As countries meet in the Rwandan capital of Kigali this week, Christian Aid has warned that if they don’t agree on an ambitious date for ending the use of hydrofluorocarbons (HFCs), their climate pledges contained in the Paris Agreement will be broken.
Kigali in Rwanda is hosting the 28th Meeting of the Parties (MOP 28) to the Montreal Protocol on Substances that Deplete the Ozone Layer in October The meeting will adopt an amendment to the Montreal Protocol to phase down HFCs
HFCs, the manmade chemicals used in fridges and air conditioners, created to replace ozone-depleting chemicals in 1990, are thousands of times more potent than carbon dioxide as a greenhouse gas and their use is increasing at 10-15% a year.
Christian Aid’s Senior Policy Officer, Gaby Drinkwater, who is attending the talks in Kigali, said it was in everyone’s interests to phase out HFCs as soon as possible.
She said: “HFCs were created to replace other chemicals, some of which we discovered were putting a hole in the ozone layer. But we didn’t realise that in HFCs we had created something which could devastate the climate.
“HFCs are thousands of times more potent than carbon dioxide so it’s essential that we stop making them. The good news is we’ve already created their benign replacements, which are also more energy efficient. We now need to start using them, in conjunction with controlling the destruction of existing HFCs in a safe way.”
She added: “As people in developing countries seek more air conditioners and refrigerators, a heavy expansion of HFCs could deal a significant blow to the ambition of the Paris Agreement and set back any progress made on keeping global warming to 2 degrees.”
Negotiations in Kigali this week will focus on agreeing an amendment to the Montreal Protocol, including the date when HFCs must be phased-out. Some countries are pushing for a date closer to 2031 while others want a much more ambitious timeline in the early 2020s. Richer countries have already committed funds to help developing countries make the transition and leap-frog to the safer alternatives. Last month a number of philanthropists added another $53m to the pot to aid this process.
Ms Drinkwater said countries had nothing to fear from a rapid phasedown: “By leapfrogging polluting HFCs, developing countries can cut their energy use, reduce their climate impact, ensure they deliver on their Paris Agreement pledges and benefit from financial support towards equipment upgrades.”
“The combination of removing HFCs and the energy efficiency savings of new technology could see global temperatures reduced by a full degree centigrade by the end of the century.”
Setting the tone for the conference, Tina Birmpili, Executive Secretary of the Ozone Secretariat, stated that projected increases in demand for cooling mean that, by mid-century, more energy will be used on cooling than on heating. She underlined how this trend makes reaching an agreement on an HFC phasedown, combined with efforts to improve energy efficiency, as crucial to mitigating climate change.
The governments of Uganda and Germany have successfully concluded negotiations aimed at agreeing on the development cooperation programme for the next two years.
Most Ugandans get their water directly from swamps, streams, gravity flow schemes and springs and wells. Such water may contain worms, protozoa, bacteria and viruses that, if consumed, can cause hepatitis, typhoid, cholera and diarrhea. Uganda and Germany have agreed on the development cooperation programme
Both sides agreed on new programmes in the focus areas Energy, Water and Rural Development.
These sectors are amongst the priority areas for Uganda. Further initiatives to strengthen governance and civil society were concluded. All bilateral programmes are implemented by GIZ and KfW – the German Development Bank. All initiatives aim to support Uganda to achieve its national targets within the Agenda 2030. Germany committed additional funding to assist Uganda in addressing the current refugee crisis caused by the renewed outbreak of fighting in South Sudan in July this year.
An important outcome of these negotiations was the inclusion of cooperation programmes in the rural development area. Germany will invest a total of 46m EUR in Rural Development.
Emphasis of the programme should be on realizing the potential of Uganda’s agricultural sector.
The agricultural sector provides huge potential for promotion of employment and income generation as well as to increase food security in Uganda.
In the water sector, both governments agreed to refocus activities on water resources management and water for production, which should on one hand address the growing pressure on the water resources through increased use of water for production and on the other hand effects of climate change.
This support should mainly focus on marginalised areas in northern Uganda, which are under additional pressure due to the rising influx of refugees from South Sudan.
