The waste sector is chargeable for roughly 20% of methane emissions, the second largest greenhouse gasoline after carbon dioxide. With out pressing motion and enough local weather finance, waste sector’s methane emissions are projected to double by 2050, jeopardising the power to remain inside a 1.5°C warming situation.
Methane emissions have contributed to a few third of world internet warming because the Industrial Revolution. This short-lived local weather pollutant has a mean lifetime of a decade and 86 occasions the warming potential of CO₂ over 20 years. Anthropogenic (human-caused) methane emissions may be lowered by as much as 45% this decade by low or destructive prices options and readily-available applied sciences, avoiding almost 0.3°C of world warming by 2045. In keeping with the International Methane Evaluation, tackling this super-pollutant may additionally forestall over 255,000 untimely deaths, 775,000 asthma-related hospitalizations, and 73 billion hours of misplaced labour as a result of excessive warmth yearly. Subsequently, abating methane emissions is usually thought-about the simplest technique to remain inside a 1.5°C warming situation.
Regardless of methane’s important contribution to local weather change, CPI’s Panorama of Methane Abatement Finance 2023 reveals that monetary flows to abate methane account for just one% of tracked international local weather finance (USD 13.7 billion out of USD 1.3 trillion for 2021/2022).
Determine 1: Panorama of Methane Abatement Finance in 2021/2022
The waste sector is likely one of the most quickly rising sources of anthropogenic methane emissions, contributing 20% of the entire, because the third-largest supply after fossil fuels and agriculture, forestry, and different land use (AFOLU).
Within the strong waste subsector, methane emissions come up from the decomposition of natural waste in anaerobic environments reminiscent of landfills and waste dumps. Regardless of its important contribution to local weather change, motion to abate methane within the waste sector stays critically underfunded.
Determine 2: Methane abatement finance to the waste sector in comparison with wants and annual mitigation potential
Simply USD 4 billion went to strong waste methane abatement in 2022, far under the estimated USD 12 billion required yearly to realize the subsector’s wants (see Determine 2).
But, UNEP’s International Waste Administration Outlook highlights that, underneath a business-as-usual situation, the complete internet price[1] of waste administration (together with hidden prices reminiscent of air pollution, poor well being, and local weather change impacts) is projected to almost double by 2050—from USD 361 billion (2020 baseline) to USD 640.3 billion (see Determine 24 in UNEP’s 2024 report). Conversely, getting “waste underneath management” by 2050 may keep away from over USD 370 billion in full-net prices, whereas a round financial system situation may obtain internet positive aspects (the place recycling revenues outweigh environmental and well being externalities) of greater than USD 100 billion. Subsequently, tackling waste administration and the subsector’s methane emissions early on can show to avoid wasting lots of of thousands and thousands of {dollars} to all pillars of presidency sooner or later.
At the moment, solely 6% of the tracked strong waste subsector funding was directed towards best-available local weather methods, reminiscent of landfill gasoline seize and meals waste anaerobic digestion (see Determine 3). Natural waste administration, a crucial methane abatement technique together with composting initiatives, acquired a mere USD 22 million of tracked international local weather finance in 2022.
Determine 3: Methane abatement finance flows by technique within the strong waste subsector in 2021/2022
The remaining 94% went to waste incineration, which generates vitality, but in addition converts methane into CO₂, a way that’s thought-about by some to be inefficient and polluting, whereas posing important well being dangers to susceptible communities.
Present focused measures may scale back methane emissions from the waste sector by 29-36 megatons (Mt) per 12 months by 2030, with the best potential by way of improved therapy and disposal of strong waste. This exceeds the entire annual greenhouse gases (GHGs) emitted by electrical energy consumed by US households, or the emissions created by over 190 coal-fired energy vegetation in a single 12 months.
Regardless of 60% of waste-sector methane abatement measures being low-cost or cost-negative, and promising varied co-benefits, varied financing limitations hinder their full potential.
