– UNDP Resident Representative Azusa Kubota
Sri Lanka’s climate crisis is no longer merely an environmental challenge but a growing economic threat that is inflicting losses exceeding Rs. 50 billion annually, while placing immense pressure on public finances, investment flows and long-term economic stability, according to United Nations Development Programme (UNDP) Resident Representative Azusa Kubota.
Delivering the keynote address at the Climate Summit organised by the Climate Action Committee of the Ceylon Chamber of Commerce, Kubota said the country urgently needs to transform climate ambition into investable projects capable of attracting private capital, strengthening resilience and driving economic growth.
“Climate change is no longer a distant environmental issue. It is already a risk shaping markets, supply chains, trade, investment and human development. It is fundamentally an economic and development issue,” she stressed.
Kubota warned that climate volatility is intensifying in real time, citing forecasts from the World Meteorological Organisation indicating an 80 percent probability of El Niño conditions during the June-August period, rising to over 90 percent later this year.
For Sri Lanka, this could mean weaker rainfall, higher temperatures, greater pressure on agriculture and hydropower generation, and increased risks to water security, food production and business continuity.
The UNDP official noted that the devastating impacts of recent climate-related disasters had exposed the vulnerability of the economy. Following last year’s severe weather events, the Government’s Post Disaster Needs Assessment estimated damages of approximately Rs. 618 billion, while recovery requirements over the next three years are expected to exceed Rs. 1 trillion, with nearly half the losses concentrated in infrastructure.
“Public finance alone will not be sufficient. Private capital must be strategically directed towards bridging these enormous financing gaps,” she said.
Kubota highlighted that global climate finance reached a record USD 1.9 trillion in 2023, while private climate finance surpassed USD 1 trillion for the first time. However, she pointed out that the world still requires approximately USD 6.3 trillion annually through 2030 to remain on track with climate goals.
“The capital exists. But it will only flow at scale where policies, institutions and project pipelines are credible,” she observed.
She said Sri Lanka has made significant progress in strengthening its climate policy framework through the updated National Climate Change Policy, Nationally Determined Contributions (NDC 3.0), sectoral transition plans and the recently Cabinet-approved Climate Finance Strategy.
However, she cautioned that policy ambitions alone are insufficient unless backed by strong implementation mechanisms.
“The private sector does not invest on the basis of ambition alone. Businesses invest where policy is credible, institutions are clear and projects can move from concept to execution,” Kubota said.
She stressed that investors require certainty regarding procurement systems, regulatory frameworks, financing mechanisms, revenue models and governance structures before committing capital.
The UNDP representative identified renewable energy, energy efficiency, industrial decarbonisation, waste management, circular economy solutions, climate-smart agriculture, ecosystem restoration, resilient infrastructure and carbon markets as sectors with substantial investment potential.
She also pointed to Sri Lanka’s emerging carbon market framework under Article 6 of the Paris Agreement as a potentially significant source of climate finance and international partnerships.
“These are not technical details. They are the conditions that determine whether market interest becomes a credible investment,” she said.
Kubota further noted that Sri Lanka’s first Biennial Transparency Report (BTR), submitted to the UN Framework Convention on Climate Change, provides valuable insights into policy, financing and implementation gaps that need to be addressed.
According to her, transparency and accurate climate reporting are increasingly important not only for international compliance but also for investor confidence, risk assessment and financing decisions.
She urged stronger collaboration between government agencies, financial institutions, industry leaders and development partners to accelerate implementation of climate commitments.
“Climate policy succeeds when it becomes economic policy, and when the private sector becomes a co-owner of implementation, resilience and recovery,” she emphasized.
Kubota said resilience should be viewed not as a social cost but as a strategic economic investment.
“Building back better is not simply a humanitarian imperative. It is central to protecting supply chains, lowering long-term costs and strengthening economic confidence,” she noted.
She added that investments in resilient infrastructure, insurance, climate-smart agriculture, water efficiency, early warning systems and sustainable construction could create entirely new markets and competitive advantages for Sri Lanka.
Looking ahead, Kubota called for stronger alignment between NDC 3.0, the country’s long-term economic vision, emerging carbon market frameworks and financing mechanisms.
“The task now is to connect policy to projects, projects to finance, and finance to measurable results for people, businesses and communities,” she said.
She reaffirmed UNDP’s commitment to supporting Sri Lanka through initiatives including climate investment pipeline facilities and the proposed Canopy Fund, a blended finance mechanism designed to mobilise investment for nature-based solutions.
“The decisions we make today will shape not only Sri Lanka’s climate future, but its economic future as well,” Kubota concluded.
By Ifham Nizam
from The Island https://ift.tt/fJOUAzM
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