Tag: Finance

Cancun Building Blocks - Oct 2010

THE POST-COPENHAGEN ROAD

A fair, ambitious and binding deal is needed more urgently than ever. Climate science is more compelling by the day. Impacts are coming harder and faster. Disastrous flooding in Pakistan, heat waves and forest fires in Russia and hottest recorded temperatures around the globe, amongst other devastating climate-related events, all point to the need for urgent action. Levels of warming once thought to be safe, may well not be, 1.5˚C is the new 2˚C

Negotiations Post-Copenhagen
Copenhagen was a watershed moment for public interest and support for climate action – and people have not lost interest. More people in more countries than ever have put their governments on notice that they expect a fair,
ambitious and binding global deal to be agreed urgently. Trust-building is essential after the disappointment of Copenhagen. Developed country leadership must be at the core of trust building efforts. Countries must show
their commitment to the UNFCCC process by driving it forward with political will and flexible positions, rather than endless rounds of repetitive negotiations. Many countries are troublingly pessimistic for Cancun, and are working to lower expectations. While others, including countries most vulnerable to climate change, maintain high expectations.

Challenges ahead of Cancun
There are many challenges to getting a full fair, ambitious and binding deal at Cancun, including:

  • Lack of a shared vision for the ultimate objective of the agreement, and the equitable allocation of the remaining carbon budget and emissions reduction/limitation commitments;
  • Sharp divisions on the legal form of an eventual outcome;
  • Failure of the US Senate to pass comprehensive legislation this year; and
  • Current economic difficulties facing many countries, which make it difficult to mobilize the substantial commitments to long-term climate finance needed as part of any ambitious agreement. 

Positive moves afoot
However, more and more countries, both developing and developed, are stepping up their efforts to pursue low-carbon development and adaptation, despite the absence of an international agreement. This can be seen in a variety of ways:

  • Investments in renewable energies have continued their exponential growth, increasing to 19% of global energy consumed;
  • Progressive countries are working to move the negotiations forward;
  • There is a growing perception that low-carbon and climate-resilient development is the only option to sustainably ensure the right to development and progress in poverty reduction. 

So, what does a pathway forward look like?

Firstly we must learn the lessons of Copenhagen. The “nothing’s agreed until everything’s agreed” dynamic from Copenhagen could mean that nothing would be agreed in Cancun. An agreement in Cancun should instead be a balanced and significant step toward reaching a full fair, ambitious & binding deal at COP 17 in South Africa. This will require parties to work together in good faith to create sufficient gains at Cancun, and a clear roadmap to South Africa. This paper outlines how that could be achieved. 

CAN Intervention at the Bonn ADP2-6 Opening Plenary, 20 October 2014

Thank you Co-Chairs,

I am Vositha Wijenayake speaking on behalf of Climate Action Network.

The INDC draft decision text needs to be finalized at this session. CAN believes that INDCs from all major economies need to be submitted by March 2015. It is crucial that INDCs are detailed and come early enough, to support a comprehensive and meaningful review process. This review will ensure that contributions from countries are fair and equitable in relation to each other as well as ambitious and scientifically adequate to put us back on a climate safe trajectory.

Locking in low ambition within the INDCs is a real danger. The INDCs need to have a five-year cycle with the first cycle ending in 2025. The EU is likely to decide on its contribution in the coming days and we urge them to set the bar high enough for others to follow rather than initiate a race to the bottom.

On climate finance: developed countries need to accept that providing finance is part of their fair share in the global effort alongside mitigation efforts. In Paris we will need new collective targets for public finance but also individual quantified commitments. The INDC should include such planned commitments as otherwise it would not be possible to assess if a country does its fair share.

Thank you

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Submission on Intended Nationally Determined Contributions (INDC)

Governments at COP19 in Warsaw agreed to “initiate or intensify preparations of their intended nationally determined contributions” (INDC) to meet the ultimate objective of the convention. It was also agreed that governments in ‘a position to do so’ would submit their INDCs by March 2015. At the Climate Summit in New York, the commitment to come forward with INDCs was further reiterated. Even though there is broad agreement on the need to submit INDCs much ahead of COP 21 in Paris, there is still not enough agreement on the shape of these INDCs.