Challenges for scaling methane abatement finance
Provide-side challenges (Funders)
- Availability of funding: There are few devoted funding streams for methane abatement, significantly within the waste sector. Main donors and Multilateral Growth Banks (MDB) have a tendency to not prioritize methane of their local weather methods, resulting in inadequate monetary assist.
- Fragmented funding sources: Funding for methane abatement typically comes from a number of, fragmented sources, making it troublesome to safe complete financing for big initiatives. For instance, a brand new decentralized waste administration facility venture may have to mix grants, loans, and personal investments, every with totally different necessities and compensation timelines, resulting in inefficiencies and delays.
- Lack of strong MRV frameworks: The absence of standardized and clear monitoring, reporting, and analysis (MRV) methods tailor-made to methane abatement is a crucial problem. Efficient MRV frameworks contain systematic approaches to measuring, reporting, and verifying GHG emissions and reductions. With out these, it’s difficult to reveal venture efficacy, precisely estimate precise emission ranges, entice non-public funding, and combine methane-focused targets into broader local weather finance methods.
Demand-side challenges (Challenge implementers)
- Challenge bankability: Whereas international locations have set bold methane discount targets of their Nationally Decided Contributions (NDCs), translating these into viable, bankable initiatives on the native stage stays a major hurdle as a result of a scarcity of technical experience and monetary sources.
- Excessive reliance on municipalities: Over 70% of strong waste administration falls underneath municipal jurisdictions, which frequently lack the experience, regulatory frameworks, and monetary sources to implement methane discount. In rising markets and creating economies (EMDEs), waste administration can signify 20% to 50% of complete municipal budgets, making it difficult to allocate adequate funds for efficient waste administration and associated methane abatement.
- Personal sector engagement: The non-public sector typically perceives methane abatement initiatives as high-risk as a result of uncertainties in regulatory environments, market circumstances, and know-how efficiency. Such initiatives’ perceived low returns on funding in comparison with different local weather investments can restrict non-public sector engagement.
Current progress and rising momentum
However, current developments spotlight rising recognition of the waste sector’s function in methane mitigation:
- International Methane Pledge (GMP) and COP29 Commitments: At COP29, as a part of the Declaration on Lowering Methane from Natural Waste, almost USD 500 million in new grant funding for methane abatement was introduced, bringing the entire mobilized grant funding to over USD 2 billion. Nevertheless, this stays far under the estimated USD 48 billion wanted yearly by 2030.
- LOW-M Initiative and regional actions: The Low-Natural Waste Methane (LOW-M) initiative goals to scale back a million tonnes of methane emissions within the strong waste subsector yearly by 2030, mobilizing as much as USD 10 billion in investments throughout 40 jurisdictions. LOW-M portfolios (goal and strategic plans) created for Lagos, Nigeria, and Santo Domingo, Dominican Republic, exemplify actionable methane discount methods. For instance, Santo Domingo goals to chop over 1,600 t/12 months of methane emissions by 2030 by changing the town’s current La Duquesa dumpsite with a brand new, sanitary landfill.
- Modern regional applications: The Inter-American Growth Financial institution’s Too Good to Waste initiative and the Recycle Organics Caribbean Program have launched ensures and focused funding to speed up methane abatement in Latin America and the Caribbean. In the meantime, the World Financial institution’s Local weather Change Motion Plan on Methane (CH4D) channels sources to scale back methane emissions globally within the agriculture and waste sectors, with profitable initiatives in South Asia and Sub-Saharan Africa.
Whereas these developments are promising, quicker scaling finance for methane abatement is essential to bridge the USD 8 billion annual hole in methane abatement finance wanted within the strong waste subsector by 2030 (see Determine 2). Key suggestions on the way to obtain this are outlined under.
Suggestions for unlocking finance and scaling influence
- Elevate methane abatement in international local weather finance frameworks: Events to the UNFCCC can prioritize methane in local weather finance targets, together with methane-specific concerns within the New Collective Quantified Purpose (NCQG), and set up devoted funding streams for waste sector interventions like natural waste composting, landfill gasoline seize, waste diversion, and anaerobic digestion.