In the energy sector the focus of the German development cooperation will lie on implementation of ongoing investment projects during the coming two years. Current initiatives almost 20 projects with a total value of 300m EUR, concentrate on energy production, access to the energy networks and distribution including the transmission to regional electricity networks.
An example for these projects is the successful GetFit Program. The German cooperation will emphasise on the promotion of private investments in the energy sector.
During the negotiations a financial cooperation agreement on a total amount of 75m EUR in loans for two transmission lines was signed: one from Mbale to Bulambuli (40m EUR) and one from Mbarara to Masaka (35m EUR). These funds were made available in addition to the support committed during the last government negotiations in 2013.
This agreement was signed on 4th October 2016 by the Minister of State for Planning, Hon David Bahati, and the Ambassador of the Federal Republic of Germany, Dr Peter Blomeyer, at the Ministry of Finance, Planning and Economic Development.
Uganda records a steady growth of its economy by 5% yearly, which is mostly attributed to extensive infrastructure programs and improved policies on financial management.
However, about 20% of the Ugandan population still lives below the poverty line despite these improvements. The exponential population growth and challenges with the public finance management systems are amongst the biggest obstacles for development in Uganda. Additional projects in the area of Governance and Civil Society are meant to address these issues with greater focus in the coming years.
The government negotiations were concluded by the signing of joined summary records on 5th October 2016 by the Deputy Secretary to the Treasury, Mr. Patrick Ocailap, for the Ugandan side and by the Director for East Africa of the Federal Ministry of Development Cooperation, Dr Ralf Mathias Mohs, for the German side.
President of the World Bank, Jim Yong Kim, has said that there is no prospect of achieving the goals set out under the historic Paris Climate Change Agreement if current plans for coal-fired stations, especially those planned for Asia, are built.
World Bank Group President, Jim Yong Kim
He told a ministerial meeting on climate change in Washington DC on Monday that the central goal of the Paris Agreement is to keep the maximum global average temperature rise as close as possible to 1.5 degrees Celsius. Heat-trapping greenhouse gas emissions from coal are a primary cause of climate change which is leading to more extreme weather around the world, including storms, droughts and flooding, he adds.
Jim Kim called on ministers to accelerate the transition to low carbon as a matter of urgency.
He said: “Many countries want to move in the right direction. We can and should all help to find renewable energy and energy efficiency solutions that allow them to phase out of coal. Key to this is creating the right policy environment, building the business environment, implementing good practices like solar auctions, and de-risking investments in clean energy technology. Private sector interest in renewables is picking up but accelerating that interest will need a big increase in concessional finance that is:
Well targeted and “follows the carbon”;
Leveraged and blended to crowd in the private sector; and
Available quickly, at scale and easily deployed.
Jim Kim urged the ministers to generate and deploy the funding agreed in Paris last year that is required for the rapid transition to low carbon technology.
Other key areas or climate action outlined by the World Bank President are:
Including climate ambition development plans of every country. Over the next 15 years, planned infrastructure around the world will amount to over $90 trillion, more than what has been invested to date. And most of this will be in developing countries. It is crucial to ensure these investments are low-carbon and climate-resilient.
Phasing down HFCs which could prevent close to a half degree of global warming by the end of the century. HFCs are used in energy-sapping appliances like air-conditioners, and there is the opportunity with new technologies to double the climate benefits from energy efficiency at the same time.
Increasing adaptation and resilience. Without good, climate-informed development, climate change could force more than 100 million people into extreme poverty by 2030.
Patricia Espinosa, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), addresses audience at the Chatham House Climate Change Conference in London on Monday 10 October, 2016
Patricia Espinosa, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), addresses audience at Chatham House in London. She thanked them for their contributions to the Paris Agreement
Let me first thank Rob Bailey for the warm welcome and the Royal Institute of International Affairs for the invitation to speak at the first Chatham House Climate Change Conference since governments of the world adopted the Paris Climate Change Agreement.
I also want to take this opportunity to thank those in the room today for your contribution to the Paris Agreement. I know that many of you worked hard over many years on the achievements of Paris.
Every government in the world deserves recognition for their contribution to the agreement, and for their willingness to work together to shape our collective future. We must also recognise the cities, regions, businesses, investors and every individual who supported governments in the final push for an ambitious agreement.
