Last month, from Bangladesh to Kenya to Washington DC, over 40,000 activists in nearly 20 countries hit the streets calling on banks, governments and financial institutions to “#FixTheFinance” pushing the planet to the brink. 

It’s clear that we can’t address the climate crisis unless we fix the finance flows that are failing the planet. When we know that we have hardly any time left to avoid runaway climate breakdown, it’s absurd that so much of the world’s money is still being poured into fuelling climate change, while barely any is going to the solutions. 

Let’s face it – the climate crisis is really about money, and our choices to use it and make it in really stupid ways.  

G7 offers tepid response to appeal for “bolder” climate action

Many of the world’s most powerful private banks are holding their Annual General Meetings over the next weeks. Banks like Barclays, HSBC and Citibank are pumping billions into fossil fuel expansion, knowing full well that their decisions directly lead to climate chaos and devastating local pollution, particularly for communities in Africa, Asia and Latin America. At their AGMs they will undoubtedly celebrate their profits, self-congratulate on miniscule policy tweaks, and try to ignore the clamour of climate criticism.   

ActionAid research last year showed that these banks are financing an astonishing amount of fossil-fuel and industrial agriculture activities in the Global South, causing land grabs, deforestation, water and soil pollution and loss of livelihoods – all compounding the injustice to communities also getting routinely hit by droughts, floods and cyclones thanks to climate change.  

HSBC, for example, is the largest European financer of fossil fuels and agribusiness in the Global South. Barclays is the largest European bank financier to fossil fuels around the world. And Citibank is the largest US financier of fossil fuels in the Global South. The banks have so much power, and so much culpability, much more than most people realise. But they want us to forget the fact that they are working hand in hand with, and profiting from, the industries that are wrecking the planet.  

The banks can actually turn off the taps. They can end the finance flows that are fuelling the climate crisis. So to avert catastrophic climate change, the fossil-financing banks must start saying no to the corporations destroying the planet.  

But it’s not only private finance that is flawed – public funds are being misused as well. Governments are using far more of their public funds to provide subsidies or tax breaks for fossil fuels and industrial agriculture corporations, than they are for climate action. This is ridiculous – it’s hurting the planet, and its hurting people.  

Public funds instead need to be redirected towards just transitions that address climate change and inequality.  

There is growing appetite for climate action. But this just isn’t yet matched by willingness to pay for it. Or even to stop profiting from climate destruction. 

COP29 finance goal

This year’s COP29 climate talks will be a critical test of rich countries’ commitment to securing a liveable planet. The world’s poorest countries are already bearing the spiralling costs of a warming planet. So far they have only received begrudging, tokenistic pennies from the rich polluting countries to help them cope. The offer of loans instead of grants in the name of climate finance is just rubbing salt into the wounds. 

If we want to unleash climate action on a scale to save the planet, rich countries at COP29 will need to agree a far more ambitious new climate finance goal based on grants, not loans. 

Because if we want to save our planet, we will actually need to cover the costs. 

Tensions rise over who will contribute to new climate finance goal

Last month the International Monetary Fund and the World Bank held their Spring meetings in Washington DC. These institutions are powerful symbols of the planet’s dysfunctional finance systems which urgently need fixing. The World Bank is financing fossil fuels yet being extremely secretive about it. The IMF is pushing climate-devastated countries deeper into debt that often requires further fossil extraction for repayment.

Even as they brand themselves as responsible channels for climate finance, the world’s most powerful financial institutions are pushing our planet to the brink. Their stated aim to get “bigger and better” really amounts to all-out push to get “bigger” but only token tweaks to get “better”.  The Spring meetings ended with business-as-usual backslapping. But if they were taking climate change and its consequences seriously, at the very least, the IMF and World Bank would stop financing fossil fuels and cancel the debts that are pushing climate-vulnerable countries into a vicious cycle.  

Will blossom of reform bear fruit? Spring Meetings leave too much to do

All of these finance flows need fixing. At the moment, the global financial system is better designed to escalate – rather than address – climate change, vulnerability and inequality. The activists, youth and frontline communities who filled the streets last month hope that their calls to stop financing destruction will be heard in the boardrooms and conferences on the other side of the world. 

They say that money talks. This is the year that the climate movement is going to make sure it listens.  

The post How to fix the finance flows that are pushing our planet to the brink appeared first on Climate Home News.

At around 1am on Wednesday, more than 60 developing countries including India, Indonesia and all African countries walked out of the negotiations on finance. They claimed there was a lack of commitment from developed countries to fund efforts to protect nature. 

“We feel that resource mobilization has been left behind,” one delegate who walked out told CTV News. “It’s everyone’s problem, but we are not equally responsible for the drivers that have led to the destruction of biodiversity.”

Rising tensions have put talks “on the edge of a full breakdown,” WWF campaigner Innocent Maloba said. So ministers will have to rescue a last-minute agreement before the talks end on Monday.  

Cop15: Governments split on ditching nature-harming subsidies in Montreal

During the high-level plenary, which marks the last part of the negotiations, hosts Canada said they were “ready to engage on discussions on the scale of funding” needed to achieve a successful agreement. 

“Many of you have made it clear that ambition must be supported by an increase in funding, as well as improvements in the predictability, transparency, comprehensiveness and accessibility of funding,” said the country’s environment minister, Steven Guilbeault.

The #COP15HighLevelSegment has kicked off!
Xi Jinping, President of delivered a video message to #COP15 @Csaba_Korosi_ president of @UNGA, @AminaJMohammed DSG @UN, @s_guilbeault Minister of @environmentca, Mr. Wang Xiangxiang, @francoislegault, & @mremae delivered remarks pic.twitter.com/EyOrGlC9MF

— UN Biodiversity (@UNBiodiversity) December 15, 2022

China is co-hosting the talks, which were originally supposed to be in the city of Kunming. Its government was less specific about the actions needed.

During the plenary, the country’s president Xi Jinping sent a video message urging countries to “push forward the global process of biodiversity protection, turn ambitions into action” and “support developing countries in capacity building”.

Where is the money? 

Countries are negotiating a plan to reverse nature destruction this decade. A 2017 study shows that immediate action is needed to halt mass extinctions, which threaten essential ecosystem services for humanity.

To achieve this, finance “is critical”, but negotiations around it have stalled and they currently have more issues up for debate than other sections of the text, observers said.  

“As in prior Cops for both climate and biodiversity, the hardest parts get left to the very end,” said Mark Opel, finance lead for the observer NGO Campaign for Nature. 

The world needs to mobilize around $700 billion per year to reverse the destruction of nature, a 2019 report by The Nature Conservancy, the Paulson Institute and the Cornell Atkinson Center for Sustainability estimated.

The latest draft of Montreal’s “nature pact” proposes $200 billion in direct funding and $500 billion by eliminating and redirecting subsidies that harm nature, for example by promoting overfishing, monocultures or fossil fuel expansion.

Brazil and African countries have pushed to create a new fund for biodiversity separate from the Global Environmental Facility (GEF), the leading UN financial mechanism for nature. 

UN nature pact nears its ‘Copenhagen or Paris’ moment

One Latin American negotiator told Climate Home many developing countries have faced difficulties accessing GEF funds.

Developed countries want to strengthen the GEF and mobilise non-government sources of funding instead of creating a new fund. “We need to unlock private and philanthropic support, development bank modernisation and subsidies realignment,” said Guilbeault. 

Realigning subsidies plays an important role in getting new funds for biodiversity but negotiations around this topic have also proved difficult. The world spends an estimated $1.1 trillion per year subsidising nature-harming activities. 

Maloba said funds from developed countries would be crucial for a successful outcome in Montreal. “It is particularly concerning that donor countries don’t look to be ready to step up on international biodiversity finance, despite some welcome commitments in the lead in,” Maloba said. 

The post After developing country walkout, ministers arrive to rescue nature talks appeared first on Climate Home News.

Our communities in Indonesia have suffered from the climate crisis and it is critical that governments, especially those most responsible for it, take action.

But his promise rings hollow for us. Despite Japan’s commitment, it is moving forward with plans to finance a new coal plant in our community – one that will dirty our air, destroy our livelihoods and worsen the climate crisis. Further, Japan has made efforts to undermine global negotiations to phase out overseas coal finance.

If Japan is truly serious about the climate crisis, it must cease all support to new coal plants including those under consideration and in the pipeline.

And that must include Indramayu.

Analysis: Who will build the world’s last coal plant?

The proposed 1,000 MW Indramayu coal-fired power plant in West Java poses serious threats to our community. Like many other coal projects, Indramayu will not bring the development benefits claimed by the Japanese government. Instead, the project will worsen the climate crisis, undermine our human rights and pollute our air. Our sustainable livelihoods – based on rice cultivation, vegetable farming and coastal fishing – will be destroyed.

We refuse the development of such projects on our behalf.

Since 2016, we, especially peasants who will lose our livelihoods when our productive farmland is razed for the power plant, have been raising our voices to the Japanese and Indonesian governments in strong opposition to Indramayu. In response, local farmers have suffered serious human rights violations and criminalization for participating in protests. Several farmers were faced with false charges and jailed for 5 to 6 months. Repression and violence towards community members protesting coal projects is unacceptable and far too common.

Indramayu is a white elephant project. Despite claims that it is needed for reliable power supply for the Java-Bali grid, the grid is oversupplied and the reserve margin is currently around 30%.

No time for loopholes: Japan must immediately end all overseas coal finance

Last year, UN Secretary-General António Guterres called on countries to stop building new coal plants by 2020 and shift towards clean energy. New coal-fired power plants typically operate for decades, thereby “locking in” future greenhouse gas emissions. Every new coal plant that is built is utterly inconsistent with the Paris Agreement’s goals of limiting warming to 1.5°C.

On November 12, France is hosting the first global meeting of public development banks to reconcile “the entire finance community in support of the common action for climate and the UN sustainable development goals.” Japan will participate, but their continued financing of new coal plants is at odds with the summit’s objectives.

After facing intense international criticism, the Japanese government adopted a policy in July stating that “in principle,” the government will not provide financial support for new coal plants for any host country that does not have a policy for transition to decarbonisation. However, the principles leave a major loophole, since they do not apply to projects that are at the planning stage, including Indramayu. The Japan International Cooperation Agency (JICA) is still considering providing $1.8 billion for construction of the Indramayu coal plant.

We call on the Japanese government and JICA to reject financing of the Indramayu coal plant and to cease overseas coal finance without exception. Indramayu must not be pushed through at the expense of the livelihoods and environment of our local community, the climate, or in exchange for future generations’ opportunities and choices.

We appreciate promises from the international community, including Japan, to tackle the climate crisis. But until these commitments translate into real action, they aren’t worth the paper they’re written on.

Rodi is the head of JATAYU, the Indramayu Coal Smoke Free Network.

Meiki Paendong is the executive director of the Indonesian Forum for Environment (WALHI) West Java.

The post In Java, a Japanese-financed coal plant threatens our health and livelihoods appeared first on Climate Home News.

Shanghai’s financial district (Flickr/Wolfgang Staudt)

By Megan Darby

China’s economic slowdown became undeniable this week, with a market crash reverberating around the world.

On “Black Monday”, named by usually tight-lipped state media, the Shanghai stock exchange fell 8.5%, the sharpest drop since 2007. It slid another 7.6% on Tuesday.

The panic rippled through to US and European financial hubs, as investors adjusted their expectations for trade and growth.

So what does it all mean for emissions, low carbon investment and December’s crucial Paris climate summit?

Comment: Is China a climate hero or villain?

In the short term, slower GDP growth in China – we’re looking at 5-7% this year, down from double digits – means lower emissions.

Declining Chinese coal use was a key factor in global greenhouse gas emissions flatlining last year – although Chinese energy data is not always reliable.

Weaker energy demand projections are further depressing the global oil price, which hit a 6-year low of $42.23 on Monday.

From a climate perspective, the bad news is that low prices are increasing oil demand – a driver of emissions. The International Energy Agency forecasts 2015 to see the highest growth in consumption in five years.

Study: Financial gatekeepers are blocking green investment

It also makes it harder for electric vehicles to break the stranglehold of the internal combustion engine over transport, for example.

The good news is many high cost oil ventures – worth US$200 billion, according to a recent analysis – are on hold. These include Arctic and tar sands plays that scientists say are incompatible with the international goal to hold warming to 2C.