- Strengthen native authorities capacities: Multilateral donors and nationwide governments can present technical help and coaching to municipalities for designing and managing methane-reducing initiatives and develop grant and concessional financing applications for high-impact interventions.
- Mobilize blended finance devices: Growth Finance Establishments (DFI) and Multilateral Growth Banks (MDB) can leverage blended finance to de-risk investments in waste-specific methane abatement initiatives by ensures and concessional loans, and foster public-private partnerships for waste administration options.
- Develop investable venture pipelines: Suppliers of methane abatement finance can help rising markets and creating economies in creating investable venture pipelines for waste sector initiatives, offering sources for feasibility research and venture design, and strengthen insurance policies and laws to make sure certainty and stability for buyers.
A crucial time for scaling methane abatement finance
Coming into in 2025, the world has a crucial five-year window to ship on the International Methane Pledge and scale back 30% of methane emissions[2] by 2030. Quickly bridging methane abatement finance within the strong waste subsector by 2030 and channelling it into high-impact options reminiscent of natural waste administration is crucial. Specializing in modern finance devices, and community-centered options also can considerably contribute to broader Sustainable Growth Targets (SDGs), together with first rate work and financial progress (SDG 8), good well being and well-being (SDG 3), and sustainable cities and communities (SDG 11), making a extra sustainable, resilient, and equitable future for all.
Acknowledgments
The authors want to thank CPI’s Baysa Naran, Ira Purnomo and Berliana Yusuf for his or her contributions to earlier drafts of this weblog/article, in addition to Kirsty Taylor and Jana Stupperich for reviewing and enhancing.
Footnotes
[1] Full prices embody hidden prices reminiscent of air pollution, poor well being, and local weather change impacts. Web prices additionally account for positive aspects from recycling minus externalities from environmental and well being impacts.
[2] From 2020 ranges
The waste sector is chargeable for roughly 20% of methane emissions, the second largest greenhouse gasoline after carbon dioxide. With out pressing motion and enough local weather finance, waste sector’s methane emissions are projected to double by 2050, jeopardising the power to remain inside a 1.5°C warming situation.
Methane emissions have contributed to a few third of world internet warming because the Industrial Revolution. This short-lived local weather pollutant has a mean lifetime of a decade and 86 occasions the warming potential of CO₂ over 20 years. Anthropogenic (human-caused) methane emissions may be lowered by as much as 45% this decade by low or destructive prices options and readily-available applied sciences, avoiding almost 0.3°C of world warming by 2045. In keeping with the International Methane Evaluation, tackling this super-pollutant may additionally forestall over 255,000 untimely deaths, 775,000 asthma-related hospitalizations, and 73 billion hours of misplaced labour as a result of excessive warmth yearly. Subsequently, abating methane emissions is usually thought-about the simplest technique to remain inside a 1.5°C warming situation.
Regardless of methane’s important contribution to local weather change, CPI’s Panorama of Methane Abatement Finance 2023 reveals that monetary flows to abate methane account for just one% of tracked international local weather finance (USD 13.7 billion out of USD 1.3 trillion for 2021/2022).
Determine 1: Panorama of Methane Abatement Finance in 2021/2022
The waste sector is likely one of the most quickly rising sources of anthropogenic methane emissions, contributing 20% of the entire, because the third-largest supply after fossil fuels and agriculture, forestry, and different land use (AFOLU).
Within the strong waste subsector, methane emissions come up from the decomposition of natural waste in anaerobic environments reminiscent of landfills and waste dumps. Regardless of its important contribution to local weather change, motion to abate methane within the waste sector stays critically underfunded.
Determine 2: Methane abatement finance to the waste sector in comparison with wants and annual mitigation potential
Simply USD 4 billion went to strong waste methane abatement in 2022, far under the estimated USD 12 billion required yearly to realize the subsector’s wants (see Determine 2).