People took to the streets. Cities joined cooperative initiatives such as the Covenant of Mayors and C40, while regions joined the R20, and the Under 2 MOU brought these subnational governments together. Businesses and investors under the umbrella of the B Team, RE100, the CERES initiatives and many others all showed support for bold outcomes in Paris.
The outcomes of COP 21 could not have been achieved without France’s visionary leadership and without the secretariat’s dedicated support. Christiana and Laurence, the world will be a better place thanks to you and your teams.
We now have more than 75 countries that have deposited their instruments of ratification covering close to 60 per cent of global emissions and the Paris Agreement will now enter into force three days before COP 22 in Marrakech. Together with the Sustainable Development Goals (SDGs), we now have a global framework for action. We have both momentum and a mandate.
Today we gather answer the question, ‘Has the game changed?’
Clearly, it has. The speed at which countries have made the entry into force possible is unprecedented in recent international agreements. And it is a powerful confirmation of the importance nations attach to combating climate change and realising the full potential of the Paris Agreement. Today, we have a clear path forward to fulfil the vision of a low-emission, climate-resilient future; a climate-neutral world in the second half of the century.
Last week’s decisions on a global market-based measure to offset international aviation emissions at the International Civil Aviation Organisation Assembly have been welcomed by governments, business and environmental groups. We are all hopeful that in Kigali this week another milestone can be reached.
These are clear examples that we are collectively committed and moving towards the sustainable future we need.
Ladies and gentlemen, we stand at a moment unlike any other in our collective history and the next few years will determine whether or not we have made the most of this opportunity.
Over the last six years we have been able to build an institutional framework to support action by Parties: The Green Climate Fund, the Climate Technology Centre and Network and the Loss and Damage Mechanism are some of the tools available to the developing world.
In parallel to the decisions by Parties, non-state actors have woken to the need to address climate change and seized the opportunities it provides. In the lead up to the Secretary-General’s Climate Summit in 2014 and the Paris Conference in 2015, we witnessed business, regional governments, local authorities, institutional investors, faith communities and many more make ambitious commitments and take action. This momentum has continued to grow in 2016 and every day we hear of new announcements and actions by a multitude of actors in all regions of the world.
Friends, COP 22 this year in Marrakech will not just be a celebration of the entry into force of the Paris Agreement in record time where the first meeting of the CMA will be held. It will also be the first COP that places implementation and action squarely at the centre of attention, it will provide governments an opportunity to present a roadmap to mobilise the $100 billion in annual support by 2020, to increase clarity for adaptation finance and for a mechanism to strengthen capacity building.
We will see initiatives that support the implementation of Nationally Determined Contributions (NDCs) and help integrate them into each country’s development agenda alongside the SDGs also adopted in 2015.
Marrakech is our opportunity to strengthen the partnerships that accelerate the transition towards a low-emissions future and promote sustainable development committed to by governments.
Finance and national policies are central elements to allow delivering on these commitments.
Finance flows should all align with the long-term goal in the Paris Agreement. Friends, we know that we must mobilise more than the $100 billion committed to and included in the Paris Agreement, we need trillions to truly meet the climate challenge.
Yes, climate finance must flow and at a faster pace that it currently does. But we must also look at energy subsidies, how markets price carbon, the value of green investments and potential gains from incentivizing nature-based solutions.
Central banks, development banks, funds and institutional investors need to be involved. Climate considerations must be mainstreamed into our global financial architecture. This was my message two days ago at the World Bank’s Climate Ministerial meeting on delivering the Paris Agreement.
At the same time, public policies have to incorporate climate change goals and create an enabling environment for a global transformation of economic and social development. It is not only about environmental policy. Energy policy, economic policy, trade policy, transportation policy and land use and resource management policy should all work in a concerted, coherent manner to enable every country to accomplish their Paris Agreement and SDG contribution. Strong leadership at the national level is indispensable.
The private sector has a fundamental role to play in this transformation; I am certain that Laurence will address this issue in her speech and I look forward to hearing her remarks.
I am equally looking forward to hearing how this conference can further engage and encourage the private sector to innovate and accelerate the transition to low-emission, sustainable development.