Climate Action Network (CAN) with this submission intends to elaborate its thinking around the INDCs as well as provide solutions towards the continuing disagreements between governments as well as clear the ambiguity around the concept of INDCs. 

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CAN Talking Points on Resource Mobilization for the Green Climate Fund

  • There is an urgent need to scale up climate finance to at least $100B in public finance to support mitigation efforts and meet urgent adaptation needs. Given that the GCF will play a key role in channeling this climate support, substantial contributions to the GCF will be essential to build momentum towards an ambitious deal in Paris.
  • Towards this end, developed countries must pledge at least $15 billion in grants before COP 20 as an initial resource mobilization, to be paid into the Fund over a maximum of 3 years. Other countries and institutions in a position to do so should also pledge, but their contributions should be additional to the $15 billion goal. 
  • Developed countries should also, at the Lima COP, commit to continuously scale up annual contributions to the GCF. This scale up should reach $30-50 billion a year by 2020.
  • Contributions from developed countries should be additional to existing climate and development financing, and not be shifted from other development and environmental purposes.
  • The GCF should establish a regular, formal replenishment process after the initial resource mobilization phase in order to enhance predictability of contributions. In addition, it should be prepared to receive funds from innovative new sources of public finance.
  • The GCFs formal replenishment process should include effort-sharing arrangements in line with the outcome of broader UNFCCC negotiations on equity and CBDR-RC and may include a broader pool of contributors based on their respective responsibility and capacity. Countries should commit to operationalizing the GCF as soon as possible, by establishing an expeditious accreditation process and immediately launching at-scale readiness support. 
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CAN Intervention: ADP Closing Plenary SB40s, not delivered, 15 June, 2014

 

This written intervention is submitted by the Climate Action Network to the final plenary of ADP2.5.

This session began on a high note with positive signals coming out of two major emitters.  During the session, we heard over 60 countries expressed support for the idea of a phase out of greenhouse gas emissions.  These are encouraging developments, however, as the now inevitable ultimate collapse of sections of the West Antarctic Ice Sheet remind us, all countries need to be going further, faster.  We expect - and we need - more positive signals and firm new commitments coming out of September’s Ban Ki-Moon Summit, COP20, and through to the March 2015 deadline for post-2020 contributions. 

In Lima, Parties will need to agree on the upfront information required for their post-2020 contributions as well as the process by which those contributions should be assessed.  We are concerned that some Parties do not think such an assessment is necessary.  CAN believes warming should be limited to 1.5°C.  The commitments made in Paris must be consistent with such a temperature goal.  We will conduct a civil society review to ensure that proposed contributions - both mitigation and financial - are adequate and equitable.  At a minimum, an official space within the ADP should be created for civil society and research organisation to present the outcomes of their assessments in June 2015; in addition to the question and answer sessions we expect Parties to hold regarding their contributions.  Parties will also need to agree on a deadline for resubmitting contributions prior to COP21 should these prove inadequate.

To enable such an assessment, proposed contributions must be quantifiable, comprehensible, comparable and reproducible and this should be reflected in upfront information requirements.  For developed countries, there must be no backsliding from the Kyoto approach with multi-year carbon budgets based on common metrics.  This type of commitment should be expanded to a broader group of countries, including all in the OECD.  Finance is also a core element of the upfront information requirements.  It is an integral part of fair share for developed countries and, in the post-2020 context, for those with comparable levels of responsibility and capability.  The upfront information requirements should also include an agreed list of equity indicators which Parties should use to explain why their proposed contributions represent an ambitious and adequate contribution to the glob­al climate challenge.  To avoid locking in low levels of ambition, all contributions must have a common end date of 2025, while Parties should also indicate their emissions pathways over the longer term in 2030, 2040 and an ultimate phase out of fossil fuel emissions in 2050.