But, UNEP’s International Waste Administration Outlook highlights that, underneath a business-as-usual situation, the complete internet price[1] of waste administration (together with hidden prices reminiscent of air pollution, poor well being, and local weather change impacts) is projected to almost double by 2050—from USD 361 billion (2020 baseline) to USD 640.3 billion (see Determine 24 in UNEP’s 2024 report). Conversely, getting “waste underneath management” by 2050 may keep away from over USD 370 billion in full-net prices, whereas a round financial system situation may obtain internet positive aspects (the place recycling revenues outweigh environmental and well being externalities) of greater than USD 100 billion. Subsequently, tackling waste administration and the subsector’s methane emissions early on can show to avoid wasting lots of of thousands and thousands of {dollars} to all pillars of presidency sooner or later.
At the moment, solely 6% of the tracked strong waste subsector funding was directed towards best-available local weather methods, reminiscent of landfill gasoline seize and meals waste anaerobic digestion (see Determine 3). Natural waste administration, a crucial methane abatement technique together with composting initiatives, acquired a mere USD 22 million of tracked international local weather finance in 2022.
Determine 3: Methane abatement finance flows by technique within the strong waste subsector in 2021/2022
The remaining 94% went to waste incineration, which generates vitality, but in addition converts methane into CO₂, a way that’s thought-about by some to be inefficient and polluting, whereas posing important well being dangers to susceptible communities.
Present focused measures may scale back methane emissions from the waste sector by 29-36 megatons (Mt) per 12 months by 2030, with the best potential by way of improved therapy and disposal of strong waste. This exceeds the entire annual greenhouse gases (GHGs) emitted by electrical energy consumed by US households, or the emissions created by over 190 coal-fired energy vegetation in a single 12 months.
Regardless of 60% of waste-sector methane abatement measures being low-cost or cost-negative, and promising varied co-benefits, varied financing limitations hinder their full potential.
Challenges for scaling methane abatement finance
Provide-side challenges (Funders)
- Availability of funding: There are few devoted funding streams for methane abatement, significantly within the waste sector. Main donors and Multilateral Growth Banks (MDB) have a tendency to not prioritize methane of their local weather methods, resulting in inadequate monetary assist.
- Fragmented funding sources: Funding for methane abatement typically comes from a number of, fragmented sources, making it troublesome to safe complete financing for big initiatives. For instance, a brand new decentralized waste administration facility venture may have to mix grants, loans, and personal investments, every with totally different necessities and compensation timelines, resulting in inefficiencies and delays.
- Lack of strong MRV frameworks: The absence of standardized and clear monitoring, reporting, and analysis (MRV) methods tailor-made to methane abatement is a crucial problem. Efficient MRV frameworks contain systematic approaches to measuring, reporting, and verifying GHG emissions and reductions. With out these, it’s difficult to reveal venture efficacy, precisely estimate precise emission ranges, entice non-public funding, and combine methane-focused targets into broader local weather finance methods.
Demand-side challenges (Challenge implementers)
- Challenge bankability: Whereas international locations have set bold methane discount targets of their Nationally Decided Contributions (NDCs), translating these into viable, bankable initiatives on the native stage stays a major hurdle as a result of a scarcity of technical experience and monetary sources.
- Excessive reliance on municipalities: Over 70% of strong waste administration falls underneath municipal jurisdictions, which frequently lack the experience, regulatory frameworks, and monetary sources to implement methane discount. In rising markets and creating economies (EMDEs), waste administration can signify 20% to 50% of complete municipal budgets, making it difficult to allocate adequate funds for efficient waste administration and associated methane abatement.
- Personal sector engagement: The non-public sector typically perceives methane abatement initiatives as high-risk as a result of uncertainties in regulatory environments, market circumstances, and know-how efficiency. Such initiatives’ perceived low returns on funding in comparison with different local weather investments can restrict non-public sector engagement.