Perhaps more important is the impact on investment flows and the low carbon transition.

Greenpeace’s Energydesk was quick to point out that coal and oil companies were suffering.

Mining giant Glencore, already reeling from a first half earnings slump, took an 8.5% hit to share value on Monday. Anglo American, Rio Tinto and BG Group were also down.

Expert warns: Ditching China’s coal addiction will take decades

But as Climate News Network reported earlier this month, solar panel manufacturers are also having a rough ride on the stock market rollercoaster.

Some 40% of the world’s solar panels are made in China, in a sector made vulnerable by slim profit margins.

PwC’s Jonathan Grant tells RTCC that despite all the uncertainty, there is little change in the general outlook.

He says: “While the reaction of global markets shows how influential Chinese investment and outlook is, short term fluctuations in the equity markets are unlikely to have a big impact on energy investment, whether it is low or high carbon.”

Within China, the government’s reaction will be critical, according to Ailun Yang, China strategist at NGO Climateworks Foundation.

Analysis: Inside China’s investment binge in Latin America

On the one hand, she says, the market shock puts more pressure on provinces and cities to restructure their economies. Many have already introduced tough regulations on manufacturers and power plans, in a bid to curb dangerous air pollution.

But for the Beijing government, she notes, “whenever the economy isn’t doing so well, there is always a tendency to make a big supportive package… Very often, those packages will then go into carbon intensive industries.”

It is too early to say whether this is a market correction or systematic downturn, says Li Shuo of Greenpeace.

He adds: “Ultimately, for the environment and climate, the key is whether China can weather through this round of volatility and be truly transformed into an economy that relies less on energy intensive industries.”

Paris tracker: Who has pledged what for 2015 UN climate pact?

Keeping an eye on the long term will also be important for negotiators looking to finalise a global carbon-cutting pact in December.

The last time leaders attempted – unsuccessfully – to strike such a deal, Copenhagen in 2009, recession “cast a bit of a shadow” over proceedings, Grant says. But it wasn’t a significant factor in the outcome, in his view.

“The negotiations often proceed in isolation of external events, and in many respects ignore short term fluctuations as they are focused on the longer term low carbon transition.”

Governments are submitting national climate pledges – 56 to date – to the UN that will underpin the deal. These set out strategies for greening their economies out to 2025 or 2030.

Grant adds: “Given the scale of the low carbon transition, the modest corrections in economic growth are unlikely to have a big impact on countries’ longer term plans to decarbonise their economies or the investments needed to achieve them.”

The post What does China’s Black Monday mean for the climate? appeared first on Climate Home News.

(Flickr/steve p2008)

By Megan Darby

Investment consultants are holding back finance into low carbon sectors by failing to consider the long term, according to a study from Oxford University.

Acting as gatekeepers for major funds like pension providers and insurers, investment consultants have a key role in determining where money flows.

Yet they are rewarded for performance over the short term, which gives them little incentive to consider long term risks like climate change, researchers found.

Ben Caldecott, director of the university’s stranded assets programme, said: “Investment consultants are evaluated according to short-term appraisal cycles.

“Even when longer-term perspectives are clearly superior, they may be compelled to press for alternatives that perform ‘better’ in the short-term. Pension funds should alter mandates to avoid this.”

Analysis: Do asset managers have a duty to reduce their climate risks? 

For their part, Caldecott said pension funds were confused about whether their fiduciary duty allowed them to act on climate change.

It does, he argued, but “investment consultants are not pressing as proactively as they should be, which might be seriously harmful.”

In the past, fiduciary duty has been narrowly interpreted to mean funds should focus solely on financial returns for their pension holders, to the exclusion of sustainability considerations.

On the contrary, UN climate chief Christiana Figueres has argued, it is a breach of duty for investors not to green their portfolios.

Addressing an investment summit in New York last year, she said: “Investment decisions need to reflect the clear scientific evidence, and fiduciary responsibility needs to grasp the intergenerational reality: namely that unchecked climate change has the potential to impact and eventually devastate the lives, livelihoods and savings of many, now and well into the future.”

Terrifying math: How Carbon Tracker changed the climate debate 

This is particularly important for fossil fuel assets, which may be overvalued by advisors focusing on the short term.

Traditionally seen as safe investments, coal, oil and gas companies are on a collision course with climate action.

To limit warming to 2C above pre-industrial levels – as agreed by governments – scientists calculate more than a third of oil, half of natural gas and 80% of coal needs to stay in the ground.

That is at odds with the business plans of energy majors, who forecast continued demand growth for decades.

As long as large sums of money remain locked into such companies, it limits the finance available for low carbon sectors like renewable energy.

Some big investors, notably Norway’s US$900 billion oil fund, have started divesting from their most carbon intensive holdings in recognition of this clash.

Recent analysis has shown portfolios that excluded fossil fuel holdings would have outperformed the market over the last five years, challenging the idea that green investment means sacrificing returns.

Caldecott said investment consultants were jeopardising their reputations if they failed to prepare clients for risks like climate change which, he said, “are having significant impacts much sooner than previously anticipated.”

The post Financial gatekeepers are blocking green investment – study appeared first on Climate Home News.

Large tracts of forest have been cleared to grow palm oil, found in many food and cosmetic products (Pic: Marufish/Flickr)

By Megan Darby

Norway’s US$870 billion sovereign wealth fund is divesting from four major Asian companies over deforestation concerns.

The fund added South Korean firms Daewoo International and Posco, and Malaysia’s Genting and IJM to its exclusion list on Monday.

Its ethics advisors found the companies or their subsidiaries were involved in clearing tropical forest for palm oil plantations in Indonesia or Malaysia.

In each case, it judged there was an “unacceptable risk” of “severe environmental damage”.

The fund’s shares in those four companies totalled 2.2 billion Norwegian crowns (US$270 million) at the beginning of 2015.

Deforestation is a significant driver of climate change, accounting for an estimated 10% of global greenhouse gas emissions between 2000 and 2009.

It also threatens ecosystems in some of the most biodiverse parts of the world.

Report: Norway to ditch $8 billion of coal assets in state pension fund

The decision to stop investing Norway’s money in deforestation culprits follows a landmark parliamentary vote in to pull out of coal companies.

While it amassed its wealth from fossil fuels – revenue from the country’s substantial oil reserves – the fund is seen as a leader on considering climate change risk.

After the latest additions, it has 64 companies on its blacklist. Wal-Mart was banned over human rights violations and Rio Tinto for its environmental record.

The post Norway fund divests from Asian firms over deforestation appeared first on Climate Home News.

Green bond will be used to support Chinese wind power business (Pic: Flickr/Land Rover Our Planet)

By Megan Darby

Chinese wind power company Goldwind has raised US$300 million in the country’s first green bond issue.

The financial product was nearly five times oversubscribed, with $1.4 billion worth of demand.

It will help fund the world’s highest emitting nation on its course to get 20% of energy from non-fossil fuel sources by 2030.

A taskforce led by the People’s Bank of China estimates the country needs US$320 billion a year 2016-2020 to fund environmental goals in its five-year plan, Reuters reported.

These included cleaning up smoggy cities and drinking water, as well as curbing greenhouse gas emissions.

Report: China poised for a boom in green bonds

Bonds are a stable, predictable type of investment attractive to institutions like pension funds and insurers. Globally, the bond market is worth some $100 trillion a year.

The “green” label is a recent development aimed at directing funds towards sustainable projects. In this case, DNV GL has verified Goldwind’s green credentials.

Following a growth spurt, the green bond market got off to a slow start in 2015, latest figures from the Climate Bonds Initiative show.

But Sean Kidney, head of the initiative, expressed a “cautious optimism” things would pick up, driven by interest from emerging markets including India and Brazil.

“There is no doubt that China is the most exciting story,” he told RTCC, with its central bank having drawn up guidelines for issuing green bonds.

The post Wind company raises $300m in first Chinese green bond appeared first on Climate Home News.

Two European offshore wind farms attracted $4.2bn investment last quarter (Pic: Statkraft)

By Megan Darby

European offshore wind farms and small-scale solar attracted big bucks last quarter while clean power investment flatlined, analysts say.

Worldwide, investors ploughed US$20.4 billion into the rooftop solar market April-June 2015, calculates Bloomberg New Energy Finance. That is a 29% increase on the same period last year.

Just two arrays of wind turbines in the sea – Germany’s Veja Mate and the UK’s Rampion project – attracted nearly $4.2 billion.

But overall finance for clean energy was down 0.2% from Q2 2014 levels to $73.5bn, on a strong dollar and volatile Chinese stock markets.

The US currency has risen over the past twelve months, making investments in other markets look less valuable by that measure.

Meanwhile fluctuating share prices, particularly in China, have held back clean energy companies from raising cash.

Michael Liebreich, chairman of the advisory board at BNEF, said the figures may yet be revised upwards, as more deals come to light.

“In the medium term, we expect investment to resume its strong growth,” he added.

The research body forecasts two-thirds of some $12.2 trillion to be invested in power generation by 2040 will be in renewables.

This article has been amended to show Q2 clean energy investment was $73.5 billion, not $53 billion as originally reported. BNEF found errors in the way analysts had added up project data. The research body apologised and promised to review its processes.

The post Offshore wind and rooftop solar have strong Q2 appeared first on Climate Home News.

Large tracts of forest have been cleared to grow palm oil, found in many food and cosmetic products (Pic: Marufish/Flickr)

By Megan Darby

Ten banks have agreed to support an end to deforestation by 2020 with their investment strategies.

Standard Chartered Bank became the latest to adopt the Soft Commodities Compact on Friday, bringing its coverage to 20% of the global agricultural commodity market.

The initiative lines up with efforts by 400 consumer goods companies to phase out rainforest clearance in their supply chains.

Mark Devadason, global head of sustainability at Standard Chartered, said adopting the compact “will help us support our clients to be here for good”.

Other banks to sign up include Deutsche Bank, RBS and BNP Paribas.

Report: Brazil targets landowners in Amazon reforestation plan

Under the compact, banks commit to work with retail giants to finance interventions that will help to avoid tree-felling.

Brands with buying power of US$3 trillion, including Procter & Gamble and Unilever, are aiming for zero net deforestation within five years.

This means increasing yields of products like palm oil instead of expanding plantations, or switching to more sustainable crops.

“There is a compelling business case for driving deforestation out of our supply chains,” said Jeff Seabright, chief sustainability officer at Unilever.

It is not only good for the company’s reputation but mitigates climate change and secures supplies of raw materials into the future, he added.

“The financial sector plays a critical role in enabling such win-win outcomes.”

Report: Fossil heavy FTSE 100 threatens economic stability

Banks can help by demanding their clients get credible certification to show they are walking the talk, said WWF-UK chief David Nussbaum.

“These 10 banks have set the bar for other financial institutions in terms of tackling deforestation – which is essential to avoid dangerous climate change…

“We call for all banks and investors to apply similarly robust policies across their business.”

Slashing and burning forest to grow palm oil or ranch cattle releases CO2.

Land use, including deforestation, is responsible for just under a quarter of man-made greenhouse gas emissions, according to the UN’s climate science panel.

The post Ten banks back zero net deforestation push appeared first on Climate Home News.

The Green Investment Bank targets risky sectors like offshore wind and bioenergy (Pic: Statkraft)

By Megan Darby

The UK government is to sell up to 70% of its flagship Green Investment Bank to pay off government debt, business secretary Sajid Javid revealed on Thursday.

As well as raising an estimated £1.4 billion for the Treasury, Javid is arguing the move will allow the fund to access greater volumes of capital.

But experts involved in the green bank’s formation slammed the move as “completely reckless” and “the last thing we need”.

Set up in 2012 to mobilise cash for otherwise risky low-carbon sectors like offshore wind and bioenergy, the fund has inspired similar ventures around the world.

Ben Caldecott, associate fellow of conservative think-tank Bright Blue and former advisor to the GIB Commission, said a publicly owned institution could work in the public interest.

“The last thing we need is a publicly supported, but privately owned, asset manager using subsidised capital and jobs to compete with the private sector,” he added.

Report: UK government Green Bank to invest in Africa and India

By committing £2 billion of its own funds to 50 projects, the Green Investment Bank has encouraged private investors to sink three times that amount into the green economy. It has kickstarted initiatives from LED streetlighting to energy from waste plants.