In Paris, Parties have to commit to phasing out fossil fuel emissions and phasing in a 100% renewable energy future for all by mid-century.  In order to achieve these goals, we need to act now.  Lima must capture progress under workstream two and Parties must agree to concrete measures to reduce emissions.  The technical expert meetings should continue beyond 2014 until we have closed the gap.

We look forward to a productive session in October.  Much remains to be done to ensure ambitious outcomes in Lima, Paris and beyond.

Thank you Co-Chairs.

 

 

ECO’s Climate Summit expectations

As the UN Secretary General’s Climate Summit approaches, we are sure Parties, investors and businesses are wondering how to pack their bags and appropriately prepare for New York this September.

ECO would like to help. We know that Parties sometimes struggle with long lists of things they need to prepare. There is a regrettable tendency for some Parties to forget what they have already packed interventions in their bags already, or to wear old items of clothing in the hope that we don’t notice that it’s just the same old thing refashioned.

However, without any kind of a list to work from, ECO is concerned that Parties will arrive in New York completely not dressed appropriately for the occasion. Hot air and vague promises are not going to provide the cover needed at the summit. So here is what ECO recommends that Parties should pack for the Climate Summit:

1) New measures to scale up investment in, and deployment of, renewable energy and energy efficiency. This will to help fill the pre-2020 mitigation gap, but will also help you to pledge your support for a just transition to a fossil-free and 100% renewable future by 2050.

2) Then, if you are committed to a just transition, you will want to come to New York with substantial pledges for the Green Climate Fund and a commitment to increase the overall scale of climate finance.

3) And obviously, becoming fossil free means sending a strong signal that the age of coal is over. That means announcements from the US and China (inter alia) on domestic limits to coal use (going beyond current plans), the phase out of export credit and development bank finance for coal infrastructure from OECD countries, and coal divestment announcements by private sector actors.

If you arrive at the Summit with all of this in your suitcase, then you will be the talk of the town as all your clothing choices will make a climate fashion statement that the world will applaud about your determination to achieve a strong climate agreement in Paris and stop climate change.

Thanks in advance from ECO. We can’t wait!

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Adaptation Fund overlooked because there’s a new kid in town?

While we all breathlessly wait for big money to hit the GCF (US$15 billion in pledges is expected by the end of this year), ECO would like to remind everyone that there are other funds in dire need of money too. One of them, the Adaptation Fund, which has projects ready to be implemented in vulnerable countries such as Ghana, Mali or Nepal, is now just waiting for the resources to get those projects started.

Pledges to the Adaptation Fund were among the very few positive outcomes from Warsaw. ECO is shocked that some countries have not yet paid up. Given the urgency of climate change, ECO would love to see the October session kicking off with the transfers of pledged funds from both Belgium and France, who, as the host of the 2015 COP, may want to uphold its commitments.

Honouring pledges made in the past is obviously critical, but so is putting the Adaptation Fund permanently on a more sustainable funding base. This could be done by, for instance, tapping into alternative sources that auto-generate revenues. Until then, the Fund’s board will have to continue to announce fundraising goals as it had to do for 2014 and 2015 ($80m each). ECO expects that Lima will see developed countries make pledges for the tried-and-tested, fully operating, but under-resourced Adaptation Fund.

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Renewables save money, lives and jobs

ECO is excited about the many voices in favour of a future powered by renewable energy. On Thursday, it was UNEP’s turn to explore the role of renewables and energy efficiency (RE & EE) in achieving Sustainable Energy for All. Their side event presented, among other things, findings from the International Renewable Energy Agency’s (IRENA) REMAP 2030 study.

ECO finds some of the findings so cool that they should be printed on T-shirts, so we did:

Renewable energy and energy efficiency are the worlds best chance to avoid catastrophic climate change.

Or how would “If we use more renewable energy, we save money” work on a poster hanging in a minister’s wall?

