some of the challenges the UK faces when it comes to successfully investing in net zero, along with solutions 3Ci’s public-private coalition has been working on – which represent a major opportunity for the UK to establish a global lead on climate finance.
1. Deploying climate finance
Private investors are increasingly attracted to climate finance opportunities. However, they struggle to discover well-developed projects into which they can deploy their investment.
2. Upskilling local authorities
Local Authorities often lack the skills and capacity to plan and develop projects that demonstrate a return on investment and are at the scale needed to be attractive to private investors. Often project development takes too long to become investable, discouraging private sector involvement.
3. Upfront investment
Project development and replicating successful projects like Bristol City Leap requires significant upfront investment, which UK cities no longer have access to through European sources. Private investors are also not a like-for-like replacement for grant funding.
4. Government and procurement
Currently, there’s a lack of a clear framework for local governments to play an effective role in supporting national government objectives, which may lead private investors to lack confidence in their potential. Procurement regulations can also impede the private sector in helping local authorities design projects, further reducing their capacity for project development.
These challenges are well known to 3Ci and are topics that we are actively focused on solving with our work.
Our programmes address key climate finance challenges in the UK by fostering collaboration among local authorities, national government, and the private sector:
- Net Zero Neighbourhoods – A programme of UK-wide demonstrators which test and showcase the delivery of an integrated local net zero investment model.
- National Net Zero Project Pipeline – A national register of local and regionally led investible projects, articulated to a common and combinable format, to deliver net zero outcomes.
- Technical Assistance for Investible Places – A development fund that invests in the necessary capacity and skills to bring projects forward for investment.
- Regional Investor Events – Convening cities and local governments with investors to showcase opportunities, building mutual understanding and confidence.
- Local Innovation Models – A national platform to share innovations rapidly in an easily accessible and standardised format.
Post COP, we will continue to work with the private sector and UK government to unblock barriers to investment and support delivery on the UK’s COP commitments.
Find out more in about our work in our recent publications.