COP 28 Resolution 24/57: Supported by GFANZ, eight export credit agencies, in partnership with the Innovation and Knowledge Hub at the University of Oxford, Future of Climate Cooperation, and the UN Environment Programme Finance Initiative (UNEP FI) launched the UN-convened Net-Zero Export Credit Agencies Alliance (NZECA). With being confirmed to become a partner of the Race to Zero campaign, NZECA will help decarbonize global trade and facilitate joint action from public and private finance.
Resolution point 24 from the UAE Global Climate Action at COP 28 in 2023 highlights the launch of the UN-convened Net-Zero Export Credit Agencies Alliance (NZECA), supported by the Glasgow Financial Alliance for Net Zero (GFANZ) and other partners. The NZECA aims to decarbonize global trade and facilitate joint action from public and private finance. Let’s analyze the positive and negative aspects of this resolution:
Positive Side:
Decarbonizing Global Trade: The establishment of the Net-Zero Export Credit Agencies Alliance (NZECA) reflects a commitment to decarbonizing global trade. Export credit agencies play a significant role in facilitating international trade by providing financing and insurance to exporters, and their alignment with net-zero goals can drive significant emissions reductions across sectors.
Partnership and Collaboration: The involvement of various partners, including GFANZ, the University of Oxford’s Innovation and Knowledge Hub, the Future of Climate Cooperation, and the UN Environment Programme Finance Initiative (UNEP FI), underscores the importance of partnership and collaboration in addressing climate change. By leveraging the expertise and resources of these partners, the NZECA can foster joint action from public and private finance toward decarbonization efforts.
Alignment with Race to Zero Campaign: The confirmation of NZECA to become a partner of the Race to Zero campaign further highlights its commitment to driving emissions reductions. The Race to Zero campaign brings together a diverse range of stakeholders committed to achieving net-zero emissions, and NZECA’s participation can enhance coordination and collaboration toward this shared goal.
Negative Side:
Implementation Challenges: While the launch of NZECA is a positive step, there may be challenges in effectively implementing its objectives. Decarbonizing global trade requires significant changes in policies, practices, and investments across multiple sectors, which may face resistance or obstacles in implementation.
Ensuring Ambitious Targets: The effectiveness of NZECA in decarbonizing global trade will depend on the ambition and commitment of its member export credit agencies. Ensuring that member agencies set ambitious targets and take concrete actions to reduce emissions will be crucial for NZECA to achieve meaningful impact.
Equity Considerations: Decarbonizing global trade should also consider equity considerations, ensuring that the transition to low-carbon trade does not disproportionately burden developing countries or vulnerable communities. Balancing environmental objectives with social and economic considerations will be essential for the success of NZECA.
In conclusion, while Resolution point 24 at the UAE Global Climate Action at COP 28 presents a positive step in decarbonizing global trade through the launch of NZECA, it also faces challenges related to implementation, setting ambitious targets, and addressing equity considerations. Overcoming these challenges will be crucial for NZECA to effectively contribute to global efforts to combat climate change and achieve net-zero emissions.
