|Divest campaign (Source: 350.org/Melbourne, Australia )|
Angela Yeh, Climate and Energy Project Officer at Delta Electronics Foundation
It has been almost a hundred days since the Paris deal was adopted – what has changed since the relative success of COP21? Are we rerouting to a trajectory that is not destined to self-destruction? Evidently, a three-month grace period offers only a peek into the changes and the potential changes post-Paris – nevertheless, the following efforts have taken place around the world:
In early March, the G20 meeting convened in Shanghai, where leaders of the worlds’ largest economies discussed, among many other things, the commitment to and implementations on green investment. The definition of green investment, though ambiguous, encompasses anything from renewables, energy efficiency, sustainable transportation to fossil fuel subsidy reform. Collectively, major economies pledged a staggering amount of 90 billion USD over the next decade on climate-related financing.
Rich countries talking about investments in the context of green growth, and not just growth – is itself a signal that countries are no longer seeing climate change as a responsibility or liability, but one of opportunity. The G20 set up the ‘Green Finance Study Group’ (GFSG) to specifically focus on investment that shies away from such that incurs environmental externality. The second meeting that follows this GFSG will take place later this month, in London.
This week, Norway’s £500bn sovereign wealth fund drops deforestation firms and Sweden pledges to be carbon neutral by 2045. The good news is, countries are not the only ones that see this untapped pie (of divestment opportunity) that is ever-growing – the private sector is literally strategizing areas for green investment opportunities by the day. At the Sustainable Innovation Forum in Paris last year, BMW, Gogoro, Danfoss, as well as Delta Electronics, and many other forerunner companies, have not only voiced the importance of a green transformation on their respective supply chains, but also pledged to reduce their emission of global warming gases with great ambition.
The financial sector has seen similar momentum on green growth, particularly on clean energy financing. JP Morgan, for example, will stop financing new coal-fired power plants in what they called ‘high income’ countries. According to Yale’s environmental blog, Environment 360, “Bank of America, Citigroup, Morgan Stanley and Wells Fargo have made similar pledges in recent months, all part of a larger divestment movement aimed at transitioning the world’s economies off fossil fuels.” Coincidentally, the coal industry struggles as it suffers from continuous drop in prices ($140 USD per ton in 2009 to $42 in 2016), partly due to a transition to natural gas and renewables, and partly from the heavy worldwide campaigning on anti-coal as an energy source. The emergence of cheaper and more scalable renewables, widespread adoption of more natural gas (and some shale), compounded by a cap on national greenhouse gas emissions (in the form of Nationally Determined Contributions, or NDCs) – has led to the gradual irrelevance of coal. The decision to end coal financing from the financial sector sends clear signals to investors and policy makers – that divestment is the way forward.
The UNFCCC, the climate change governance body at the United Nations, has proven itself to have the convening power to create tangible outcomes at COP21, with the leadership from people like Christiana Figueres, Laurent Fabius and many heads of states. In addition to the political momentum that was reached then and there, the large sums of money promised by ‘rich’ countries has finally begun to materialize, too.
One of the UN financial mechanisms for climate financing is the Green Climate Fund (GCF). This relatively new fund was established in 2013 and has only been operationalized in 2014 as it approved its first eight projects in Zambia during the 11th board meeting. The 12th board meeting just took place in Songdo, Korea. As the first meeting since Paris, the most recent meeting discussed GCF’s strategies moving forward, and approved new accreditations requests. Though the exact mechanism of which it will operate on is still ambiguous at this point, the fund is expected to approve USD 2.5 billion worth of projects in 2016. On the multilateral development bank front – the World Bank, Inter-American Development Bank (IDB) and Asian Development Bank (ADB) are ramping up regional and sectoral green financing, including but not limited to mitigation and adaptation. ‘Cross-cutting’ green finance is also gaining traction, with over 1/3 of the Green Climate Fund’s (GCF) available funds designated to such.
Last month – February, 2016 – turned out to be the warmest seasonally adjusted month in over a century. NASA showed that it was 1.35°C above 1951-1980 global average for the month. The previous highest record was actually the month before that – January this year was 1.14°C above the same timeframe average. It is disheartening to imagine the temperature rise arms race that our earth is enduring. If there is any console at all, it is that the aforementioned actions are helping to paint a less gloomy picture of the warming world, at least for the time being.