At its most human level, growth is the purpose of life. Avoid the death trap of under 5 child mortality - something roughly 13,400 children per day fail to do - and then hope for an equal chance at thriving to old age in an increasingly chaotic world.
At the level of institutions that shape the lives of all humans, growth is about status, power, wealth - motivations which drive an ever growing economy - but also risk destroying our world and everyone on it.
Can we walk the tightrope of global growth? Can we with a deft hand leverage the incentives that pull and shape investment, and the laws and limits which keep it from going off the rails, toward a world which is prosperous, healthy, and fair?
While not always named so explicitly, this is a fundamental question debated at global moments like the United Nations Climate Change Conference in Baku (COP 29), and ones to come such as the Fourth International Conference on Financing for Development.
Dubbed the “climate finance COP”, COP29 brought together global leaders, industry and - when their voices are heard - the human beings directly affected, to debate this complex question, which is equal part earnings and ethics.
This COP sought to refresh a target set back at COP15 in 2009, where developed countries committed to a collective goal of mobilizing USD 100 billion per year by 2020 for climate action in developing countries, which was subsequently extended to 2025. That target has ended up being both underwhelming and too ambitious at the same time - it falls far short of the projected $2.4 trillion per year needed to keep climate change goals within reach, and yet, even at that level of funding, proved to be a real challenge to mobilize.
Against this backdrop, at COP29 the Parties negotiated a New Collective Quantified Goal on Climate Finance (NCQG), with calls from countries as diverse as India, Saudi Arabia and Small Island Developing States for at least $1 trillion of financial support flowing from developed to developing nations. The final agreement was for $300 billion.
As important as the number itself is the form it took - developing and emerging economies wished to see this financing coming primarily as grants and concessional finance to help impoverished nations and vulnerable groups, while others argue that the weight of private markets - and the commercial objectives that come with them - must always be an essential part of the solution.
In an environment of tightening national budgets, never-ending polycrisis, and shifting political sands, dramatic gains in grant and concessional finance do not feel like the most likely scenario.
But in a scenario of more market-led climate financing - who benefits? The fundamental tension between commercial objectives and development goals is that the people and places that most need the financing are rarely attractive investments. As one example, smallholder farmers produce more than a third of the world’s food, and yet receive less than 1% of climate finance.
Can we bridge this gap between growth as an economic measure, and growth as a measure of human wellbeing? Is it possible to mobilize the full spectrum of capital for this grand challenge, in a way that truly leaves no one behind? While a New Collective Quantified Goal which meets the very diverse needs of global stakeholders may prove too difficult to achieve at this time, there are some signs of progress.
Past, present and future COP Presidencies have endorsed the COP29 Baku Initiative for Climate Finance, Investment and Trade (BICFIT) Dialogue, bringing together UN agencies, multilateral development banks and multilateral climate funds to ensure finance, investment, and trade sit at the center of a more continuous leadership agenda through future COPs. In support, investor groups representing more than $10 trillion in assets are uniting to develop a shared vision and action plan to catalyze more private capital into climate markets.
There are also increasing hopes that carbon markets will further progress as a viable, high integrity part of the solution. COP29 saw consensus on the International Carbon Market Standards, known as Article 6, an essential building block toward mobilizing quality, climate financed projects as investable and tradable commodities. This may be transformative for sectors like food and agriculture, with Nature Based Solutions such as forestry and land use already making up nearly half of all carbon projects in the voluntary market.
One thing that is very clear - for growth and for equity - is that this money must start to flow in ways that put human health front and center to the climate agenda. If we don’t dramatically change course, in 2050 a quarter of a million more people will die each year from malnutrition, malaria, diarrhea and heat stress , while two billion children will face more frequent heatwaves which put them at greater health risk.
Food systems transformation must be at the heart of this change, because it uniquely sits at the intersection of healthy and sustainable growth. Today, billions of dollars in subsidies go to corn and soybean production that never reaches a human or even an animal's mouth and contribute substantially to the more than one-third of total greenhouse gas emissions caused by the food system, while hundreds of millions go hungry and billions cannot afford a healthy diet. Changing this will require ambitious coordinated action, and Country-led initiatives like the Alliance of Champions for Food System Transformation, and the Global Alliance Against Hunger and Poverty launched out of the G20 offer an exciting way forward here.
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One way to bridge the gap is technology, which has the potential to break through market failures and create more inclusive and scalable solutions. An example is the $1 billion announced to AIM for Scale to leverage technology to scale up weather services to hundreds of millions of farmers across Asia, Africa and Latin America.
For our collective future, we must build on this progress with clear eyes for what truly drives financing at scale, and with the needs of humanity in our hearts.
Matthew Freeman is Executive Director of Stronger Foundations for Nutrition