“It’s gone from strength to strength,” said chancellor George Osborne. “That is why we can now begin exploring options for moving the bank into the private sector to enable it to access larger pools of capital and act more freely to invest in a broad range of green sectors.”

Nick Mabey, head of E3G, which developed the idea for the bank, disagreed.

“Selling off a majority stake in the Green Investment Bank would be completely reckless,” he said.

“It has kept investment in the real economy going at a time when bank lending had fallen to an all-time low. It has played a critical role in supporting the UK economic recovery.”

#GIB is labour of love of many in politics, finance and civil society. It should be held in trust for all of us not sold to highest bidder.

— Matthew Spencer (@Spencerthink) June 25, 2015

The move comes as the Conservative government is putting the brakes on onshore wind farms. While they are the cheapest large scale source of renewable power, these turbines are attacked as unsightly by a number of backbench MPs.

Liberal Democrat and Green Party MPs questioned the Conservatives’ commitment to low carbon investment.

According to a Guardian report, Tim Farron, leadership candidate for the Liberal Democrats, said: “The decision is incredibly reckless and will damage investor confidence in the sector.”

Green MP Caroline Lucas agreed: “The government should keep at least a majority stake in the Green Investment Bank to ensure investor confidence is upheld and the commitment to low-carbon lending remains.”

The post Outcry as UK plans to privatise green bank appeared first on Climate Home News.

Abbot Point port is a gateway for coal from planned mines in the Galilee Basin
(Pic: Greenpeace/Tom Jefferson)

By Megan Darby

A massive coal port project at Abbot Point, Australia, got a Baa3 credit rating from Moody’s last year. That says it is a safe enough investment.

But scientists calculate 90% of Australia’s coal must stay in the ground to hold global warming to 2C – the international goal. Effective action on climate change will trash the value of the port.

It is an example of ratings agencies failing to account for climate risk highlighted by the Center for International Environmental Law (CIEL).

In a report published on Wednesday, CIEL found the likes of Moody’s and Standard & Poor’s are systematically overvaluing fossil fuel assets.

“Fossil fuels are on the way out,” said Niranjali Amerasinghe, climate expert at CIEL. “Overstated credit ratings threaten not only investors and markets, but ultimately the global economy.

“They also contribute to overinvestment in activities that cause climate change, threatening our ecosystems and the people who depend on them.”

Analysis: A 7-step plan to avoid stranding your fossil fuel assets

Ratings agencies are trusted to advise investors on hidden risks. Yet they did not flag up problems with sub-prime mortgages that led to the 2008 financial crash.

Similarly, they are still assessing high carbon projects on the basis of a climate trajectory leading to more than 4C of warming.

That is incompatible with efforts by governments to crack down on greenhouse gas emissions and limit warming to 2C.

The polluting projects given an investment grade rating will either trigger catastrophic climate impacts – sea level rise and weather extremes – or lose value as regulations kick in.

In the latter case, CIEL warns the rating agencies could be sued by investors misled into backing worthless ventures.

The post Credit agencies are ignoring climate risk – report appeared first on Climate Home News.

What will oil companies be worth when you get old? (Pic: Flickr/Ed Yourdon)

By Megan Darby

Nine leading pension funds are cutting the carbon footprints of their investments in line with global efforts to curb climate change.

Yet 85% of the world’s 500 biggest asset owners – of which the majority are pension providers – have done little or nothing to address climate risk.

That was revealed in the third annual Asset Owners Disclosure Project (AODP) index on Monday, a survey of funds worth US$40 trillion.

If funds refuse to engage with these risks, AODP and Client Earth are preparing to help pension holders take legal action.

“At the top of the table, there are some really positive stories to be told,” says Julian Poulter, CEO of the AODP.

Australia’s Local Government Super, Norway’s KLP and the US CalPERS performed best. ABP and PZW of the Netherlands, the UK Environment Agency Pension Fund, New York State Common Retirement Fund, Australian Super and Sweden’s AP4 also achieved the maximum AAA rating.

Blog: A 7-step plan to avoid stranding your fossil fuel assets

Their portfolios may not yet be compatible with the international goal of limiting warming to 2C, Poulter says, but they are moving in the right direction.

At the bottom, investors “fail to use some of the basic judgement needed to assess climate risk”.

Only 7% of asset owners surveyed for AODP’s index even had the ability to calculate their carbon footprints. Just 1.4% had cut their carbon intensity in the past year and 2% planned to do so next year.

It means the retirement pots for millions of people remain heavily invested in fossil fuels, which will lead to catastrophic climate change if fully exploited.

In the event of effective climate action, on the other hand, those assets will lose value, dashing prospects of a comfortable old age.

Pension providers, insurers and sovereign wealth funds have the cash to drive a low carbon transition (Compiled by AODP in 2012 from STEM 2006)

Left unchallenged, the sector is headed for a shock similar to the sub-prime mortgage crisis, Poulter says. “We think it is a near certainty that that scenario will be replicated with climate change.”

Pension funds have legal duties to assess and manage material financial risks, so their members can rely on a regular income in their later years.

AODP and Client Earth have launched an initiative to identify where pension funds are neglecting those duties when it comes to climate risk.

They will engage with laggards first, explains Client Earth barrister Elspeth Owens. If pension funds do not come up to scratch, the NGOs will take them to court.

They are working within English law, which the AODP index would suggest gives plenty of targets to choose from.

Twelve UK pension schemes received the lowest possible X rating, including Tesco, Rolls Royce and the UK Parliament. Another fifteen scored a D, including the BBC, Unilever and Royal Mail schemes.

Several other jurisdictions are based on the English legal system, Owens says, so a test case could have global repercussions.

‘Disturbing picture’

Australian think-tank the Climate Institute, which worked with the AODP on the index, praises the two local funds to get AAA ratings.

“But overall the index this year paints a disturbing picture of the inadequate management of climate risks to Australians’ retirement nest eggs,” says CEO John Connor.

“Top rated funds protect their investments by engaging with the companies they own, divesting of heavily carbon-exposed assets, or deploying hedging strategies. Leaders are accelerating their efforts.

“Meanwhile, the laggards seem ignorant of climate risks as well as risks that high carbon investments will be left stranded, or made worthless, by cleaner technologies, pollution controls or changes in consumption.”

The ratio of high to low carbon investments across all 500 funds examined is 20:1, notes AODP chair John Hewson – a “bet on denial or inaction”.

He adds: “Too many Australian and global asset owners are risking either accelerating climate change by investing in heavily carbon-exposed assets, or being caught out by changing technologies and policies.”

The post Pension funds failing to manage climate risk could get sued appeared first on Climate Home News.

Major funds typically put 50-60% of their money in high carbon projects such as oil exploration
(Pic: BP)

By Megan Darby

Pension funds, insurance companies and sovereign wealth funds manage vast sums of money.

They can put it into oil exploration or windfarms, airports or railways. Those decisions have consequences for their financial sustainability, as well as for the climate.

When 460 of these corporations were asked last year to reveal their exposure to climate risk, 80% showed little or no evidence of action on the issue.

But following a plethora of investor-led pledges at Ban Ki-moon’s climate summit in New York, the Asset Owners Disclosure Project (AODP) is upping the pressure.

Today it asked more than 1,000 major funds worth US$70 trillion to reveal their exposure to high carbon assets.

Julian Poulter, CEO of AODP, said: “This is the moment for asset owners to prove to beneficiaries and stakeholders that they are serious about the commitments made at the UN Summit.

“The gap between investor leaders and laggards on climate action is growing rapidly and the world needs to know how large investors are pricing portfolio risk.”

Low carbon shift

Investment funds typically have 50-60% of their money in high carbon assets and less than 2% in low carbon assets, according to AODP.

Last week’s UN summit showed some appetite to change that, in response to the challenge of climate change.

Investors who manage US$24 trillion backed moves to put a price on carbon pollution worldwide. Funds handling US$2 trillion promised to support an expansion of the green bond market.

And a smaller group, worth US$500 billion, committed to revealing the carbon footprint of their investments, under the Montreal Pledge, launched on September 25.

They noted a duty, as institutional investors, to act in the long-term interests of their beneficiaries –pension holders, insurance buyers and citizens.

To do that, they must take into account the risks associated with climate change.

World leaders last Tuesday showed their support for a treaty to limit global temperature rise to 2C above pre-industrial levels.

That means curbing greenhouse gas emissions, which in turn means limiting demand for the fossil fuels that release them when burned for energy.

Analysis: Carbon bubble goes mainstream in New York

Energy stocks have traditionally been seen as low risk, but analysis by the Carbon Tracker Initiative suggests they are systemically overvalued, creating a “carbon bubble”.

Some 80% of known fossil fuel reserves cannot be safely burned, under this analysis, which will leave coal, oil and gas companies with worthless assets.

There are growing movements to encourage investors to divest from fossil fuels or steer clear of the highest carbon projects.

“The pressure to either divest, reduce fossil fuel investment or strongly engage is greater than ever and any fund who can’t demonstrate action risks intense scrutiny from all stakeholders,” said Poulter.

The AODP’s survey covers asset owners from 63 countries. It looks at five categories: transparency, risk management, investment chain alignment, active ownership and low carbon investment.

When the results are published, the AODP aims to show up those who do not back up talk with action.

Poulter said: “We now have to expose the green-washers who enjoy signing statements but who have no intention of acting decisively.”

The post No greenwash: Investors urged to disclose climate strategy appeared first on Climate Home News.

Tar sand exploration in Alberta, Canada: a risky investment, says the Carbon Tracker Initiative

By Megan Darby

Green campaigners have sought to block oil exploitation of the Arctic and Canada’s tar sands in horror at the impact on the natural environment.

The Carbon Tracker Initiative (CTI) is taking a different tack: highlighting the financial risk of such projects.

Its latest research shows the top 20 undeveloped high-cost oil projects – which happen to be among the most environmentally damaging – risk wasting US$91 billion of investors’ money over the next decade.

If the major oil companies cancelled these and other risky plans they could return US$357 billion to shareholders by 2025, it found.

“Investors are concerned about the levels of capital being sunk into future fields by the oil sector, but are not getting answers on the economics of the projects from the companies,” said James Leaton, CTI’s research Director.

“CTI has responded to demand for detail to enable shareholders to challenge where money is spent.”

Oil companies are exploring ever more difficult environments, from ultra deep water to tar sands, to find resources.

From Greenpeace’s Save the Arctic campaign to Tar Sands Action, protesters have focused on the climate impact of such ventures and risk of oil spills in sensitive environments.

“Without the Ice the Earth Will Fall” Emma Thompson’s moving call to #SaveTheArctic http://t.co/1znyHS7GFu Join her > http://t.co/ApDeu1VQGh

— Save The Arctic (@savethearctic) August 13, 2014

Analysis from CTI shows such projects are also a gamble for investors, which include the pension funds and insurance companies ordinary people rely on to safeguard their money.

These projects depend on a high future oil price to get a return on the capital investment. Meanwhile, political action to halt dangerous climate change is expected to cut demand for oil, pushing the price down.

International negotiators are aiming for a deal in Paris next year to cut greenhouse gas emissions and keep world temperature rise to 2C.

If they succeed, then only a fraction of the world’s fossil fuel reserves can be burned within the remaining “carbon budget”, estimated by the Intergovernmental Panel on Climate Change (IPCC) to be less than 500 gigatonnes of CO2.

Price gamble

The think-tank’s earlier research showed effective action on climate change should rule out ventures that need a price of more than US$95 a barrel to break even.

Some of the projects identified by CTI in its latest report need a price of more than US$150/bbl. That is according to data compiled by industry experts at Rystad Energy.

The most expensive was a US$2 billion Canadian tar sands venture by ConocoPhillips, which needs a price of US$159/bbl.

For the investment to pay off, the oil price would have to rise significantly from the US$105/bbl Brent benchmark price today. Oil prices can be volatile and have fallen as low as US$40/bbl twice in the last decade.

Shell is the most exposed, CTI found, with US$84 billion earmarked for risky projects. Exxon Mobil is next, with plans to spend up to US$56 billion on projects needing more than US$95/bbl to break even. Chevron and Total are each considering US$52 billion worth of high-cost ventures.

“This analysis demonstrates the worsening cost environment in the oil industry, and the extent to which producers are chasing volume over value at the expense of returns,” said Andrew Grant, CTI analyst.

