The new technology industrial revolution will provide a major boost to speed up climate action but only if business commits to it and governments back it with stable policy and new incentives, delegates at the COP23 Innovation Day said on Tuesday, November 14, 2017.

In an example that embodies all these essential components of successful innovation, the World Business Council for Sustainable Development (WBCSD) on Tuesday launched the below50 initiative hubs in North America, South America and Australia to create much bigger demand and markets for sustainable fuels.

Getting ideas into action is a major theme of the Global Climate Action Day where representatives from business, government and civil society are delving into technological and policy innovation and new ways of collaborating to get the world on track to achieve the goals of the 2015 Paris Climate Change Agreement.

“Faced with the growing problem of climate change, the instinct of companies is not to be passive but to take action and find solutions. Global climate policy must provide the framework necessary to encourage the private sector to increase investment and spur innovation to meet the objectives of the Paris Agreement,” said John Danilovich, Secretary General of the International Chamber of Commerce.

The central goal of the Paris Agreement is to keep the average global temperature rise well below 2 degrees Celsius and as close as possible to 1.5 degrees. About one degree of that rise has already happened, underlining the urgency to progress much further and faster with the global clean energy transformation.

Meeting the Paris goal is also inextricably linked to the success of the 2030 Agenda’s 17 Sustainable Development Goals, in this case particularly Goal 9 – to build resilient infrastructure, promote sustainable industrialisation and foster innovation.

Launching below50

The below50 initiative is a global collaboration that brings together the entire value-chain for sustainable fuels – that is, fuels that produce at least 50% less CO2 emissions than conventional fossil fuels. The goal is to create the demand and market for these fuels to scale up deployment.

The below50 hubs allow companies to engage with the below50 global campaign at the local level. Each hub works on solutions tailored for their regions – including local policy, awareness raising and financing. Every hub is led by a below50 partner and welcomes companies with an interest in the regional low-carbon fuel market.

Transport accounts for nearly 18% of all emissions worldwide, and over 90% of the sector is still dependent on carbon intensive fossil-fuels. To date, only 3% of transport fuels are low-carbon. According to the International Energy Agency, if we are to satisfy economic growth and limit global warming to below 2°C, 10% of all transport fuels must be low carbon by 2030 and 30% by 2050.

“We are standing at the cusp of a new industrial revolution. Forward-looking businesses are exceeding their climate targets by using innovation to help them reduce their carbon footprint. This is happening now as carbon smart technologies are disrupting the fuels and chemicals supply chain, and initiatives like below50 are turning this approach into a global movement,” said Freya Burton, Chief Sustainability and People Officer at LanzaTech.

This kind of innovation, partnership and united drive towards low-carbon must be replicated across the globe.

“We need innovation across policies, technologies and methods of collaboration,” said Rasmus Valanko, Director of Climate and Energy at WBCSD. “We’re not going to solve the climate challenge with existing technology only. We need to invest in the technologies and the partnerships we’ll need when decarbonisation gets even harder.”

Below50 not only represents innovative technology, but also innovative ways of partnering with governments to create enabling policies that will to bring low-carbon solutions to local markets.

Moving towards low-carbon requires identifying clearly which policies work and where they can be replicated in other parts of the globe. For example, through below50, WBCSD is working with the Brazilian government to adopt low-carbon fuel policies from California.

The idea is to create systems that reward and encourage sustainable investment.

“The Paris Agreement has delivered a shared ambition on climate change, and based on that, there needs to be clear national and local action plans which includes innovation. That’s where the actual emissions reductions happen,” Mr. Valanko said.

The devastating impacts of this year’s hurricane season have brought home the need to invest urgently in societies that can resist climate change, a fact which Norway and Unilever have taken to heart at COP23 with a commitment on Tuesday, November 14, 2017 of $400 million to stimulate resilient social development.

At the Global Climate Action Resilience Day during the UN Climate Change Conference in Bonn (COP23), leaders from across government, business and civil society stressed that cutting greenhouse gas emissions to prevent worse climate change and adapting successfully to existing climate change were not separate objectives but a single goal.

At the roundtable on unblocking investment into resilience, Vidar Helgesen, the Minister of Climate and Environment of Norway, gave a clear example of action.

He said: “I am pleased to announce that Norway with Unilever and other partners is setting up a new $400 million fund to invest in business models that combine investments in high productivity agriculture, smallholder inclusion and forest protection. This should be only one of many new public and private investments in more resilient socioeconomic development.”

Taking action now to build social and economic resilience against climate change is essential to successfully meet the objectives of three inextricably linked international agreements – the Paris Climate Change Agreement, the 2030 Agenda for Sustainable Development and the Sendai Framework for Disaster Risk Reduction.