The SDGs and the Paris Agreement envision a model of growth and development that is good for people and good for the planet. This is an opportunity to improve the wellbeing of billions. It is the opportunity to avoid instability and safeguard the development gains achieved to date. It is an opportunity to end extreme poverty, ensure adequate food and water, protect public health, increase equity and empower through education.
It will require steadfast dedication and I am confident that all of you here today are willing to take the next step. We have the mandate. We have the momentum. Now is our moment. Let’s work together to seize this great opportunity and turn our collective vision into our collective reality.
Off the coast of Hawaii, a tall buoy bobs and sways in the water, using the rise and fall of the waves to generate electricity.
Generating energy from waves
The current travels through an undersea cable for a mile to a military base, where it feeds into Oahu’s power grid – the first wave-produced electricity to go online in the U.S.
By some estimates, the ocean’s endless motion packs enough power to meet a quarter of America’s energy needs and dramatically reduce the nation’s reliance on oil, gas and coal. But wave energy technology lags well behind wind and solar power, with important technical hurdles still to be overcome.
To that end, the Navy has established a test site in Hawaii, with hopes the technology can someday be used to produce clean, renewable power for offshore fueling stations for the fleet and provide electricity to coastal communities in fuel-starved places around the world.
“More power from more places translates to a more agile, more flexible, more capable force,” Joseph Bryan, deputy assistant secretary of the Navy, said during an event at the site. “So we’re always looking for new ways to power the mission.”
Hawaii would seem a natural site for such technology. As any surfer can tell you, it is blessed with powerful waves. The island state also has the nation’s highest electricity costs – largely because of its heavy reliance on oil delivered by sea – and has a legislative mandate to get 100 percent of its energy from renewables by 2045.
Still, it could be five to 10 years before wave energy technology can provide an affordable alternative to fossil fuels, experts say.
For one thing, developers are still working to come up with the best design. Some buoys capture the up-and-down motion of the waves, while others exploit the side-to-side movement. Industry experts say a machine that uses all the ocean’s movements is most likely to succeed.
Also, the machinery has to be able to withstand powerful storms, the constant pounding of the seas and the corrosive effects of saltwater.
“You’ve got to design something that can stay in the water for a long time but be able to survive,” said Patrick Cross, specialist at the Hawaii Natural Energy Institute at the University of Hawaii at Manoa, which helps run the test site.
The U.S. has set a goal of reducing carbon emissions by one-third from 2005 levels by 2030, and many states are seeking to develop more renewable energy in the coming decades.
Jose Zayas, a director of the Wind and Water Power Technologies Office at the U.S. Energy Department, which helps fund the Hawaii site, said the United States could get 20 to 28 percent of its energy needs from waves without encroaching on sensitive waters such as marine preserves.
“When you think about all of the states that have water along their coasts … there’s quite a bit of wave energy potential,” he said.
Wave energy technology is at about the same stage as the solar and wind industries were in the 1980s. Both received substantial government investment and tax credits that helped them become energy sources cheap enough to compete with fossil fuels.
But while the U.S. government and military have put about $334 million into marine energy research over the past decade, Britain and the rest of Europe have invested more than $1 billion, according to the Marine Energy Council, a trade group.
“We’re about, I’d say, a decade behind the Europeans,” said Alexandra De Visser, the Navy’s Hawaii test site project manager.
The European Marine Energy Centre in Scotland, for example, has 14 grid-connected berths that have housed dozens of wave and tidal energy devices from around the world over the past 13 years, and Wave Hub in England has several such berths. China, too, has been building and testing dozens of units at sea.
Though small in scale, the test project near Kaneohe Bay represents the vanguard of U.S. wave energy development. It consists of two buoys anchored a half-mile to a mile offshore.
One of them, the Azura, which extends 12 feet above the surface and 50 feet below, converts the waves’ vertical and horizontal movements into up to 18 kilowatts of electricity, enough for about a dozen homes. The company working with the Navy, Northwest Energy Innovations of Portland, Oregon, plans a version that can generate at least 500 kilowatts, or enough to power hundreds of homes.
Home buyers across the European Union (EU) could be offered better borrowing rates on mortgages in return for purchasing more energy efficient homes or committing to implement energy saving work within properties, under a ground-breaking project being pioneered by a unique partnership of banks, property valuers, energy efficiency businesses and utility providers.