“Investors will ask whether it is prudent for oil companies to bet on ever higher oil prices when they could be returning cash to shareholders.”

Industry position

Oil companies have shelved some risky projects already, as they try to keep capital spending under control.

Total, Suncor, Shell, BP, Chevron, Statoil and Eni have all cancelled or deferred oil sands and deep sea projects this year.

However, they have rejected the CTI’s analysis of the systemic problems in the sector.

The CTI put the “carbon bubble” concept on the map in March 2012 and it has been steadily gaining traction ever since.

This is the idea that fossil fuel companies are overvalued, because they are not taking account of climate change risk.

The report warned that to put the world on a 2C path, 80% of known fossil fuel reserves had to stay in the ground.

By continuing to explore new and expensive sources of fossil fuels, companies risk creating “stranded assets”. Their investments will become worthless as demand for their product is constrained.

In May, the CTI homed in on the oil sector. It has similar analyses of the coal and gas sectors in the pipeline.

It drew a defensive response from oil companies, with Shell branding the report “alarmist”.

A round-up of oil company arguments by Carbon Brief found they broadly accepted the science of climate change. However, they cast doubt on the likelihood of effective political action to curb emissions and insisted demand for their product would continue.

In a rebuttal to Shell’s assurances, CTI accused the company of “Orwellian doublethink”.

The sector has yet to reconcile the contradiction between its acceptance of the need to tackle climate change and its pursuit of high-risk oil projects, the CTI says.

The post Oil majors gambling US$91bn on 20 high-risk projects appeared first on Climate Home News.

Shell expects fossil fuel demand to rise despite climate dangers

By Megan Darby

Shell was accused of “Orwellian doublethink” in its attitude to climate change on Wednesday, as an influential think-tank published new analysis.

In the latest instalment of the “carbon bubble” debate, the Carbon Tracker Initiative (CTI) highlighted flaws in the oil major’s optimistic assessment of its future profitability.

In a letter to shareholders in May, Shell dismissed as “alarmist” warnings that global action to mitigate climate change could destroy the value of its assets.

Executive vice president JJ Traynor played down the likelihood of effective action to limit global temperature rise to 2C. The company predicts fossil fuel demand will grow 40% to 60% by 2050.

Anthony Hobley, CEO of CTI, said: “With this combative stance, Shell has missed an opportunity to explain to its shareholders how its capital expenditure plans are resilient to the impending energy transition.

“Acknowledging the seriousness of the climate challenge whilst at the same time asserting no effective action will be taken until the end of the century is as classic a case of Orwellian double think as you are likely to find.”

The CTI, in partnership with Energy Transition Advisors, has produced a detailed rebuttal of Shell’s argument. It said Shell had selectively focused on its proven fuel reserves, which are expected to last for 11.5 years at current extraction rates.

The company’s growing portfolio of unconventional and deepwater projects involve higher capital costs, longer lead times and longer payback periods.

Over the next 10 years, the CTI estimates Shell could invest US$ 77 billion in high cost, high risk projects that would need an oil price of US$ 95/barrel to pay off.  These assets are at greater risk of becoming “stranded” by pollution limits, the CTI warned.

While Shell’s assessment mainly focused on today’s energy realities, the CTI said it relied on carbon capture and storage (CCS) as a panacea to allow the continued burning of fossil fuels.

CCS technology is not yet commercially viable and can only extend the global carbon budget by 14% to 2050, according to CTI research.

Climate contradiction

Perhaps most critically, Shell acknowledged the need for urgent action on climate change but based its assurances to shareholders on the expectation world leaders will fail to deliver.

It cited the authoritative International Panel on Climate Change report: “There is a high degree of confidence that global warming will exceed 2 degrees Celsius by the end of the 21st century.” That is the politically accepted safe level of warming.

This quote misrepresents the report, the CTI said, as that is only one stated outcome if no action is taken to reduce carbon emissions. In a direct opposition of Shell’s position, the CTI believes climate regulation is gathering pace.

Mark Fulton, ETA founding partner and advisor to CTI, said: “We believe that by stress testing more aggressively Shell’s future assumptions about demand and climate policy that this will lead to a productive dialogue with investors on capital management and capital discipline in relation to high-price high-carbon investments.”

The post Shell ‘short sighted’ on climate risk – study appeared first on Climate Home News.

Source: Flickr/Cherryl Mari Nadela

By Yvo de Boer

Our world is increasingly crowded, depleted, resource-hungry yet resource-constrained, and starting to experience the consequences of climate change.

Businesses are at the sharp end of these challenges and face considerable commercial risks as a result. At the same time, we rely on businesses to come up with the solutions to our social and environmental problems, even when they may not see the potential to profit greatly from doing so.

Many people, including myself, believe that the current way we measure the value of companies is not fit for purpose in this changing world. We place too much emphasis on short-term financial performance. We pay too little attention to whether or not a company is able to manage risks in the long-term and unlock the opportunities. We ignore the value a company creates or destroys for society as well as its shareholders.

Thankfully company value is not a static concept but a dynamic one. Definitions of value have changed throughout history according to the political, business and societal conditions of the times. For example, the value of the Medici banking empire in fourteenth century Italy was quite different to the value of a modern day bank, and hinged more on its influence in Rome and its ability to navigate politics than it did on the financial returns on investment.

Today, companies are valued in a narrow monetary terms. Short term financial performance, and an obsession with quarterly profits – little else matters.  This blinkered view, popularly known as “quarterly capitalism” arguably fails to incentivise business leaders to build long-term value or to consider the impact of their companies on people and the planet.

However, companies must grasp the substantial opportunities of the green economy and manage risk in what is a rapidly changing world, in order to survive in the long term. Winning businesses will be those who innovate, invest wisely and create long-term value.

Megaforces

The need for a new vision of value is being driven by 10 megaforces that many predict will hit the global economy, society and the bottom line of business much harder than the recent economic crisis.

These 10 megaforces are identified by KPMG International, in its report Expect the Unexpected:

• Climate change, with dire physical impacts and economic losses predicted
• Soaring global population – 8.4 billion in 2030
• Water shortfall of 40% by 2030
• Not enough food
• Increasing energy insecurity and price volatility
• Strain on material resources
• Collapsing ecosystems
• Disappearing forests
• Ever-expanding cities
• Exploding global middle class

These are not future risks; they are impacting now. Some companies are becoming focused on the potential this offers rather than the risks. There are real opportunities to cut costs and increase efficiency; for new partnerships with governments, NGOs, other businesses and to innovate new products and services.

New business model – True Value

The opportunities for business in the green economy are substantial. As always, it will be the companies who move early and strategically who are likely to be the winners in this race.

KPMG member firms have been helping companies place the green economy at the heart of their corporate strategy, not only by strengthening management structures, but by developing the concept of True Value.

True Value takes environmental and social performance into account, as well as financial performance. What happens when the financial cost of the damage companies inflict on the environment is calculated and therefore the impact on the wider economy? What happens when that is subtracted that from their profits?

On a global level, profits would be 87% lower in the electricity sector, 64% lower in mining, and food producers would see profits wiped out more than twice over.  When we factor in social impacts as well, profits fall lower still. But that is only half the story.

Business also creates environmental and social benefits. Benefits such as economic gains from green innovation. Smarter, more efficient, green cities. Healthier, more productive workers. Not to mention the benefits of safeguarding a license to operate by engaging with local communities, respecting the environment and building the trust of governments. What if that value was factored into the valuation of businesses? Then True Value is achieved.

The result is a game changer. Clear incentives for companies to minimize their negative impacts on people and the planet, and maximize their positive impacts. And importantly – True Value can help business adapt and become fit for purpose in the modern business race, where growth opportunities are maximised, and new risks are managed intelligently.

Is this a fantasy? I don’t think so. Business is already moving in this direction as they are being forced to use resources more wisely. There are more commercial opportunities in products and services that address environmental and social challenges. Green regulation is also growing in the form of carbon trading, mandatory sustainability reporting/integrated reporting, human rights principles and green taxes.

Added to this is the increasing scrutiny by stakeholders. People hold companies to account for environmental and social transgressions, and corporate reputations are becoming ever more vulnerable. There is a growing acceptance that current ideas of purely financial value are becoming outdated.

Momentum is building, there is a beginning of an understanding of what True Value should be and why it is important in the 21st century.  We all know that “necessity is the mother of invention”. It is a necessity – not an option – to address the enormous environmental and social challenges the world faces. As such it is also a necessity to assess the True Value of businesses in this context.

Yvo de Boer is the global chairman of Climate Change & Sustainability Services at KPMG, and former executive secretary of the UNFCCC.

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Source: Philippe Berry. IFPRI

By Sophie Yeo

Flows of money towards climate adaptation projects are becoming increasingly unpredictable, making it difficult for vulnerable countries to prepare for the hardships caused by global warming.

Future fundraising tactics would have to be “extremely aggressive” in order to raise enough money to continue their work, according to board members of the UN-run Adaptation Fund, the primary finance provider for adaptation projects around the world.

“We are essentially going with our hands out to everyone,” Philip Weech, the board member from the Bahamas representing the Latin American and Caribbean regions, told RTCC.

“We take funds from anyone, any inch, but the reality of it is the scale of resources we need is hundreds of millions of dollars.”

The Adaptation Fund currently provides money to 34 projects around the world, including over US$ 4million to develop agro-pastoral shade gardens in Djibouti, and over US$ 5million on improving flood management practices in Georgia.

Efforts to tackle climate change have been mainly concentrated on how to prevent it from getting worse by cutting greenhouse gases. But experts now acknowledge that many of the impacts are unavoidable.

The next installment of the UN’s blockbuster climate science report from the IPCC, due out on March 31, is expected to say dangerous impacts are now inevitable, and that climate change will likely reduce median (crop) yields by 0 to 2% per decade for the rest of this century.

Carbon market collapse

Central to the adaptation finance drought is the steep downturn in the carbon markets, which were expected to provide a predictable flow of support to vulnerable countries.

When the Adaptation Fund was established in 2001, it was envisaged that money generated through the sale of carbon credits (CERs) would provide a steady source of revenue, which would support national projects to help countries prepare for the impacts of climate change.

But the price of these CERs, generated by the UN’s Clean Development Mechanism and which companies can buy to offset their emissions, has since crashed, largely as a result of the oversupply of carbon credits within the EU’s emissions trading scheme, leaving the Adaptation Fund foundering.

Now, say board members, they are largely dependent on donations from developed countries to keep their projects running.

At the UN’s annual meeting in Warsaw last year, contributions from rich countries amounted to just over US$100 million – the objective of the Adaptation Fund for that period. But a similar sum will need to be raised this year if the Fund is to be able to continue getting projects off the ground.

At a board meeting being held in Bonn this week, members are considering ten new projects that developing countries have put forward.

Angela Churie-Kallhauge, who represents Sweden on the board, told RTCC that there is still a “very keen interest” from developing country governments in the Fund, despite their financial difficulties.

Predictability

While the Adaptation Fund meets with donor countries every year, such a changeable source of income is “not the ideal solution”, said Weech, who said that in the long term, it was essential to create a predictable stream of finance.

“The fundraising strategy becomes essential by virtue of the fact that the price of CO2 has collapsed. That’s the reality that we continue to face. None of the projections we see in the short term has indicated that the price of CO2 will ever get up to the price we saw three years ago.”

Meanwhile, mounting evidence points to a future where climate-related devastation could become the norm. Adaptation will be key in staving off some of the worst impacts, including flooding as a result of sea level rise and starvation and droughts due to heat waves and changing weather patterns.

Finding the money to fund these actions is a key issue within the UN process to tackle climate change. In 2009, developed countries pledged to deliver US$ 100 billion every year from 2020 to fund both adaptation and mitigation activities.

This will be largely channelled through the Green Climate Fund (GCF), though this is not yet operational, and contains no money.

“It’s not just about the Fund,” says Weech. “It is the overall commitment to finding solutions to adaptation financing. That’s where the challenge is.

“We can talk at great length about the challenge we have with the Fund, but the challenge that faces all of us is finding the resources to deal with adaptation, which is a growing concern in light of the fact that we’re seeing changes we’ve never seen before, completely unprecedented.”

