4 ways to pay for the climate crisis, according to Al Gore and other leaders at Davos

• Just 2% of philanthropic finance goes to nature and climate — Davos panelists want to see more.
• We need to be investing $9 in renewable energy per dollar in fossil fuel, according to a top economist.
• And we need to scale down anti-climate finance, says Al Gore.

There's a financing gap in our climate pledges and we need to find a way to fill it quickly — that's the warning from panelists at the World Economic Forum's annual meeting in Davos, Switzerland, this week.

In his welcoming remarks, World Economic Forum founder Klaus Schwab said that the world is currently "confronted with unprecedented and multiple challenges." If the expert sessions held on Tuesday morning are anything to go by, the most pressing of those challenges is financing the climate crisis.

John Kerry, US Special Presidential Envoy for Climate, opened the proceedings with an at-times gloomy outlook. "We're not doing everything we promised," he said. "I am convinced that we will get to a low-carbon economy. I'm not convinced we're going to get there in time."

However, Kerry said, the solution is right in front of us: "Money, money, money."

"We have to find a way to get really serious with getting the corporate world on board around the world," he said, adding that while the private sector is stepping up, it's not enough. He said companies are pledging to get to net zero by 2050, but they don't know how they're going to get there.

"The secret to this is partnership," said Kerry. "We need to bring the private sector to the table."

Philanthropy is one part of the equation

Out of the estimated $2.3 trillion of philanthropic funding each year, only 2% goes to nature and climate. Panel speakers said philanthropy is often overlooked when thinking about the climate finance gap and that it could act as vital leverage.

Rania Al-Mashat, Egypt's minister of international cooperation who played a key role in 2022's COP27 conference, called philanthropy the "prominent third 'P'" alongside "public" and "private."

Former Governor of the Bank of England Mark Carney added that "we need layers of capital to catalyze investments that need to happen."

Panelists cited the Just Energy Transition Partnership — known as JETP — as an example of philanthropy in action. A JETP deal between Indonesia and G20 countries mobilized $20 billion of funding to help Indonesia phase out fossil fuels and transition to renewable energy. The funding utilized philanthropic capital.

Michael Wilkins, executive director and professor of practice at the Centre for Climate Finance & Investment at Imperial College Business School, welcomed the comments made by panelists at Davos.

"Philanthropy has been crucial in research and development for climate finance and its development," Wilkins told Insider.

The private sector has a key role to play

Elsewhere at Davos, Al Gore told attendees that we are "going through a sustainability revolution that has the scale of the industrial revolution coupled with the pace of the digital revolution."

The key thing about the sustainability revolution? We need to finance it. "The private sector has to join the public sector," Gore said.

The solution is not just about scaling up climate investment, though, according to Gore. "We desperately need to scale down anti-climate finance," he said.

Gore conjured an unusual image to help illustrate his point: Imagine you're running a race, he said, and there are two bulldogs, each tugging at one of your pant legs and holding you back. Those bulldogs are oil and gas, which, Gore added, are "fighting tooth and nail in every form" to stay ahead.

The world's big development banks need reform

Another solution touted by Gore was to reform multilateral development banks, such as the European Bank for Reconstruction and Development (EBRD) — the cross-government organizations that give financial assistance to developing countries. Reform would include ending fossil-fuel financing and a leadership committed to promoting sustainable development.

Wilkins agreed, adding that reforming multilateral banks was a key outcome of COP27. "The multilaterals have been described as 'not fit for purpose' when it comes to climate finance, largely due to their risk-averse nature," Wilkins told Insider. "Reform is being considered, especially by the World Bank."

More investment is crucial

While panel discussions at Davos highlighted the multiple solutions to financing the climate-funding gap, Colombian economist Mauricio Cárdenas brought things back to basics: above all, we need investment by both public and private sectors.

Cárdenas cited data from the International Energy Agency on the amount of investment in clean energy relative to fossil fuel. Right now, he said, there's $1.50 invested in renewable energy for every $1 invested in fossil fuels.

"To get to the goals in 2030, we need to be investing $9 in renewable energy per dollar in fossil fuel," Cárdenas said. "We're still far away from there."