At the One Planet Summit in December 2017, French President Emanuel Macron cautioned that “we are losing the battle” on climate change and are “nowhere near” being able to contain rising temperatures to between 1.5°C to 2°C. Instead, Macron warned, temperatures could rise by 3.5°C or more by the end of this century.
Altering the trajectory of carbon emissions will require implementing the Nationally Determined Contributions (NDCs), the individual country commitments agreed in Paris. Fiscal policies have a key role to play in this process: about one third of the NDCs include references to specific fiscal incentives -clean-energy subsidies, energy taxes, carbon taxes, or a combination thereof - in their NDCs. However, the effectiveness of finance ministers in incorporating climate action into their work presents mixed results. Although explicit fossil-fuel subsidies have fallen, fiscal policies in most countries continue to favor fossil fuels over renewable energy. Consider these points uncovered by recent studies:
One Planet Summit
Tomorrow, on December 12, 2017, exactly two years after the signing of the historic Paris Agreement, the government of France will be hosting the One Planet Summit in Paris to reaffirm the world’s commitment to the fight against climate change.
At the summit, mayors from cities around the world, big and small, will take center stage with heads of state, private sector CEOs, philanthropists, and civil society leaders to discuss how to mobilize the financing needed to accelerate climate action and meet the Paris Agreement goals.
Much of this has to do with the lack of adequate infrastructure that can defend against the impacts of floods, sea level rise, landslides or earthquakes. . But even when cities know what it takes to become more resilient, most often they do not have access to the necessary funding to realize this vision.
It is estimated that worldwide, investments of more than $4 trillion per year in urban infrastructure will be needed merely to keep pace with expected economic growth, and an additional $1 trillion will be needed to make this urban infrastructure climate resilient. It is clear that the public sector alone, including development finance institutions like the World Bank, will not be able to generate these amounts—not by a long stretch.