Green Climate Fund

One option being considered by Parties is using the Adaptation Fund as a channel for the money that will eventually be collected by the GCF, as the body already has experience in working in developing countries to put adaptation systems in place.

This is a move that the board members said they would support, as it would maximise “efficiency”, although the decision ultimately lies with the individual parties.

“We don’t want this baby we have created by ourselves disappearing because we have created some concrete things,” said Mamadou Honadia from Burkina Faso, who chairs the board.

“We are the only international body dealing with financing concrete adaptation projects for local communities. We hope that by the end of 2020 the Adaptation Fund will still be alive and continue to provide.”

In light of the importance of the projects and ongoing discussions with potential future donors, Churie-Kallhauge said that there is a sense of optimism “despite the odds”.

“We’re trying to be positive. There are a lot of challenges along the way, but I think we have a good story to tell. We have good experiences with the countries and we’re starting to see good results.”

The post Climate adaptation faces funding crisis warn UN officials appeared first on Climate Home News.

(Pic: Flickr/Wsilver)

By John McGarrity

Japan, the world’s biggest funder of coal-fired power stations, is coming under increasing pressure to withdraw from funding a sector viewed as the primary cause of climate change.

Washington-based observers say US government has asked Japan and the Japan Bank for International Cooperation to slash coal-related lending to developing countries that are likely to join China by ‘locking in’ carbon emissions by using the fuel to power fast economic growth.

“Our contacts in the administration have told us they’ve already had high level meetings with staff at JBIC and relevant ministries to discuss overseas coal finance restrictions. Those negotiations are ongoing but they see Japan as one of the key countries they’ll be lobbying to do something about this issue,” said Justin Guay of the green group Sierra Club, which lobbies against coal-fired power.

The International Energy Agency (IEA) says that in 2010, 43% of carbon dioxide emissions from fuel combustion were produced from coal.

Lead investor

JBIC is the largest single provider of funding to new coal-fired power stations in developing countries, according to research from the National Resources Defence Council, a US environmental group, meaning that inaction would blunt US efforts to slow the development of coal-fired power worldwide.

However an official with the Japanese bank said no US or other multilateral institutions had asked it to stop financing coal.

The Overseas Private Investment Corporation, which is part of the U.S. government, said it couldn’t comment whether it or any other department is holding  discussions with Japan.

According to NRDC figures Japan’s largest development bank has funnelled $12 billion to coal-fired power stations between 2007 and 2013, helping to fulfil its mission to expand export markets for large companies.

Conglomerates such as Toshiba and Hitachi are been major beneficiaries of Japan’s funding of coal fired power stations in countries such as Indonesia, Thailand and Vietnam, and JBIC says these companies only install the most efficient coal-fired technology in countries that have few other alternatives than to use the fossil fuel.

But while the newest plants that use so-called “supercritical” technology get more out of the same amount of coal, plans by developing countries to build hundreds of new coal-fired power stations would make it even more difficult for countries to prevent runaway climate change.

Observers say Japan has become increasingly isolated by continuing to fund coal-fired power, particularly as the US government last year said that multilateral financial institutions should limit its exposure to the fuel.

Institutions such as the World Bank, the US Export-Import Bank, the European Investment Bank, and the European Bank for Reconstruction and Development have all said in the last year that they would scale back involvement in the sector.

Meanwhile many private sector banks have also ditched investment in mines and power stations against the backdrop of increased shareholder activism in the US and growing doubts that coal-fired power plants will make big profits during their lifetime, estimated at 30-40 years.

Regulation

Although coal has long been cheaper to generate power in developing countries than renewables and gas, the prospect of cheaper solar panels and wind turbines, increased supply of gas, tighter air quality standards and higher carbon prices could make the sector less economic in future decades.

But even if JBIC was to scale back financing for coal, other institutions would need to follow suit for a global ‘divestment’ campaign to be effective.

Germany, Russia and South Korea are also large funders of coal-fired power stations, NRDC figures for 2013 show, while Chinese and Indian companies have a huge warchest to finance new mines and coal terminals.

Japan is a major consumer of coal at home too, and increased the use of the fuel last year to compensate for the continued closure of nuclear power stations after the 2011 earthquake, tsunami and nuclear disaster at Fukushima.

Yesterday Japan’s government said in a draft energy plan that nuclear plants meeting new safety standards set after 2011 should be reopened, and accelerate the use of renewable energy.

The post Japan continues to fund coal despite increasing US pressure appeared first on Climate Home News.

Source: Flickr/pmwebphotos

By Sophie Yeo

Canada makes no mention of climate change in its 427-page budget for 2014, in another sign of the country’s dwindling interest in environmental protection.

The budget, which was released to little fanfare during the Winter Olympics in Sochi, has invited accusations that Canada’s Conservative government has prioritised winning votes at the next election over the transition to a low-carbon economy.

The country’s interest in tackling climate change has declined since Prime Minister Stephen Harper’s Conservative government came to power in 2006.

Three years ago, Canada withdrew from the world’s only legally binding climate deal the Kyoto Protocol.

And at recent UN climate talks in Warsaw the government released a statement praising Australia’s new government for its efforts to repeal the country’s nascent carbon tax.

Last April the Harper government also pulled out of the UN’s desertification body, a move that caused a former UK diplomat to tell RTCC “they make [George W] Bush look like a treehugger.”

Partisanship

Opposition MP David McGuinty from the Liberal Party told RTCC that climate change has become a victim of a “cold, hard, crass political calculation” to win more votes at the 2015 General Election.

“The notion that climate change ought to be seen without partisanship, that it ought to be treated as a continuing brief that any government irrespective of political stripe must continue to make progress on, that is not registering with Mr Harper and his regime,” he said.

The government has completed a dramatic U-turn on domestic climate change spending since 2007, when the federal budget allocated $1.5 billion of new funding for clean energy and new technology in the provinces of the country.

In the 2012 budget, an advisoty body called the ‘National Round Table on the Environment and the Economy’ was completely abolished as part of $19.5 million cutback on Canada’s Environment Ministry.

By the time this budget was completed McGuinty said there was “nothing left to eliminate”.

Fossil fuel growth

Together with cutting climate policies, the budget boosts investments in the country’s oil and gas industries.

Under a chapter entitled ‘Responsible Resource Development’, the 2014 budget proposes spending $28 million on a review project that could speed up the construction of another crude oil pipeline.

Bruce Hyer, deputy leader of Canada’s Green Party, told RTCC that “nothing would surprise” him anymore regarding the elimination of environmental policies from the portfolio of Harper’s government.

“They’re the government of Big Oil,” he said, adding that Harper is “still hopeful” that President Barack Obama will approve the Keystone XL Pipeline, which will transport unrefined oil from Canada’s tar sands to the US Gulf Coast.

Many environmentalists are deeply opposed to this project because of the high carbon footprint of extracting oil from the sands and its subsequent use.

RTCC called Environment Canada for its response but the department has yet to respond to requests for comment.

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By Nilima Choudhury

The European Bank for Reconstruction and Development (EBRD) has approved a five-year strategy to limit financing coal projects and increase investment in clean technology and energy efficiency.

The multilateral development bank will limit financing coal fired power generation projects to “rare and exceptional circumstances in which there is no feasible alternative energy source.”

“We cannot use carbon without having a thought about what the impact of climate change is going to be,” EBRD managing director for energy and natural resources, Riccardo Puliti told Bloomberg. “There is a climate-change problem, and there are actions to be undertaken in order to solve it.”

Since 2006 the bank has invested $8.6 billion in energy and power projects, of which $2.75 billion has been directed to renewables and $717m towards coal.

The EBRD joins other financial institutions like the World Bank and the European Investment Bank and the US, UK and Norway in cutting spending on coal plants, which collectively are the largest single source of greenhouse gas emissions.

Growing trend

Campaign groups like WWF welcomed EBRD’s strategy saying the time is ripe for other public financial institutions, in particular multilateral development banks, to follow suit immediately and shape the world’s shift to energy savings and sustainable energy.

“The move by the EBRD is positive, but to have a serious chance of keeping global warming below 2°C, the EBRD needs to strengthen its standards and eventually phase out its support for all power supply based on fossil fuels,” Sebastien Godinot, an economist at WWF’s European Policy Office said.

In the past the bank has stressed coal is a small part of its overall funding strategy.

“It is actually a small part (about seven projects over the last seven years) of our activities in this sector and for most of our countries of operation it simply isn’t an issue,” a spokesperson told RTCC recently.

“By comparison we financed around 57 renewable energy projects in the same period for a value of approximately €2 billion and renewable financing is by far the fastest growing segment of our activity in the power sector.

We have also done a lot of less glamorous work in areas such as smart grids and energy efficiency more generally. This doesn’t get the headlines in the same way but there are huge opportunities here to improve efficiency and this is really our bread and butter work.”

EBRD’s first test will come in the form of a new 600MW lignite plant project in Kosovo which the bank may be asked to co-finance.

“In the coming months, we will be closely monitoring how the EBRD is implementing its new ‘anti-coal policy’ and if the Bank actually walks the talk,” Godinot added.

“The Bank must stand firm on its ‘anti-coal policy’ and support clean alternatives for Kosovo and elsewhere.”

VIDEO: Heffa Schücking, CEE Bankwatch Network on the role banks play in financing coal production. 

The post Coal blow as major European bank cuts funding appeared first on Climate Home News.

Source: connect.euranet

EU: The European Union (EU)’s climate action commissioner Connie Hedegaard on Tuesday called for concerted global action to cut excessive greenhouse gas emissions, after a UN report warned that the world could fail on the goal of containing global warming within two degrees Celsius. (Xinhua)

China: China’s corn harvest is poised to decline for the first time in four years after flooding in its biggest-producing province and drought in its fifth largest cut yields, easing a global glut as the U.S. reaps a record crop. (Bloomberg)

Norway: Norway’s Sovereign Wealth Fund could soon become the largest institutional investor to date to ditch coal investments, after the opposition Labour Party called on the new government to reform the $800bn fund’s lending policies. (Business Green)

China: Ahead of a number of key meetings on climate change, China Tuesday asked developed nations to pay their committed amounts to finance efforts to combat global warming. Developed nations should promise to inject funds of no less than the fast-start funding between 2013 and 2015, Xie Zhenhua, China’s top climate change official and deputy head of the National Development and Reform Commission (NDRC) told a media conference here Tuesday. (Zee News)

UN: Global efforts to prevent dangerous levels of climate change are on course to fail, says a UN report released today. The UN Environment Programme says current pledges to reduce emissions are inadequate, and likely to see options to limit warming to 2C above pre-industrial levels fade by 2020. (RTCC)

Australia: Food and grocery prices may not fall when the carbon tax is repealed and struggling food manufacturers could be forced to continue to pay the tax in their power bills for 18 months after compensation schemes offered by the former Labor government had been abolished. (Guardian)

EU: The European Union presented a set of recommendations for governments to improve their state-aid mechanisms in energy markets, including support programs for renewable energy. (Bloomberg)

South Africa: Going green, reducing carbon-footprints and pledging commitment to the Kyoto Protocol are top of the agenda at next week’s UN Conference on Climate Change, COP19 in Warsaw. South Africa’s department of Environmental Affairs’ Maesela Kekana says, “From the South African perspective COP19, we believe that it should be an implementation COP. You would recall that we took a number of decisions starting from Copenhagen up to Doha. So this is the time to show real implementation on the ground.” (SABC)

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(Pic: US Navy)

By Nilima Choudhury

The growing Islamic finance sector could spell good news for investments in clean energy according to experts RTCC has spoken to.

Islamic finance is growing 50% faster than the traditional banking sector, and it has huge growth potential, with assets expected to increase by 250% this year.

Its profile was boosted last week when UK Prime Minister David Cameron told the World Islamic Economic Forum he wanted the country to be the “first western sovereign to issue an Islamic bond”.

In an interview with RTCC, Professor Habib Ahmed, a World Bank author and Professor in Islamic law and finance at the University of Durham said the principles and values on which Islamic finance is based could contribute to sustainable economic development.

“There is an increasing demand from different stakeholders that Islamic finance should also reflect the ethical, social and environmental aspects in their financing,” he said.

“Many non-Muslims are attracted to Islamic finance because they find it sound from economic and ethical perspectives.”

This could be positive news for the clean energy sector that in 2012 suffered a 14% drop in investment as Europe curbed green subsidies and the USA’s attention was diverted from renewables to fracking.

