This weekend, the leaders of the G7 committed to a series of actions that mark their first serious recognition of the economic transformation that is ahead of us.
Collectively, they recognized the need to decarbonize the global economy, enshrining in economic cooperation what the scientists in the IPCC told us last year in their Fifth Assessment Report. They called for ambition at the Paris climate talks this year – not new, but they recognized that they, individually and collectively, need to be in the upper part of the ambition bracket and that that means at least a “transformation of the energy sector by 2050.”
They talked about the mobilization of capital for this transformation, as well as ending the increasingly profligate use of harmful fossil fuel subsidies. Recognizing the need for an orderly transition to low-carbon growth as quickly and as smoothly as possible, they took on some degree of leadership around the pledge to provide $100 billion in climate finance for developing countries from public and private sources before 2020. More on that in a moment.
At this year's climate ministerial of the World Bank Group/IMF Spring Meetings, 42 finance and development ministers discussed phasing out fossil fuel subsidies, putting a price on carbon and mobilizing the trillions of dollars in finance needed for a smooth, orderly transition to a low-carbon economy. World Bank Group Vice President and Special Envoy for Climate Change Rachel Kyte describes the conversations in the room and the key takeaways.
In a video shown at the UN Climate Leadership Summit on Sept. 23, 2014, German Chancellor Angela Merkel talks about her country's support for carbon pricing and how it can drive low-carbon growth.
In January, World Bank Group President Jim Yong Kim urged the audience at the World Economic Forum in Davos to look closely at a young, promising form of finance for climate-smart development: green bonds. The green bond market had surpassed US$10 billion in new bonds during 2013. President Kim called for doubling that number by the UN Secretary-General's Climate Summit in September.
Just a few days ago—well ahead of the September summit—the market blew past the US$20 billion mark when the German development bank KfW issued a 1.5 billion Euro green bond to support its renewable energy program.
I knew there was something different about Carbon Expo this year as I looked up during the opening ceremony and noticed the room was packed, with standing room only for late arrivals.
That is when I first asked myself: I know why I am here, but why are you here? I felt like a veteran carbon warrior among a sea of young fresh-faced carbon players.
I started coming to Carbon Expo in 2004, and this year, for the first time, there are plenty of people I don’t recognize. So today I took some time to ask people what they were doing here and why there seems to be a growing interest in carbon markets.
About 80 government representatives from more than 30 countries just concluded the 9th Assembly of the Partnership for Market Readiness (PMR) – three days of rich discussions on various domestic policy instruments that put a price on carbon, such as emissions trading systems (ETS), carbon taxes, and payments for emission reductions. At the same time, private sector firms are arriving in Cologne to attend Carbon Expo which runs until the end of the week.
A timely “rendezvous” between the two sectors – public and private – took place today on the subject of carbon pricing policies. The event, hosted by the World Bank’s PMR, the International Finance Corporation, and the International Emissions Trading Association (IETA), invited leading private firm and government representatives to discuss the initial findings of a study by the PMR and the Center for Climate and Energy Solutions (C2ES), which interviewed three companies – Rio Tinto, Shell, and U.S. utility Pacific Gas & Electric (PG&E) – on how they are preparing for a carbon price.
It is not often that you find Indigenous Peoples from around the world meeting in one of the most important baroque castles of Germany. Perched on a cliff, with a natural moat created by the river Lahn, the castle of Weilburg allows a bird’s eye view of the surrounding forest landscape.
These forests were not always lush and thriving. Centuries before, the construction of the castle led to massive logging in the adjacent forests and finally the ruling aristocrat ordered restricted use of timber for construction and introduced a new building code. As a result, Weilburg became the national center of a novel construction technique using clay and straw, which is now seen in towns across Germany.
Coincidently, a new approach to tackling deforestation is also what 80 Indigenous Peoples’ leaders, government representatives, civil society practitioners and international experts from 24 countries discussed this week at a three day workshop in Weilburg’s castle.
The central challenge was to identify practical approaches to ensure the full and effective participation of Indigenous Peoples in REDD+, a performance-based mechanism for reducing emissions from deforestation and forest degradation. The meeting was jointly organized by the Federal Ministry for Economic Cooperation and Development (BMZ), the Forest Carbon Partnership Facility (FCPF) and the UN-REDD Programme.
Under current trajectories, the world is headed toward a world that will be 4 degrees warmer by the end of this century. Despite the mounting concern around this scenario, many countries throughout the Europe and Central Asia (ECA) region are understandably reluctant to introduce more ambitious climate policies because they are worried about the negative consequences on competitiveness or energy affordability, for instance.
However, as we try to show in our recent publication, Growing Green: the Economic Benefits of Climate Action, strategic investment in climate action can benefit these countries in the medium- and long-terms – thus offsetting the negative consequences of these investments.
Above all, countries need to focus on three types of climate action: climate action as a co-benefit, climate action as an investment, and climate action as insurance.