“Achieving economic development and the eradication of poverty can’t be achieved if we don’t build climate resilience. This is why the World Bank is putting resilience, and the management of climate risks, at the heart of its investments,” said Laura Tuck, Vice President Sustainable Development, at the World Bank.

Coordinated Public-Private Response

Building resilience requires investment by the public and private sector. This makes economic and environmental sense.

Roelfien Kuijpers, Head of Responsible Investments and Global Head of Strategic Relationships of Deuche Asset Management, said:“For many years, investors haven’t been able to fully assess climate change risks. Big data initiatives, such as the work of Four Twenty Seven, is allowing investors to do this and reduce the climate risks to their portfolios. This is an important step but more is needed to limit climate change risks, increase environmentally responsible investing, and to improve the disclosure of climate risks by companies.”

Dr Simon Young of Willis Towers Watson and the Insurance Development Forum highlighted the importance of public and private partnerships to assess and reduce risks saying: “To build climate resilience we must first understand the risks and how to assess them. The insurance sector working through public/private partnerships can do this, so that communities and businesses can not only anticipate risks but absorb, cope and rebound from them.”

Global and Local Response

Mary Robinson, President of Mary Robinson Foundation – Climate Justice, said: “To build resilience effectively we must address the root causes of poverty, inequality and exclusion and put people at the centre of decision making.”

Elhadj As Sy, the Secretary General of the International Federation of Red Cross and Red Crescent Societies, emphasised that, to reach vulnerable people, efforts must not remain focused at the international and national level.

He said: “Our volunteers demonstrated the positive impact local action can have when they responded to the recent hurricanes in the Caribbean, heat waves in Europe, and floods in Bangladesh. We must empower local actors so they know what’s coming their way and have the resources to act.”

Nature, Science and Resilience

To build resilience most effectively means understanding the science, and working with nature.

Johan Rockström, the Executive Director of the Stockholm Resilience Centre, said: “Investing in resilience has two climate benefits. First it enables communities to navigate rising climate shocks and stresses. Second, it reduces climate risks by safeguarding carbon sinks and unleashing novel thinking on transformations to diversified fossil-fuel free societies.”

Inger Andersen, Director General of International Union for Conservation of Nature, said: “Climate change is putting millions of lives at risk and causing enormous economic losses. Well-functioning ecosystems are critical to reducing these risks while boosting the resilience of those that are most vulnerable. For example maintaining mangrove forests are a cost-effective nature based solution.”

Fiji’s Global Climate Champion, Minister Inia Seruiratu, underlined the importance of resilience and action by a wide range of stakeholders, saying: “Everyone needs to come together in unprecedented ways to tackle the challenges ahead of us. For all of us, but especially in vulnerable areas such as the Pacific, working together to build resilience is more urgent than ever before.”

Rene Castro, Assistant Director General of FAO, speaking on behalf of the UN Climate Resilience Initiative (A2R) echoed Minister Seruiratu’s comments saying: “The UN Climate Resilience Initiative is an excellent example of how public and private partners are coming together to help countries and communities anticipate and absorb climate risks, and to reshape development for sustainability”

Rommel Lo from the Dumaguete Effata Association of the Deaf (DEAF) in the Phillipines underlined the importance of putting communities at the heart of decision making saying: “Over a tenth of the world’s population live with some form of disability, and are among the most vulnerable to disasters. For the deaf community, it is my hope that even if we cannot hear, we can still be heard. We must be involved in making the decisions that will affect us.”

The events at COP23 have been organised by the by the following partners of UN Climate Resilience Initiative (A2R): the Global Resilience Partnership, the Food and Agriculture Organisation of the UN, the Insurance Development Forum, the International Federation of Red Cross and Red Crescent, the International Union for Conservation of Nature, UN Environment, and the World Bank.

To be climate resilience means people and their economies need to have three things: to be able to understand and anticipate climate risks and hazards (both extreme events such as hurricanes and long term changes such as hotter temperatures and sea level rise); to be able to absorb and cope with the impact of shocks and stresses when they occur; and, in the long term a transformation of development and what they do to reduce these risks.

Raising ambition to act on climate change and raising the large amount of finance needed to do it are so completely inter-connected that governments and the entire financial sector must see it as a single challenge.

High-level representatives from across the sector on Monday, November 13, 2017 at the COP23 Finance for Climate Day highlighted their efforts to meet the goals of the Paris Climate Change Agreement and underlined that this challenge of coordination and coherence needed to be quickly addressed.

They set out what needs to be done next by governments, cities, states, business and multilateral institutions to secure the pace and scale of investment required, before and after 2020, to meet the Paris goal of keeping the average global temperature rise well below 2 degrees Celsius and as close as possible to 1.5 Celsius.