Last month analysts at Bloomberg New Energy Finance reported that annual investment in renewables and energy-smart technologies will fall for the second consecutive year.

Emerging sector

There are already signs the clean-tech sector is starting to benefit from Islamic finance.

The Islamic Development Bank (IsDB) is already a major player in the clean energy sector investments of around $1 billion between 2010-2012.

The top five beneficiary countries of IsDB’s renewable energy sector financing were Morocco ($908 million), Pakistan ($896 million), Egypt ($886 million), Tunisia ($764 million) and Syria ($668 million).

Last month the IsDB agreed a $100 million investment with the Industrial Development Bank of Turkey for the development of renewable energy and energy efficiency projects.

On a wider scale, a report by  Ernst & Young published in December 2012 valued Islamic assets at about $1.8 trillion in 2011, representing about 1% of the global financial market.

Green shoots 

Some analysts believe Islamic finance will be good for the environment because it values more than just profits.

Western banks are required by law to provide the best return on investment for their clients regardless of where that investment goes.

But according to Asad Zaman from the International Institute of Islamic Economics in Pakistan, while green growth in the west is secondary to economic growth, this is not the case in Islamic financial circles.

“Natural resources are a sacred trust and protecting them for future generations a primary responsibility,” he said.

“Economic growth is not (directly) a goal at all, though it may be desirable as a means to (say) poverty alleviation.”

It’s a view shared by the heir to the British throne Prince Charles, who recently said Islamic banking could provide the answers where conventional banking could not, given Islam’s emphasis on a “moral economy”.

Where large Western banks have divested from oil and gas, it has generally taken place not because of ‘green’ reasons, but as a result of long term investment planning.

“Scottish Widows divested from these [fossil fuel] companies not on ethical grounds but because we think they’re not a very good investment decision. That view is shared very widely in the investment community,” said the bank’s head of sustainability Craig Mackenzie.

New investment model

The Islamic financial structure is so attractive that the UK Treasury is now investing about £200 million to work on the practicalities of issuing “sukuk”, or Islamic law compliant bonds in the country.

Sukuk bonds do not pay interest, but instead offers the investor a share of ownership in the project they are supporting.

In order to develop an environmentally friendly sector financed by Islamic banks, the Green Sukuk Working Group was launched last year by think tanks Climate Bonds Initiative, NGO Clean Energy Business Council of the Middle East and North Africa and the Gulf Bond & Sukuk Association.

“Interest in both Shari’ah compliant and ethical investing is on the rise. Green sukuks can support this trend by expanding the range of available financial instruments,” said the GBSA’s Michael Grifferty at the group’s launch.

“Green sukuks also support national development strategies by offering longer term finance for essential infrastructure.”

The group aims to develop best practices and promote the issuance of sukuks for the financing of climate change investments and projects, such as renewable energy projects.

Banks like UK-based Islamic investment bank Gatehouse Bank offer people the opportunity to invest in sustainable companies that offer technology, products and services throughout the water industry to help with water desalination, a burgeoning sector in the Middle East.

According to Professor Ahmed, the Islamic financial sector’s growth is likely to continue because it has proven to withstand events like the 2008 global financial crisis.

“After the crisis, Islamic finance came to light because it had features that would have lessened the intensity of the crisis,” he said.

Social responsibility

A paper published in July this year by the International Institute for Sustainable Development (IISD) argues that increasing levels of debt in the ‘West’ will make Islamic banking a safer bet for many investors.

“Islamic finance principles serve to insulate the Islamic financial system from excessive leverage, speculation and uncertainty, which in turn contributes toward promoting financial stability and long-term sustainability,” the authors say.

“As a result, the implementation of Islamic finance principles is anticipated to grow, not only in Muslim countries’ financial markets, but also in those markets concerned with socially responsible objectives and ethical financial solutions.”

Muhammad bin Ibrahim, the Central Bank of Malaysia’s deputy governor, argued earlier this month that it was an Islamic bank’s duty to “enhance the general welfare of society.”

“The teachings of Islam basically promote preservation of natural resources and the need to respect all living things. Failure to do so would be detrimental…where severe destruction of the land and sea would come upon those who mistreat the environment,” said Ibrahim.

There are, of course, plenty of examples of Islamic banks lending to oil and gas companies. Money based in Saudi Arabia and Qatar is, in all likelihood, derived from the extraction of fossil fuels.

But the rapid growth of a financial sector underpinned with strong ethical and environmental leanings indicates that the damage investments may do to the planet may come under increasing scrutiny.

Ahmed argues that currently there is little sign of a “green” culture in the Islamic financial sector, perhaps not a surprise given its relatively small size.

But he says there is a debate among bankers over what the sector’s role should be moving forward, and how it can be a force for the global good.

“As the industry moves forward it will be expected that they consider social and environmental issues as the values on which Islamic finance is based on [these] demands,” he said.

The post Is the rise of Islamic finance good news for the environment? appeared first on Climate Home News.

By Sophie Yeo

Prince Charles has encouraged pension fund industry to plan for the long term with their investments, taking into account the “gathering storm” of climate change, over consumption and financial indebtedness.

Speaking to the National Association of Pension Funds, the heir to the British throne said that the investors have a need, and arguably a duty, to ensure that emerging environmental, social and economic risks are identified and managed.

He said: “With an ageing population, and pension fund liabilities that are therefore stretching out for many decades, surely the current focus on ‘quarterly capitalism’ is becoming increasingly unfit for purpose?”

He added that a focus on sustainability eventually yielded up better long term returns, citing studies from Harvard and London Business Schools – “So you can have your cake and eat it!”

“I know that old habits die hard and that it is difficult to make the first move, but is there not a case for ensuring your portfolios are resilient in the long-term?” he said.

“Could you do so by incorporating sustainability into your mainstream strategy, rather than having it sit in a subordinate silo?

“Moreover, by contributing to the long term sustainability of Nature’s economy (in other words the maintenance of vital ecosystem services, on which the durability of our own economy ultimately depends), pension funds can help to preserve the real value of beneficiaries’ retirement income.

“Ladies and Gentlemen, your sector plays a very significant role indeed in how our economic system works, both now and in the future.  So it really does fall to you, I am afraid, to help shape a system designed for the twenty-first and not the nineteenth century.

“Which is why I can only urge you to deploy your considerable human ingenuity to make that innovative and imaginative leap that the world so badly needs – otherwise your grandchildren and mine, for that matter will be consigned to an exceptionally miserable future.”

Prince Charles has previously made similar comments on the need to adopt a more sustainable attitude to finance, and has set up an Accounting for Sustainability project to further the aim of creating a more sustainable and resilient economy.

Seb Beloe, head of sustainability research at WHEB Asset Management, told RTCC: “While Prince Charles is obviously not a regular commentator on the issues to do with investment and pension funds, his position brings this question much more visibly forward to the pension funds and indeed the mainstream financial press, so I think it’s a very helpful intervention.

“It raises the question for people, because for the vast majority of the general public as retail investors or beneficiaries of pension funds, it’s just not a question that has ever even occurred to them.

“This is a transition, and I think people will get there, and I think the fact that the Prince of Wales is making these connections is another step towards that objective.”

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(Pic: David Clarke)

Australia: After abolishing the Climate Change Commission, the newly elected Abbott government wants to scrap the Clean Energy Finance Corporation (CEFC) set up by Labor to provide loans for renewable energy and efficiency. Treasurer Joe Hockey wrote to the CEFC, asking it to stop investments until its repeal. However, independent legal advice backed by one of the country’s top constitutional lawyers says the CEFC is legally obliged to ignore the minister’s request. (ABC)

US: Delegates to the 2013 International Women’s Earth and Climate Initiative Summit, which took place this week sent a letter to President Barack Obama this week calling on President Obama to reject the Keystone XL pipeline. They wrote that ignoring climate change is like sending “a child with a 105 fever” to school. (Think Progress)

Research: Genetic modification of animals so that they can deal with changing climate and habitats may be the only way to save some of the most endangered species from becoming extinct, according to biologists at Idaho State University in Pocatello, and his colleagues in a comment article for the journal Nature. (Guardian)

Germany: Angela Merkel’s experiment to wean Europe’s biggest economy off nuclear and fossil fuels and push it into renewables is at risk and her best hope of saving her bold energy revolution may lie in a coalition with the center-left Social Democrats, who could agree to modest cuts to costly incentives for green power which are, paradoxically, driving up energy prices. (Global Post)

ICAO: United Nations aviation chiefs said Tuesday that thorny issues still loom heading into two weeks of negotiations aimed at finalising a deal to address greenhouse gas emissions from the global aviation sector. The UN’s International Civil Aviation Organization is attempting to iron out one of the worst aviation disputes in years, which has pitted the EU against its trade rivals. (Planet Ark)

Mexico: Latin America is likely to see more floods like those wreaking havoc in Mexico, as the effects of climate change make themselves felt. Already highly vulnerable to natural hazards, the region will be one of the most affected by increased flooding and droughts, reduced arable lands and the possible loss of low lying regions caused by climate change said Ede Ijjasz-Vasquez, World Bank director for sustainable development. (Eco Business)

Research: There is a chance that the world can keep below dangerous levels of global warming, said co-chair of the UN’s climate science panel Thomas Stocker on Monday. Opening a weeklong conference in Stockholm, where the IPCC report will be scrutinised by governments and policymakers, Stocker said that the world still had a choice in whether to avoid climate-related catastrophe. (RTCC)

Research: Economists are partly to blame for the vacillations that have stopped climate policy from moving forward quickly enough, said Lord Stern at the Royal Society on Tuesday. (RTCC)

Research: Europe’s largest solar energy research centre Fraunhofer ISE, Soitec, which manufactures the cells, and research organisations CEA-Leti and the Helmholtz Center Berlin measured a new world record efficiency of 44.7%. (RTCC)

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If the London Stock Exchange continues to finance fossil fuels, it could lead to both economic and environmental disaster

By Sophie Yeo

Of all the bubbly drinks the attendees at today’s London Stock Exchange AGM might hope to receive, a bottle of “carbon bubbles” probably isn’t one of them.

Yet this is what campaigners will be handing out to shareholders attending the meeting, in an attempt to convince them to move away from financing fossil fuels.

The bottles are meant to represent the idea of the economic “carbon bubble” that will hit markets as fossil fuels become worthless.

A report released by the Climate Tracker Initiative last April said that, while the earth currently harbours 2,860 billion tonnes of indicated fossil fuel reserves, only 31% of this can be burnt if global temperatures are going to be kept below 2°C. This means that 69% of fossil fuel assets could be worthless.

According to Ted Franks from investment managers WHEB, the London Stock Exchange has 84 tonnes of potential CO2 for every $1,000 of market capitalisation. “This makes it the second most carbon-intensive stock exchange in the world, after Moscow,” he writes.

Labels on the bottles, handed out by activists from the World Development Movement, will inform the shareholders that, “The ‘carbon bubble’ is the amount of CO₂ that would be released if all known fossil fuel reserves were extracted and burnt.

“Just 30 companies listed on the London Stock Exchange hold more of this unburned carbon than the CO₂ emissions of the whole world for the past six years. Burning these reserves would make catastrophic climate change a certainty.”

Campaigner Kirsty Wright said: “The vast majority of the fossil fuels for which shares are listed on the London Stock Exchange simply cannot be burned. Failing to address this now can lead us down only two paths – a climate-related financial crisis, or complete planetary meltdown. In order to avoid climate chaos, we have to keep most of the coal, oil and gas we know about in the ground.”

There are currently no plans to discuss the problem of a carbon bubble at today’s meeting.

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If the conversation on equity and overall tone of discussions at last week’s UN climate change talks in Bonn was a pleasant surprise, other aspects of the negotiations remained uninspiring.

It’s clear that unless developed countries make concrete commitments to meet their ethical and legal obligations to provide climate finance, progress in these talks will be difficult at best.

Finance is required to help developing countries adapt to current and future climate impacts and transition to low-emissions development pathways.

Yet finance was barely discussed in any meaningful way in Bonn – as one commentator put it, it was “the elephant that’s not even in the room.”

Kiribati needs funds to invest in projects such as this mangrove plantation, aimed at preventing coastal erosion

After the Fast Start Finance period ended in 2012, no further collective climate finance commitments have been made.