Luca Bertalot, EMF-ECBC Secretary General
The European Energy Efficiency Mortgage initiative, launched a week ago by a consortium led by the European Mortgage Federation – European Covered Bond Council (EMF-ECBC), aims to create a standardised “energy efficient mortgage” based on preferential interest rates for energy efficient homes and/or additional funds for retrofitting homes at the time of purchase.
Creating a private bank financing mechanism to encourage the energy efficient improvement of households is a key means of helping the EU to meet its energy saving target of 20% by 2020, and to deliver on the ambition of the historic climate change deal, known as the Paris Agreement, which was reached at COP21 last December.
It is also said to be particularly timely given the growing global institutional and investor interest in climate finance and private sector investment required to fund low carbon initiatives, which will be the main focus of COP22, the next major climate change conference which takes place in Marrakech, Morocco in November.
The European Energy Efficiency Mortgage initiative is significant in that it will explore the link between energy efficiency and borrower’s reduced probability of default and the increase in value of energy efficient properties. For banks and investors, this could lead to loans which represent a lower risk on the balance sheet and could therefore qualify for a better capital treatment. It could also ensure that banks are able to recognise “energy efficient” assets in their risk profiling, which would begin to help the market to price-in the added value of energy efficient real estate.
The initiative was launched at the World Green Building Council’s BUILD UPON Leaders’ Summit in Madrid, where 200 renovation leaders gathered to discuss how to tackle energy efficiency in Europe’s existing buildings.
Luca Bertalot, EMF-ECBC Secretary General, said: “We have the responsibility to design a sustainable environment for future generations by developing a pan-European mortgage financing mechanism, according to which energy efficiency investments are made more accessible and affordable for consumers and institutional investors, and the subsequent energy efficiency improvements reduce risk for banks, creating a win-win for all involved.”
James Drinkwater, Europe Regional Director, World Green Building Council, said: “The Paris Agreement has set a course to keeping global warming to within 2 degrees, but we will need to develop innovative ways of financing energy efficiency in Europe’s homes if we are to stand any chance of meeting that goal. Mortgages which reward consumers and investors by recognising energy efficiency represent one such way, and will undoubtedly play a key role in helping to achieve our ambitious climate change targets.”
Emmanuel Normant, Vice-President for Sustainable Development at Saint-Gobain, which is on the project’s Energy Efficiency Committee and is a Partner of the European Regional Network of Green Building Councils, said: “As we need to speed up progress to meet our climate ambition, Saint-Gobain welcomes this timely initiative which has the potential to accelerate the uptake of renovation in Europe. Forging a common understanding of the value of energy efficiency between all players and private banks is an essential step to unlock investment in energy efficiency.”
Shell has appointed a new Vice President for Nigeria and Gabon. He is Peter Costello. He succeeds Markus Droll, who assumes a new role of Executive Vice President, Projects in Shell International in Rijswijk, The Netherlands.
Outgoing Vice President, Shell Nigeria and Gabon, Mr. Markus Droll (left), welcoming his successor, Mr. Peter Costello, in Lagos last Friday
Peter, an engineer by background, has spent over three decades in the oil and gas industry, starting his career in British Gas and working in the UK, India, The Philippines, Thailand and Kazakhstan. He transferred to Shell following the combination with BG in June 2016.
Peter, who has assumed duty in Lagos, said: “I come to Nigeria with high hopes of what we can do to build on the excellent work that I’ve met on the ground. Shell Companies in Nigeria are major contributors to the economy, not only through the energy they produce and the revenues they generate for the country, but also via their supply chains, local content and social investment. Given the exceptional talent here and the huge resource base of the country, I’m confident we can address the challenges in our operating environment, and continue to deliver real value to all stakeholders. My sentiments for Gabon are similar as we work to reposition our business and take advantage of new opportunities.”
Markus, who also an engineer by background, joined Shell in 1985 and has held a variety of roles in Projects and Front-End Engineering in The Netherlands, Oman and Brunei. He first came to Nigeria in 2006, where he led the Corporate and Commercial Directorate, and then in 2007, became Vice President Technical Africa. From 2009 to 2012 he was Vice President Technical Asia, Upstream International. He was appointed Vice President Nigeria and Gabon in January 2013.
