Senior Cabinet ministers including Rachel Reeves and David Lammy are to meet City chiefs for talks on how to unlock UK private sector climate finance and disaster risk insurance for countries facing extreme weather events.
The Foreign Secretary has pledged £12 million from the Government’s tightened aid budget in a bid to enable faster payouts for nations experiencing climate shocks like hurricanes and droughts.
Mr Lammy will join the Chancellor, Energy Secretary Ed Miliband and Environment Secretary Steve Reed for the first meeting between multiple Cabinet ministers and finance leaders on Tuesday.
The group is expected to discuss how the sector can play a part in channelling investment into climate initiatives in emerging markets.
The Government hopes the £12 million for pre-arranged finance for disaster relief and risk insurance will cut the cost of responding to extreme weather events, and the time it takes for countries to recover from such shocks.
This funding is triggered by certain warning signs — such as a forecast or weather event itself — to enable faster payouts, the Foreign Office said.
The Foreign Secretary said: “The climate and nature crisis is the greatest global challenge we face. Failure to act will cause unprecedented environmental damage, fuelling displacement, conflict and famine.
“Tackling this crisis is also a huge opportunity for people and businesses here in the UK, delivering on our Plan for Change. The green sector is worth trillions of pounds, and I’m determined that we seize on the economic growth, jobs and security it offers.
“The City of London, the world’s leading sustainable development financing hub, has a crucial role to play in this.”
It comes after the Government slashed the UK’s overseas aid budget from 0.5% of gross national income to 0.3% in order to pay for increased defence spending.
The UK’s climate finance commitments come from its aid budget.
Speaking to the Commons Foreign Affairs Committee on Tuesday, Mr Lammy said he was “comfortable broadly with the settlement” the Foreign Office received in the spending review despite development cuts.