It’s completely unclear how developed countries will scale up to meet their goal of $100 billion per year by 2020, and in fact it appears quite possible that climate finance totals may actually decrease from Fast Start Finance levels – $10bn annually – in the next few years.

This lack of finance would be particularly devastating for vulnerable communities in developing countries, which have the least capacity to cope with increasingly severe climate impacts – impacts that are happening now, not waiting until 2020.

The structure of the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) negotiating track is such that climate finance for immediate adaptation needs is orphaned out of the process: ADP Workstream 1 focuses on the 2015 agreement that will create a new climate regime starting in 2020, and Workstream 2 focuses on pre-2020 mitigation.

Pledge drought

This might be less of a problem if concrete commitments for short-term finance were made at COP18 in Doha – but instead, Doha saw a conspicuous lack of such commitments despite the ending of the Fast Start Finance period.

As a result, developing countries are left with the likelihood that badly needed adaptation and mitigation programs will remain unfunded, and there is no predictability in finance that might enable these countries to create well-planned responses to the challenges posed by climate change.

There are some conversations about climate finance happening in venues outside the formal UNFCCC negotiating tracks, but unfortunately these have largely focused on how public funds might be used to leverage private investment that could then be counted towards developed countries’ obligations.

Civil society groups, including ActionAid, believe the full $100 billion should be public money provided on a grant basis, in line with “polluter pays” principles – and this is particularly important for adaptation needs, which are unlikely to be attractive to private investment seeking short-term profits.

Civil society groups, multilateral institutions and various government agencies have come up with all sorts of ideas to generate large sums of public funds for climate finance, including financial transactions taxes, redirection of fossil fuel subsidies, closure of corporate tax loopholes, levies on emissions from the international shipping and aviation sectors, use of IMF Special Drawing Rights, and more.

The political focus on private finance should be redirected towards implementing some of these “innovative sources” of public money, which could serve the needs of the most vulnerable in a way that private investment could not.

Time to commit

Next month in Bonn and at COP19 in Warsaw this November, there are at least two steps developed countries could take to build trust and good will in the negotiating process and begin addressing climate change in the immediate short-term.

These countries should productively engage in the equity conversation, as they did last week in Bonn, and agree to an effort-sharing arrangement that acknowledges core principles of fairness including historical responsibility.

In the short term, they should also put their money where their mouth is, backing up the pledges they have made on climate finance, which is desperately needed for urgent adaptation needs, with actual commitments of public finance.

We should always keep in mind that if we fail to respond to climate change in time, with deep emissions reductions and adequate, predictable climate finance, permanent climate-induced loss and damage will increase to unimaginable proportions.

Without urgent action – which developed countries have the responsibility and capacity to lead – we will not be able to avoid irreversible loss of life, land, biodiversity and even, in the words of one presenter at a workshop last week, “a breakdown of national and international order.”

In the midst of complex negotiating processes like the UNFCCC, the stark reality of the scale of what is needed to fix the climate crisis is something we can’t afford to forget.

Brandon Wu is a Senior Policy Analyst at ActionAid, specializing in Climate Finance. Follow him on Twitter @Brandoncwu

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Last year’s natural disaster racked up an estimated $160bn worth of damages, according to the world’s largest reinsurance firm Munich Re.

Hurricane Sandy was the single costliest event at $50bn in what was a fairly mild year for the insurance industry. Losses in 2011 were $400bn.

While it is hard to directly link one specific event to climate change, rising sea levels exacerbated the effects of Sandy’s flooding. Water in the East Coast’s harbours is 15 inches higher than in 1880 and warmer air and sea temperatures encourage greater storminess and so extreme weather.

Flooding from Hurricane Sandy’s storm surge stretched hundreds of kilometres along the east coast of the US. (Source: Flickr/Jim.Greenhill)

“The heavy losses caused by weather-related natural catastrophes in the USA showed that greater loss-prevention efforts are needed,” said Torsten Jeworrek, Munich Re board member.

“It would certainly be possible to protect conurbations like New York better from the effects of storm surges. Such action would make economic sense and insurers could also reflect the reduced exposure in their pricing.”

There are calls for great levels of financial support for climate adaptation from the private sector. Reducing emissions provides more obvious routes to making money from climate change investment leaving preparedness and risk reduction further down the priority list.

Agriculture

The US also witnessed a drought only beaten for severity by the Dust Bowl years of the 1930s.

Total agricultural losses were $20bn with the additional human costs expected later this year as the knock on effect of high food prices takes hold.

Preparing farmers for climate change in both the developed and the developing worlds is one of the core strategies to protect food security as weather patterns become increasingly variable.

“The [developing world] farmers are on the forefront of climate change and are very worried about the outcomes for their farms and livelihoods,” said Bruce Campbell, director of Climate Change, Agriculture and Food Security (CCAFS) program at the CGIAR agricultural research consortium.

“Farmers are actively trying to counter climate-induced problems – for example by diversifying, changing planting dates, and switching to less susceptible crops or livestock. However, their options are often limited because of weak markets, lack of advice and lack of policy support,” Campbell told RTCC.

While better information can help farmers to make the right choices, Campbell believes there is role for financial mechanisms to support developing country farmers.

“There are some very promising innovations. One of these is index-based insurance – millions of farmers are now covered by these schemes in India and there are smaller schemes in many countries in Africa. Insurance protects farm and livelihood assets – if extreme events eat into assets then it is a downward spiral for livelihoods,” he said.

Loss and damage

A potential new regime of climate finance was initiated at the UN climate change talks in Doha. Loss and damage would come into play after adaptation efforts have failed.

Although still very much in the early stages, it is thought that those countries with a historical responsibility for climate change would contribute to a fund to absorb some of the losses felt in developing nations.

Based on the figures released by Munich Re, loss and damage costs far outstrip the recent climate finance payments of around $10bn a year.

2012 Natural Disasters – Biggest Economic Losses 

Hurricane Sandy $50bn

US drought/agriculture $20bn

Italian earthquakes $16bn

US tornadoes $5bn

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The world’s largest investment funds are ignoring climate change and guilty of greenwash, according to a new report.

The first ever Index published by the Asset Owner’s Disclosure Project (AODP) found that a third of the 314 funds it received data from had no information available on what they were doing to account for climate change in their investments.

Many of those that did have public information on climate change, could not demonstrate that these claims had been transferred to their investment decisions, leaving the report to conclude that these were simply “greenwash”.

The AODP report scored one third of the funds it assessed a zero for a failure to make low carbon investments and to account for climate change risk. (Flickr/©John B G)

Those questioned include some of the world’s largest pensions funds, sovereign wealth funds and insurance firms, many holding the savings of regular citizens.

“We applaud the efforts of the leaders but even many of those provide scant information to us as stakeholders to allow us to see how they are managing our future,” said Sharan Burrow, AODP board member and General Secretary of the International Trade Union Confederation (ITUC).

“As for the laggards, working people should expect more from the people who they have trusted with their retirement savings to manage the long term. These funds need to wake up to the scale of climate risk but also members need to start applying pressure to drive the change,” she added.

The index assessed a number of criteria including the funds’ scale of low carbon investment, their transparency and the level of risk management assigned to climate issues.

Funds are required to protect the assets of their investors under “fiduciary duty”.

More progressive coalitions of investors, such as the International Investor’s Group on Climate Change (IIGCC), have publicly stated that to ignore climate risk, is to breach this trust with those whose money is under management.

AODP asked 1000 funds, worth $60 trillion, to take part with the 314 respondents representing 64 different countries.

The full index and the accompanying report are available on the AODP website.

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Ever since the Copenhagen “grand bargain” on climate finance the issue has featured prominently on the political agenda. Yet, on the eve of Doha, the role of climate finance in building trust and instilling confidence seems fragile.

As the 2009-2012 Fast Start Finance (FSF) period draws to an end, developing countries are asking what funds will be available from 2013 to support actions that they are progressing at the national level? Seyni Nafo of Mali, spokesperson for African Group, has said that in Doha they need more than “an indication that funding will not fall off a cliff“.

Whether motivated by the promise of climate finance or driven by the realisation of the need for and benefits of actions to tackle climate change, post-Copenhagen developing countries are coming forward with nationally defined strategies, policies and actions. Climate finance would help accelerate and scale-up these actions.

Last week at a meeting in Costa Rica, I was struck by the level of political leadership within the region for tackling climate change. Chile, Colombia, Costa Rica, Mexico and Peru set out steps they are taking to strengthen national institutional arrangements and policies for scaling up low carbon investment. Decision-makers from the energy, transport, agriculture and crucially Finance and Planning Ministries, are now coming together around how to make most effective use of climate finance.

Ministers must put pledges, or at least timelines for future climate finance commitments, on the table in Doha to build trust and keep momentum for the 2020 deal rolling. (Source: Flickr/UNFCCC)

Governments in Asia also lead the way on creating enabling environments for climate finance. Earlier this week, at the OECD, I learnt how Indonesia’s Ministry of Finance are integrating mitigation costs within their national budget process.

As they develop a Mitigation Fiscal Framework they are identifying the most cost-effective mitigation options, implications for the national budget and the policies that can best incentivise investment by the private sector. Subsequently, the Government is building a more comprehensive approach toward ensuring different sources of finance best complement each other. I believe that such approaches will be necessary for maximising the transformational impact of climate finance.

At the same time, countries that are particularly vulnerable to the impacts of climate change are also working to build their adaptive capacity to create the enabling environments for the implementation of adaptation plans and measures that will be required to increase the resilience of their future development.

So now that developing countries are investing in their institutions  for scaling up climate finance at the national level, a question on everyone’s mind is how developed countries are faring in their commitment for increasing finance towards the 2020 goal for mobilising $100bn/year.

Trouble at home

And this brings me to the bad news. Whether it is the sovereign debt crises in the euro zone, the fiscal cliff in the US, or prospects of negative GDP growth or flat-lining economies, the domestic situation in many of the FSF countries provides a gloomy backdrop for Doha.

At last week’s meeting of European Finance Ministers new pledges for 2013 were on the table – 15 Ministers were noticeable by their absence. Whilst disappointing, this should not limit EU Ministers from renewing their political commitment to the $100bn/year by 2020 nor should it tie the hands of negotiators from taking a constructive approach required to establish the rules and norms that would need to underpin this.

There are glimmers of hope that post-Obama’s re-election the US will start to show the leadership on climate action that has long been necessary. Readdressing the administration’s poor track-record in appropriation of climate finance will need to be part of that. Whilst new US pledges in Doha seem unlikely, US negotiators efforts towards realising the commitment that was made by Obama in 2009 for mobilising $100bn a year by 2020 will be key.

Ministers that are in a position to make pledges in Doha should also commit to channelling these through the Green Climate Fund (GCF) once it becomes operational. The prospect of countries beyond those that have provided FSF to come forward with pledges of funding in Doha is a promising one.

All eyes are on Qatar the COP hosts, who could, perhaps jointly with the South Korea as hosts of the GCF and Mexico which delivered the agreement to the GCF in Cancun could rally others from within their regions to pledge climate finance for the less developed and particularly vulnerable countries.

Momentum for a global deal

Putting aside financial pledges, Doha must also maintain momentum towards a 2015 agreement on a new legally-binding outcome for all. Given the importance of climate finance in building trust amongst countries Ministers arriving in Doha must signal a renewed political commitment around finance in the as one element of an ambitious 2015 deal. In this context there are several fronts on which climate finance can be progressed:

First, after a slow start, the GCF Board is now gearing up to make some key decisions on the funds business model, modes of access, and the private sector window. South Korea should be endorsed as the host country, and funding for the administrative functions of the Secretariat are coming forward.

Some Governments are increasing support for developing countries to prepare their “readiness” for climate finance. These welcome steps can be reinforced by Ministers, potentially coming together as “Friends of the GCF” to agree on sufficient resources are in place for the effective functioning of the GCF and for assisting countries with actions that will enable them to access the fund when operational.

Governments without a mandate for pledges in Doha should collectively announce a date by which they will do so in 2013.

Second, is the need to address the ad hoc reporting arrangements characterising FSF which has undermined trust amongst the less developed countries who point out that most funding has gone to support mitigation in a handful of sectors of middle income countries.

Countries will need to agree on how to ensure the transparency and accountability of climate finance. It is likely that developed countries entering into a second commitment period of the Kyoto Protocol will require reciprocal agreement for transparency and accountability of emissions reductions by those outside the Kyoto track.

