Financial resources and sound investments are needed to address climate change, reduce emissions, and build resilience. Benefits that flow from these investments, however, dramatically outweigh any upfront costs.
Studies and reports conducted before the Covid-19 pandemic showed that investments in climate action would go far to build a sustainable economy.  
According to a data from the World Bank, the world will need to make significant investment in infrastructure over the next 15 years – around $90tn by 2030.  But it can recoup those investments. Transitioning to a green economy, it found, can unlock new economic opportunities and jobs. An investment of $1, on average, yields $4 in benefits, the UN said in a report on ‘Financing climate action’.
Investment decisions now will determine whether we create or destroy wealth and potential paths to prosperity. It is increasingly clear that the world cannot afford to burn all of its fossil fuel reserves if we are to succeed in limiting climate change to sustainable, livable, levels. The long-term economic reality is that only a fraction of proven fossil fuel reserves can be burned if we are to keep temperature rise to 1.5°C.
This transition will require policies that steer nations towards carbon neutrality well before 2050.
Recently, UN Secretary-General António Guterres set six priority areas for climate action during the Covid-19 recovery phase including: investing in decent jobs; no bail-outs for polluting companies; abandoning fossil fuel subsidies; ending investment in and construction of coal-fired power plants; taking climate risks and opportunities into account in all financial and policy decisions; increasing international co-operation; and ensuring a just transition that leaves nobody behind.
This raises the question of assets that will be abandoned well before their intended date of retirement and will not produce the expected returns. Already, coal mines are being closed as the price of coal becomes increasingly more expensive compared with renewable energy sources. Replacing the costliest 500 gigawatts of coal capacity with solar and wind would cut annual costs by up to $23bn and yield a stimulus worth $940bn, or around 1% of global gross domestic product.
A main aim of the COP26 talks is to secure enough national promises to cut greenhouse gas emissions – mostly from coal, oil and gas – to keep the rise in the average global temperature to 1.5 degrees Celsius.
But how to meet those pledges, particularly in the developing world, is still being worked out, and it will require a lot of money.
UN climate envoy Mark Carney, who assembled the Glasgow Financial Alliance for Net Zero (GFANZ), put the figure at $100tn over the next three decades, and said the finance industry must find ways to raise private money to take the effort far beyond what states alone can do.
“The money is here – but that money needs net zero-aligned projects and (then) there’s a way to turn this into a very, very powerful virtuous circle – and that’s the challenge,” the former Bank of England governor told the summit.