Renewables are crucial in achieving modern energy access for all. According to IRENA, renewables are now the lowest-cost solution for new capacity in an increasing number of countries and regions. Many RE technologies are significantly cheaper than diesel- or kerosene-based systems, and cheaper than extending the grid into rural areas with low per capita energy demand. In addition, renewables offer more security and greater reliability than fossil fuels.

There are other benefits too. Doubling the share of RE in the global energy mix to 36% by 2030 could result in 900,000 additional direct jobs in the energy sector, and reduce health-related costs by up to US$200 billion annually. When taking the true costs of fossil fuel use into account, switching to renewables could deliver overall savings of up to $740bn per year by 2030.

If we really get going, renewables can be even bigger, like 40% by 2030, which is close to what, for example, Greenpeace and WWF scenarios show is needed to put us on a path to 100% RE by around mid century. So let’s rock!

But here’s the real take-home message, especially for all the developed country finance negotiators: to maximise renewable energy uptake and provide modern energy access for all, international cooperation is not just desirable, but absolutely essential, along with access to finance.

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Putting climate finance needs in context

Full points for the moderators of the Long Term Climate Finance discussions yesterday for trying to inject some energy into the rather stale discussions of scaling up finance to meet the commitment of US$100 billion by 2020. Their chosen format of “world café discussions” with participants encouraged people to circulate between the four small group discussions in Salon Beethoven.

ECO picked up some encouraging snippets from the conversation like “need for quantitative and qualitative aspects of pathways to $100 billion”,  “develop innovative sources like bunker finance and financial transaction taxes”, and “50% for adaptation is important.” Clearly something has to change to get something concrete and useful out of this process. Perhaps changing the frame of reference might be helpful.

ECO has heard some countries lamenting about how difficult it was to provide public finance at the scale of tens or a hundred billion dollars per year. Put in the context of the scale of investments and financial flows in the larger economy, the financing required to address climate change is indeed quite modest and would be entirely manageable, if climate change was given the importance it deserved. 

Some examples of scale of financial flows and investments in the global economy:

$1.8 quadrillion: Amount of financial transactions in the UK in 2013.[i]

$350 trillion: Global urban infrastructure and usage expenditures in dwelling and transportation for the next three decades.[ii]

$100 trillion: Estimated amount of global Assets under Management (AuM) in 2020 (in pension funds etc).[iii]

$63.4 trillion: Global stock market capitalisation in the 58 largest stock exchanges in November 2013.

$30 trillion: Global stock market capitalisation amount lost in 2008 and restored over the following 4 years.[iv]

 

Examples of scale of public finance investments:

$7.7 trillion: Bloomberg’s estimate of bailout from Federal Reserve to rescue the US and global financial system during the 2008 financial crisis.[v] Other estimates go as high as $29 trillion.[vi]

$1.5 trillion Total global defence spending in 2014.[vii]

€1 trillion: Public revenue lost in the EU alone through tax avoidance, evasion and fraud.[viii]

$544 Billion: Global fossil fuel subsidies in 2012.[ix] 

 

Scale of Climate-related figures and investments required

$125-145 trillion: Estimate for the total annual global ecosystem services in 2011.

$5 trillion: Amount of annual investments needing to be “greened” according to the WEF.

$700 billion: Amount of annual new investments needed in low emissions technologies in global energy sector, according to IEA.[x]

$400 billion: Amount of those investments required in developing countries (rough estimate).

$100 billion: Amount developed countries committed to “mobilise” by 2020, including public and private, through bilateral and multilateral channels.

 

CAN asks for Public Finance

>$100 billion: Per year, amount of public finance needed by developing countries to meet adaptation needs and to contribute to mitigation efforts for staying below 2°C.

~$100 billion: Amount of public finance that should be provided per year to developing countries as part of meeting above $100b commitment by developed countries.

$25-100billion: Amount of public finance that should be be channeled through the GCF by 2020.

$15 billion: Amount of public finance that needs to be pledged by November 2014 as part of the GCF initial resource mobilisation by 2014.

 
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