When the world united around the historic Paris climate agreement, in 2015, the message was clear: It’s unfair to pass the burden of climate change to future generations.
We now need to put words into action. This week, leaders from 20 of the largest economies are meeting in Hamburg to find solutions to global challenges. Climate change will be front and center.
As the co-chairs of the Carbon Pricing Leadership Coalition (CPLC), we want to accelerate climate action and reaffirm our commitment to carbon pricing. The discussions in Germany are a great opportunity to keep the momentum going.
Launched during the Paris climate talks, the CPLC now consists of 30 governments and over 140 businesses, all fighting for a common cause: to advocate for the pricing of carbon emissions across the world. We are calling for bold leadership from everyone – governments, companies, academia and civil society. The CPLC provides a forum for these groups to show collaborative leadership on carbon pricing.
A few years ago, this would have seemed a strange question, as debt management and climate policy have traditionally been regarded as unrelated fields. But at a workshop at the annual Debt Management Forum in Vienna on May 22, 2017, debt managers from 50 developing countries discussed the role of emerging debt instruments such as green bonds and blue bonds, in raising capital for climate-friendly projects that range from reforestation to renewable energy.
While green and blue bonds resemble more traditional debt instruments in terms of structure and returns, they represent a novel approach to climate finance. Created just ten years ago, the total value of green bonds has grown at a spectacular pace, reaching US$82.6 billion in 2016. By the end of 2017, the total value of green bonds will likely exceed US$100 billion.
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.
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.
The United Nations has designated 31 October as World Cities Day to highlight the many challenges and opportunities of global urbanization.
In his new video blog series, Ede Ijjasz-Vasquez, Senior Director of the World Bank’s Social, Urban, Rural and Resilience Global Practice (GPSURR), speaks with urban development specialists about what it takes to build sustainable cities – communities that are environmentally-friendly, competitive, inclusive, and resilient to disasters of today and disasters of tomorrow.
During his visit to Washington last week, China’s President Xi Jinping confirmed that the world’s largest greenhouse gas emitter, which has pledged to reduce its carbon intensity and reach a peak of overall emissions by 2030, will use a cap-and-trade market approach to help realize this.
China already has 7 pilot markets in cities and provinces in place that cover 1 billion tons of greenhouse gas emissions annually. Under the national scheme, now to go live in 2017, this could increase to 4 billion tons according to Chinese researchers - making it the world’s largest national emissions trading system.
It’s an exciting step and demonstration of China’s commitment to achieve its low carbon goals.
More than two decades ago, the world agreed on the need to confront climate change.
The U.N. Framework Convention on Climate Change (UNFCCC) emerged in 1992, spawning a variety of negotiating forums with the goal of preventing catastrophic impacts from planetary warming caused mostly by polluting societies.
It's easy to overlook the progress that has occurred since, because we still have so far to go. Droughts, flooding and cyclones that already seem to be the norm are just the latest warnings of what is coming, and preventing much worse requires immediate and aggressive action to drastically reduce greenhouse-gas emissions.
In the corridors and sessions at the UN climate talks in Lima over the past two weeks, there has been extraordinary power and energy. We’ve seen material action as the financial sector starts to transform how it thinks about long-term risk. Coalitions are working together on tax reform, regulatory reform, and putting a price on carbon, and country after county is saying that they have been able to clean up their regulatory framework and put themselves in a position to grow.
The more the world urbanizes – and we’re forecast to be 70 percent urban-dwellers by 2050 – the more critical clean, efficient, safe transportation becomes. Access to better jobs, schools, and clinics gives the poor a ladder out of poverty and towards greater prosperity.
But transport as we know it today, with roads clogged with cars and trucks and fumes, is also a threat. We have inefficient supply chains, inefficient fuels, and a growing car culture, with all the congestion, lost productivity, and deadly crashes that brings. Urban air pollution exacerbated by vehicle traffic is blamed for an estimated 3 million deaths a year, according to the Global Burden of Disease report, and the black carbon it contains is contributing to climate change. The transport sector contributes 20 percent of all energy-related CO2 emissions, with emissions growing at about 1.7 percent a year since 2000, contributing to the growing threats posed by climate change.
To sum it up, much of today’s transport is unhealthy for people and planet.
Since the launch in 2008, the World Bank’s green bonds have grown quickly and reached an important milestone in August. Earlier, this month, the World Bank launched a US$550 million green bond bumping the total amount of World Bank green bonds issued to over $4 billion dollars since the green bond program began. This milestone prompted us to pause and take stock of the program and the new market it helped start.
As countries move toward a low-carbon, climate resilient future, the appetite for innovative climate finance is growing. One way to fill this financing need is through the capital markets. The World Bank’s green bonds, first launched in 2008, have been recognized as a catalyst for the growing market of climate bonds. This market is on its way to becoming an important source of funding for countries looking to grow in a clean and sustainable manner. A sampling of expected project results – over 165,000 tons of carbon dioxide equivalent emission reduction benefits per year in Belarus, and 800,000 tons per year in China, reducing vulnerability to climate-related flooding and water scarcity flood events for about 500,000 farmer households in Indonesia, and producing 6MWhs of electricity out of a landfill in Jordan – highlights the crucial role green bonds and other innovative funding mechanisms could play in financing the fight against climate change.
The World Bank started issuing green bonds in 2008, responding to a group of Scandinavian pension funds interested in supporting activities that address mitigation and adaptation to climate. Skandinaviska Enskilda Banken (SEB) was the lead manager of this inaugural green bond.