Markus said: “The last four years have been exciting as they have been challenging in what can easily pass as my most satisfying job in my career so far. Nigeria and Gabon continue to be fertile ground in our portfolio, and it has been a privilege working with staff and other stakeholders to deliver the kind of value that we can all be proud of both in the onshore and offshore oil and gas production. I leave with fond memories of the energy and resourcefulness of the staff in Nigeria and Gabon and the genuine friendliness of the people, which goes even for the climate.”
Osagie Okunbor, Chairman of Shell Companies in Nigeria and Managing Director of The Shell Petroleum Development Company of Nigeria Ltd (SPDC), commented: “We are sad to see Markus go. He has been a partner and friend of Nigeria using the experience from his first Nigeria posting. We also welcome Peter to Nigeria. His vast networks and experience will be very helpful in further consolidating and improving the Shell presence in Nigeria.”
The National Emergency Management Agency (NEMA) has opened new operation offices in Adamawa, Edo and Kano states in its effort to bring disaster management closer to communities, and thereby reducing response time to disasters.
Director General (DG) of the National Emergency Management Agency (NEMA), Muhammad Sani Sidi
A statement issued by the Head of Media and Public Relations, Sani Datti, quoted the Director General, Muhammad Sani Sidi, as saying during the weekend that “NEMA is making conscious efforts to build stakeholders’ capacity and devise an appropriate mechanism to address the various facets of disaster risk reduction, namely- prevention, mitigation, preparedness, response and recovery.”
To achieve the feat, the DG observed that there was the need for cooperation and collaboration of all stakeholders at the federal, state, local government and community levels.
He further stated that requests for NEMA’s intervention, even for minor incidents, across the country is a sign of the level of confidence reposed by members of the public on the agency.
Sidi commended the efforts of Adamawa and Kano state governments for donating office spaces and warehouses to facilitate the opening of the operation offices in the states.
The operation offices will be responsible for taking disaster risk reduction to grassroots, capacity building programmes for stakeholders and coordinating government agencies and non-governmental organisations involved in the disaster management in the states.
With the creation of the Adamawa, Kano and Edo operation offices, the agency now has a total of nine operation offices and six zonal offices across the country.
Agustín Carstens, Governor of the Bank of Mexico, and Patricia Espinosa, Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC), in this treatise, explore the financial implications of the coming into force of the Paris Agreement, as finance ministers and central bankers converge on Washington, DC for the IMF and World Bank Group Annual Meetings
Agustín Carstens, Governor of the Bank of Mexico. The IMF and World Bank meet in the US this week. Photo credit: Lionel Bonaventure/AFP/Getty Images
At the recent United Nations General Assembly in New York, Secretary-General Ban Ki-moon predicted the Paris Climate Change Agreement would enter into force before 2017, announcing 60 countries had now ratified its terms. This week (October 7-9), the International Monetary Fund and World Bank welcome an influx of finance ministers and central bankers, to its annual meetings in Washington, DC.
At first glance, these two events might appear totally unrelated. The imminent ratification of the Paris Agreement – a global deal to keep global temperature rise below 2°C – is a huge achievement and a real triumph for multilateralism. It also focuses the mind on the next step: how the Agreement will be implemented across the world?
Here, we get our first inkling as to why the finance ministers, central bankers and regulators meeting in Washington DC are so relevant to our story. Right now, progress is being made towards mobilising $100 billion in annual financing flows from rich countries to developing economies by 2020. Practical implementation is also taking place on the ground. Funding from the Green Climate Fund (GCF) is helping to build resilience into coastal and urban infrastructure projects in Bangladesh, while in Tanzania over 100,000 homes now have electricity through Off-Grid Electric, a clean energy company backed by debt financing from the Million Solar Homes Fund.
Yet overall, the cost of making the transition to a low-carbon future is measured in trillions. This quickly takes us far beyond the realm of public funds since no government – no matter how rich – can finance climate action through taxation and borrowing alone. One estimate suggests that around $90 trillion will need to be invested by 2030 in infrastructure, agriculture and energy systems, to accomplish the Paris Agreement.