Eric Usher, Head of UNEP Finance Initiative, said: “At the heart of the climate challenge are two gaps we urgently need to bridge: the ambition and the investment gap.”

“It is up to national governments now to increase the ambition of their NDCs to close the 17 GtCO2e emissions gap that we still face for 2030. When it comes to the investment gap, however, we need all financial players – public, private, domestic, international – and including markets and regulators, to work together effectively to mobilise at least $1.5 trillion of climate finance that is needed every year. Let this Finance Day be the start of a new and determined chapter of climate finance innovation, collaboration, and impact,” he said.

What is more, every dollar invested in cutting greenhouse gas emissions and adapting to climate change gets double the bang for the buck because the results directly support the only sustainable future possible, which is captured in the international community’s 2030 Agenda for Sustainable Development.

Finance for climate is flowing at a greater pace than ever, with vibrant and growing markets for renewable energy, electric vehicles, green buildings and climate-smart agriculture seeing aggressive growth, backed by exponential advances in innovative green financial instruments, indices and markets.

Equally, the finance sector is recognising to a much greater degree where and how climate change presents risks to its existing investments and the need to adjust their portfolios away from carbon-intensive assets to reduce that risk.

However, amid discussions at COP23 on Monday, much more is said to be needed to secure finance and investment at the scale required to deliver a fully de-carbonised and climate-resilient global economy by 2050.

Laura Tuck, Vice President Sustainable Development, World Bank, said: “The potential for climate friendly investment in areas such as clean energy and climate-smart agriculture is enormous.

“The key is to get the funding to flow so that everyone everywhere can benefit from low-carbon and climate resilient investments. That’s why we are working with the UN and our other development partners to create the conditions that will attract investors and to get all forms of finance – public, private, philanthropic – working together for maximum impact,” she said.

Vladis Dombrovskis, Vice-President of the European Commission, said: “Hundreds of billions of euros in investment are needed to transition to a low carbon economy and meet the target of well below 2 degrees warming. This is a challenge but also an opportunity for the EU to become a magnet for green investment and lead the way in mobilising both public and private financing for sustainable projects. That is why we are preparing for early next year an Action Plan on sustainable and green finance.”

Brahim Hafidi, President of Souss-Massa Region and First Vice-President of the National Association of Moroccan Regions, said: “Today ‘Localising is the new Globalising’, and Cities and Regions around the world have demonstrated their leadership in climate action for inclusive, resilient, sustainable and low carbon infrastructure development plans.”

“The Global Mapping of Initiatives for Localising Climate Finance, launched today by the Cities Climate Finance Leadership Alliance, shows acceleration in providing funding, financing and technical assistance support to local and regional governments from the whole range of stakeholders. This major publication is a unique reference-compass to help match demand and supply. The integration of local and subnational projects in NDC investment plans, especially for adaptation and resilience funding and financing, is a key priority,” he said.

Peter Damgaard Jensen, CEO of Danish Pension provider PKA and Chair of the Institutional Investors Group on Climate Change (IIGCC), said: “Strong investment signals from policy makers across carbon trading, energy, transport and buildings are essential to unlock the necessary capital. Climate-related disclosure consistent with the recommendations of the FSB’s Task force will also be paramount, to provide greater legal certainty alongside efforts to ensure an international level playing field.”

“That is why my organisation is launching a new programme focused specifically on investor practices in this area, with a focus on ensuring ongoing dialogue between IIGCC’s growing membership of asset owners and managers about latest developments of climate disclosure in line with TCFD recommendations. Effective pricing of climate related risk by financial markets is essential to help realise the goals of the Paris Agreement,” he said.

The High Level Finance for Climate Day at COP23 focused on:

• Investment to reallocate capital flows towards low-carbon and resilient growth, with additional upfront capital or risk sharing, to deliver financial returns and resource savings;
• Inclusion to ensure that flows reach the countries and communities with greatest needs in terms of both sustainable growth and reducing vulnerability, effectively doubling flows to developing countries by 2020;
• Integration to make the long-term consequences of climate change and wider sustainability factors a routine part of financial decision-making and accountability both in terms of opportunity and risk, to avoid financial system instability;
• Innovation to enable green deal flow, particularly risk sharing for emerging economies and frontier markets, for domestic markets to grow;
• Infrastructure that provides climate resilience tapping the financial system’s endless capacity for innovation and speed of action;
• Transparency on finance and investment through simple and harmonised approaches, norms and standards that in turn support climate investment plans and polices tailored to national needs, priorities and capacities, that attract diverse capital sources and greater private sector risk.