Today, over 80 million tons of CO2 will be emitted from economies around the world. Tomorrow will be the same, as will the day after that. The emitted amounts of CO2 will likely stay in the atmosphere for hundreds, if not thousands of years, further compounding the challenges in reversing the current and expected effects of climate change.
This past December, in Paris, leaders of 195 nations of the world agreed that this trend must be reversed, signaling a historic turning point in the global fight against climate change. The Paris Agreement ratified a global consensus to limit the global average temperature rise to ‘well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.’ Developing nations were at the forefront of this agreement, with almost every one of them setting carbon reduction goals. While the public sector will play a major role in helping achieve the ambitious targets, the sheer volume of investment required to support low-carbon energy, transportation, and agriculture projects throughout the developing world leaves a gap of hundreds of billions of dollars that only the private sector is in a position to fill.
This is Morocco’s Noor 1 concentrated solar power plant, the first phase of what will eventually be the largest concentrated solar power plant in the world. It is an impressive sight—visible even from space–and it holds the promise of supplying over 500 megawatts of power to over a million Moroccans by 2018. It also embodies the power of well-placed concessional financing to stimulate climate action. Low cost, long term financing totaling $435 million provided by the Climate Investment Funds (CIF) has served as a spark to attract the public and private investments needed to build this massive facility, and it is just one example of how the
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When you think of online auctions, what products come to mind? Perhaps electronics, collectibles or concert tickets, but it’s unlikely that you think of climate finance. However, the Pilot Auction Facility for Methane and Climate Change Mitigation (PAF) recently combined the two, and for this, we are thrilled to be awarded Environmental Finance’s Carbon Deal of the Year 2016.
Negotiators in Paris last December achieved a previously unattainable consensus among all countries — large and small, industrialized and developing — on a target for minimizing climate change.
They agreed to hold planetary warming to below 2 degrees Celsius, which can only happen by drastically cutting the greenhouse gas emissions that cause climate change.
Adhering to the target requires a de facto energy revolution that transforms economies and societies by weaning the world from dependence on fossil fuels. The magnitude of the task means strategies and spending on a scale far exceeding previous efforts.
Carbon pricing is increasingly being used by governments and companies around the world as a key strategy to drive climate action while maintaining competitiveness, creating jobs and encouraging innovation. The importance of carbon pricing was amplified in the run up to the global climate change agreement in Paris last December.
As countries move towards the implementation of the Agreement, it is the focus of a World Bank conference in Zurich this week which brings together over 30 developed and developing countries to discuss opportunities and challenges related to the role of carbon pricing in meeting their mitigation ambitions.
It has been nearly three months since 195 nations reached a historic agreement at COP21 in Paris to combat climate change and set the world on a path to a low carbon and more resilient future.
And in a little over a month, heads of state and governments will gather in New York to sign the Paris Agreement. Countries will then have one year to ratify the agreement, which will enter into force after it is ratified by at least 55 countries, representing at least 55 percent of global greenhouse gas emissions.
As we approach the signing of the agreement, it's time for countries and companies to seize the momentum from Paris and move from celebration of a landmark deal to action.
So what needs to happen?
Last Saturday, UN climate negotiators from 195 countries agreed on a historic climate change accord in Paris after two weeks of intense negotiations. While many of us were hoping for a hook that would support the use of markets, we were happily surprised to see the extent and detail on carbon markets that was ultimately included in the Paris Agreement.
According to the International Energy Agency (IEA), full implementation of countries’ submitted pledges for low-carbon development will require USD 13.5 trillion in investments in energy efficiency and low-carbon technologies from 2015 to 2030. That’s almost USD 1 trillion every year. This means all hands need to be on the deck if the global community is to address one of the biggest development challenges of our times.
Today, a group of 26 financial institutions from across the globe, including the World Bank Group, launched five voluntary Principles for Mainstreaming Climate Action within Financial Institution. The Principles are meant to support and guide financial institutions moving forward in adapting to and promoting climate-smart development, and have been developed based on practices implemented by financial institutions worldwide over the last two decades.
The investment needs for low-carbon, climate-resilience growth are substantial. Public resources can bridge viability gaps and cover risks that private actors are unable or unwilling to bear, while the private sector can bring the financial flows and innovation required to sustain progress. For this partnership to reach its full potential, investors need to be provided with the necessary signals, enabling environments, and incentives to confidently invest in emerging economies.