Current progress and rising momentum
However, current developments spotlight rising recognition of the waste sector’s function in methane mitigation:
- International Methane Pledge (GMP) and COP29 Commitments: At COP29, as a part of the Declaration on Lowering Methane from Natural Waste, almost USD 500 million in new grant funding for methane abatement was introduced, bringing the entire mobilized grant funding to over USD 2 billion. Nevertheless, this stays far under the estimated USD 48 billion wanted yearly by 2030.
- LOW-M Initiative and regional actions: The Low-Natural Waste Methane (LOW-M) initiative goals to scale back a million tonnes of methane emissions within the strong waste subsector yearly by 2030, mobilizing as much as USD 10 billion in investments throughout 40 jurisdictions. LOW-M portfolios (goal and strategic plans) created for Lagos, Nigeria, and Santo Domingo, Dominican Republic, exemplify actionable methane discount methods. For instance, Santo Domingo goals to chop over 1,600 t/12 months of methane emissions by 2030 by changing the town’s current La Duquesa dumpsite with a brand new, sanitary landfill.
- Modern regional applications: The Inter-American Growth Financial institution’s Too Good to Waste initiative and the Recycle Organics Caribbean Program have launched ensures and focused funding to speed up methane abatement in Latin America and the Caribbean. In the meantime, the World Financial institution’s Local weather Change Motion Plan on Methane (CH4D) channels sources to scale back methane emissions globally within the agriculture and waste sectors, with profitable initiatives in South Asia and Sub-Saharan Africa.
Whereas these developments are promising, quicker scaling finance for methane abatement is essential to bridge the USD 8 billion annual hole in methane abatement finance wanted within the strong waste subsector by 2030 (see Determine 2). Key suggestions on the way to obtain this are outlined under.
Suggestions for unlocking finance and scaling influence
- Elevate methane abatement in international local weather finance frameworks: Events to the UNFCCC can prioritize methane in local weather finance targets, together with methane-specific concerns within the New Collective Quantified Purpose (NCQG), and set up devoted funding streams for waste sector interventions like natural waste composting, landfill gasoline seize, waste diversion, and anaerobic digestion.
- Strengthen native authorities capacities: Multilateral donors and nationwide governments can present technical help and coaching to municipalities for designing and managing methane-reducing initiatives and develop grant and concessional financing applications for high-impact interventions.
- Mobilize blended finance devices: Growth Finance Establishments (DFI) and Multilateral Growth Banks (MDB) can leverage blended finance to de-risk investments in waste-specific methane abatement initiatives by ensures and concessional loans, and foster public-private partnerships for waste administration options.
- Develop investable venture pipelines: Suppliers of methane abatement finance can help rising markets and creating economies in creating investable venture pipelines for waste sector initiatives, offering sources for feasibility research and venture design, and strengthen insurance policies and laws to make sure certainty and stability for buyers.
A crucial time for scaling methane abatement finance
Coming into in 2025, the world has a crucial five-year window to ship on the International Methane Pledge and scale back 30% of methane emissions[2] by 2030. Quickly bridging methane abatement finance within the strong waste subsector by 2030 and channelling it into high-impact options reminiscent of natural waste administration is crucial. Specializing in modern finance devices, and community-centered options also can considerably contribute to broader Sustainable Growth Targets (SDGs), together with first rate work and financial progress (SDG 8), good well being and well-being (SDG 3), and sustainable cities and communities (SDG 11), making a extra sustainable, resilient, and equitable future for all.
Acknowledgments
The authors want to thank CPI’s Baysa Naran, Ira Purnomo and Berliana Yusuf for his or her contributions to earlier drafts of this weblog/article, in addition to Kirsty Taylor and Jana Stupperich for reviewing and enhancing.
Footnotes
[1] Full prices embody hidden prices reminiscent of air pollution, poor well being, and local weather change impacts. Web prices additionally account for positive aspects from recycling minus externalities from environmental and well being impacts.
[2] From 2020 ranges