This won’t happen without private capital and underlines why aligning the world’s financial system with the needs of climate action and sustainable development is every bit as important as emission reduction pathways and removing fossil fuel subsidies. Moreover, set against the $300 trillion of assets – held by banks, the capital markets and institutional investors – we’re faced with a problem of allocation rather than outright scarcity.
In fact, finance ministers and central bank governors are already deeply engaged. Those from G20 nations recently agreed a set of options to improve the ability of the global financial system to deliver green investment. One promising area is the rise of the green bond market where companies and municipalities can raise capital that is ring-fenced for priorities such as renewable energy, building efficiency and water management.
So far this year, the combined value of green bonds has grown to over $45 billion, a fourfold increase from 2013. By way of example, Mexico’s development bank, Nacional Financiera S.N.C (Nafin), issued its first $500 million green bond in November last year to finance wind energy in Oaxaca, Nuevo Leon and Baja California.
However, the world’s capital markets still do not fully incorporate climate factors when pricing assets and evaluating risk. In response, the Financial Stability Board setup a task force on climate disclosure headed by former New York mayor, Michael Bloomberg. Only with better and consistent reporting will banks, pension funds – and individual investors – be able to understand how the transition to a low-carbon economy will impact investments.
In all, the total number of policy and regulatory measures to build a more sustainable financial system has more than doubled in the past five years. This is a key finding of a new report published by UN Environment Programme (UNEP) (www.unepinquiry.org). It cites that measures taken by finance ministries, central banks and regulators to promote sustainable finance have risen to 217 and now exist in nearly 60 countries. These range from actions to steer finance towards clean energy through assessments of climate risk for insurance companies and on to roadmaps that set out how to green an entire financial system as China has just done.
These are all promising signs of positive momentum but the world’s financial architecture is still ill-equipped to deliver the necessary transformation. The national climate plans (INDCs) submitted by governments represent a real improvement on business-as-usual but do not yet provide the signals needed to steer capital towards global climate action. So while it is true investors are starting to measure the carbon footprint of portfolios and increase exposure to green assets, only a tiny minority has introduced comprehensive climate strategies.
The financial system clearly needs to evolve further to price environmental risks, overcome short-termism and deliver greater transparency on climate performance. Making this happen, and happen with a sense of urgency, will require different players to put in place mutually reinforcing financial policies and regulations that support the Paris Agreement. If we can get it right, private capital will respond and the trillions needed for transformation across countries will flow.
Government, industry and civil society representatives on Thursday in Montréal, Canada agreed on a new global market-based measure (GMBM) to control CO2 emissions from international aviation.
ICAO Council President, Dr. Olumuyiwa Benard Aliu. An historic agreement has been reached to mitigate international aviation emissions
The historic move came as the Plenary Session of the UN aviation agency’s 39th Assembly agreed to recommend adoption of a final Resolution text for the GMBM.
“It has taken a great deal of effort and understanding to reach this stage, and I want to applaud the spirit of consensus and compromise demonstrated by our Member States, industry and civil society,” remarked ICAO Council President, Dr. Olumuyiwa Benard Aliu. “We now have practical agreement and consensus on this issue backed by a large number of States who will voluntarily participate in the GMBM – and from its outset. This will permit the CORSIA to serve as a positive and sustainable contributor to global greenhouse gas emissions reduction.”
ICAO’s Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is designed to complement the basket of mitigation measures the air transport community is already pursuing to reduce CO2emissions from international aviation. These include technical and operational improvements and advances in the production and use of sustainable alternative fuels for aviation.
Implementation of the CORSIA will begin with a pilot phase from 2021 through 2023, followed by a first phase, from 2024 through 2026. Participation in both of these early stages will be voluntary and the next phase from 2027 to 2035 would see all States on board. Some exemptions were accepted for Least Developed Countries (LDCs), Small Island Developing States (SIDS), Landlocked Developing Countries (LLDCs) and States with very low levels of international aviation activity.
“I would like to thank all those who have been part of this process,” said Dr. Fang Liu, Secretary General of ICAO. “This Resolution is the reflection of the spirit of cooperation and tremendous efforts. The ICAO GMBM endorsed today is an important addition to the basket of measures aviation is pursuing to address CO2 emissions.”