Third, is the need to elevate the profile of adaptation finance. A recent report for the World Bank highlights some shocking implications of the 4 degree temperature rise likely under current trends.

The report urges “further mitigation action as the best insurance against an uncertain future.” Yet, the climate risks portrayed underscore the urgency for increasing resources to support the poorest and most vulnerable countries with measures for resilience to climate impacts.

In Doha Minsters should come together and commit to do more on adaptation finance and agree to the proposed mechanism on loss and damage.

Keeping the cash flowing

Lastly, but perhaps of greatest significance for climate finance in Doha, will be the response of countries to the co-chairs report on Long Term Finance (LTF).

The report neatly distinguishes between the need for a high-level political focus on sources and options for mobilising finance in the short, medium and long-terms, and more technical work that now needs to progress under various UNFCCC bodies.

At the Cape Town workshop that I presented at the co-chairs concluded by emphasising that the 2012 LTF work programme had been a journey rather than an end point.

I believe that the level of support by countries for the recommendations of the LTF Co-chairs, so that the political and the technical issues on climate finance proceed in parallel whilst also informing on-going work of the Durban Platform, could prove to be a bellwether for success in 2015.

Governments that want Doha to provide momentum for the journey towards a new legally-binding agreement by 2015 will do well to endorse these recommendations with a minimum of fuss. Let’s see if this proves to be the case.

Amal-Lee Amin leads the International Climate Finance Programme at the consultancy E3G.

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Countries must tackle the mistrust surrounding forest finance to ensure the success of REDD+, a leading forest conservationist has warned.

Andrew Mitchell, Executive Director of the Global Canopy Programme, the organisation behind The Little Forest Finance Book, told RTCC that the complexity of the language used when talking about forest finance has created a culture of fear and doubt in developing countries.

He warned that this is holding back the UN’s REDD+ scheme.

“The problem is that there are very different languages that people use at every part of the supply chain from forests to finance,” he said. “If you are a forest chief you think very differently than if you are a boardroom chief in a big ivory tower in London.

“In many countries I go to, if you talk to [forest] ranchers or people in the government they say ‘oh we don’t want anything to do with these capitalists and these carbon cowboys that come around. They are going to rip us off.’

“If you understand a bit about the finance then you can see who is the cowboy and who is not. And you will begin to understand when these big financiers come in; what their language is.”

The Little Forest Finance Book aims to breakdown the complex language of forest funding into a simple and easily digestible format.

Forests are the world’s largest carbon sink absorbing 2.4 billion tonnes of CO2 each year and storing billions more. The UN’s REDD+ initiative aims to offer financial incentives to governments and communities in developing countries to conserve their forests for this purpose.

The Global Canopy Programme estimates that around $30 billion will be needed annually to protect the world’s forests, following an initial spending of $81 billion.

Mitchell says this is a small price to pay to ensure the vast services the forests provide, not only as carbon stores but benefits in terms of clean water, energy, timber and health, continue to be protected.

“This is an investment in the stocks of biodiversity which produce the flows of ecosystem services which we all depend on. Those ecosystem services are massive, they are probably worth anything up to $4-5 trillion a year,” he said.

The post Mistrust and confusion holds back REDD+ finance appeared first on Climate Home News.

Climate change and biodiversity financial initiatives should be re-framed as investments rather than costs, reflecting the services the environment provides.

That’s the view of Gustavo Fonseca, Head of Natural Resources at the Global Environment Facility (GEF), who says that viewed through this prism, increased financial commitments would be easier to secure.

“The concept is very attractive, and we would like to see biodiversity investments as being that, not costs that you have to bear all the time,” he said.

“It’s not about offsetting biodiversity through a cash transfer, it’s about making sure that ecosystems can still provide the services that serve the poorest of the poor, and where substitutions by other means would cost much more.”

Ecosystem services are the processes by which the environment produces resources used by humans such as clean air, water, food and timber for building – and the economic value of these ‘services’ has risen to prominence in recent years.

The GEF serves as a financial mechanism for all three of the UN’s Rio Conventions – focusing on climate change, biodiversity and desertification. As such it wants the conventions to work more closely together – and Fonseca argues that greater cooperation between climate change and biodiversity projects would help the limited finance available go further.

“The climate change convention needs to get in the mood of the biodiversity convention who has decided the priority is not to negotiate more; the priority is to implement more,” he told RTCC. “Building on these synergies is actually another way to multiple the available resources of the individual funding lines that we have.”

He added that countries must find some “financial muscle” to ensure environmental protection, adding that this was not only about international assistance to poorer countries.

“[Countries] understand themselves they need to have a new strategy for resource mobilisation that actually gets us out of this trap that we find ourselves in,” he said. “We are liquidating natural capital, we are liquidating natural resources and we are not internalising a lot of those gains.

“And it is not solely through international assistance. Developing countries are going to get out of that position. It is by reforming their own economies; it is about introducing policy measure which takes them closer to that objective.”

The UN Biodiversity summit in Hyderabad ended with a compromise on finance that saw developed countries double their funding pledges from $5bn to $10bn.

The agreement came following intense negotiations that lasted until the late hours of Friday night (October 19), well past the 6pm deadline set by the COP.

RTCC INTERVIEW: Watch the full interview with Gustavo Fonseca

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The UN Biodiversity summit in Hyderabad has ended with a compromise on finance that sees developed countries double their funding from $5bn to $10bn.

The agreement came following intense negotiations that lasted until the late hours of Friday night (October 19), well past the 6pm deadline set by the COP.

Developed countries agreed to double their financial assistance to the developing world by 2015 and then keep it steady to 2020, the year the Aichi targets are set to conclude.

Parties also agreed that 75% of the developing countries should integrate biodiversity conservation into their national agendas – with the exception of the least developed countries (LDCs) – and adopt measures for improving financing for conservation and restoration of biodiversity.

Discussions on resource mobilisation went on long into the night, as countries struggled to reach agreement (Source: CBD/Flickr)

Francisco Gaetani, head of the Brazilian delegation to COP11 and Executive Secretary of Brazil’s Ministry of Environment says good progress was made in Hyderabad.

“We are satisfied with the final agreements developed at COP11 and while we believe that the documents could be more ambitious, this conference has facilitated significant progress towards long-term commitments on biodiversity preservation,” he said.

The focal point of the debate had been about setting baselines – how much finance is required for biodiversity protection – in every nation, setting out the starting point for targets on how much should be pledged by richer countries.

Developed nations said these were essential before any concrete pledges were made, particularly as they continued to be restricted by the global financial crisis.

Lasse Gustavsson, WWF International’s Executive Director of Conservation says the $10bn pledge is still insufficient.

“WWF came to Hyderabad asking governments to set the world on a course that would help prevent further declines in some of the world’s most valuable resources, and we have seen some success here,” he said. “But the deal reached on financing at COP11 Hyderabad is a disappointing result, because it is not nearly enough money to reach the ambitious targets to protect biodiversity the world set two years ago in Nagoya.”

WWF estimates that $200 billion needs to invested every year if governments are going to live up to their commitments set out in the Aichi Targets.

Estimates by the CBD given earlier in the conference are even higher at $300 billion per year.

Obstructions

RTCC understands that the UK and Canada were instrumental to blocking talks on finance, causing the discussions to continue after hours. By yesterday afternoon it was the only agenda item left unresolved.

At certain points during the final hours of the talks there were even concerns that no consensus would be reached at all. But countries were able to find an agreement that allowed the final piece of the text to be agreed, completing the Hyderabad outcome.

“This is good but it’s not enough,” says Jane Smart, Global Director of IUCN’s Biodiversity Conservation Group. “If we want to respond to the growing biodiversity crisis, we need more concrete action. We must engage with all levels of society, including the private sector, and look into conserving all levels of biological diversity: the diversity of genes, species and ecosystems. We are two years into the International Decade of Biodiversity now and this is more urgent than ever.”

Despite last minute funding disagreements, COP11 can be seen as a success story in many ways.

Many people have noted during the last two weeks the positive atmosphere of the discussions. While this may not be true in the intense negotiations on finance, in other areas this has certainly been apparent.

“Those meetings are relentless,” Areeba Hamid, Ocean Campaigner at Greenpeace India told RTCC. “[In the oceans discussions] for example, Japan wasn’t happy with a lot of the text, China wasn’t happy with a lot of text.

“But kudos to the chair, she was really, really pushing the countries to find common ground and I think that is great to see. There was generally an acceptance that we need to move forward and not deadlock ourselves over words.”

The phrase “in the spirit of compromise” were often used by countries as they tried to come to some agreement.

Climate change

The outcome sees consensus on several climate change issues that have been discussed over the last two weeks.

Issues in this area were hotly debated, as countries weighed up the potential negative biodiversity consequences of initiatives and the huge climate mitigation benefits they could bring.

The text on biofuels was agreed fairly early on in the conference, acknowledging that they could ‘aggravate biodiversity loss’ while recognising their role in mitigating carbon emissions.

The decision calls on all parties to give biofuels consideration when setting out their national biodiversity strategies.

Geoengineering and REDD+ were both more heavily debated, and additional groups were formed to deal with these issues.

Both were finally agreed yesterday. On geoengineering countries acknowledged the potential cross-border consequences of geoengineering.

The agreement also reaffirmed commitments from Nagoya that called for scientific evidence for the need for geoengineering before any experiments take place.

On REDD+, perhaps the most contentious of the climate issues, countries discussed how far the initiative should be discussed under the CBD and how much they should be left to the UN climate convention, the UNFCCC.

The text went some way to addressing these concerns, laying out the potential synergies between the two conventions.

WWF’s Gustavsson, however, told me that they would like to have seen an even stronger connection made.

“We would like to see a stronger link between he CBD and the UNFCCC,” he said. “Just as we don’t want biodiversity experts to solve climate change, we don’t want climate change experts to solve biodiversity challenges.

“Coherence between different UN processes here is really important. I don’t think we established as strong a link as we need, in order to be as effective as we have to be.”

Oceans

Another area, which saw significant attention at COP11, was oceans, and there were strong signals that this issue is moving up the global agenda.

One of the main decisions agreed in Hyderabad was over Ecological and Biological Significant Areas (EBSAs). Based on agreements made at COP10 in Nagoya, regional workshops over the last two years have collected the best scientific information to identify the most important areas in the oceans.

They are evaluated on such things as their rarity, their productivity, their naturalness and their importance for threatened species.

After a lengthy discussion, across the two weeks of the conference, it was agreed that countries would “take note” of these areas – despite the EU bloc calling for the stronger word “endorse”.

The decision means the CBD will now take the text to the UN General Assembly (UNGA) next year.

“We have got a result which for the time being we can be happy with,” said Greenpeace’s Hamid. “This means the nations have agreed to identify these areas and submit them to the UNGA where there is a deadlock moving forward because there was no scientific information available. If that block has been removed, effectively there is no excuse for inaction now.”

Gustavsson, however, says it is now up to WWF and other organisations to follow the decisions to the UNGA and make sure that what was agreed here is actually taken into account on the ground.

Agreements on marine ecosystems also looked at fisheries management, coral bleaching, ocean acidification and underwater noise.

The next COP meeting of the CBD will take place in South Korea in 2014.

More from COP11

UN biodiversity talks heading to tense final day

UN agreement urges caution over geoengineering tests

UK and Canada win ‘Dodo’ award for blocking biodiversity talks

Video: Head of IUCN’s Global Business and Biodiversity Programme tells RTCC that the lack of public finance will drive more private investment in global biodiversity

The post UN biodiversity talks end with finance deal as countries double funding to $10bn appeared first on Climate Home News.

RTCC in Hyderabad 

– Live coverage from CBD COP11
– TV interviews from RTCC studio in Hyderabad
– Tweet @RTCCnewswire and use #CBD and #COP11 hashtags
– Email ts@rtcc.org or message @rtcc_tierney

Finance: A final text on financial mechanisms was been sent for approval early today. No news as yet. On resource mobilisation, a text has also been produced, but it is now being scrutinised by ministers for approval. It is thought the final text will be discussed later this afternoon in the main plenary session.

G77: A letter from one of the most influential developing nation groups, the G77, warns that they will not undertake significant conservation activities unless funding is provided.

Progress: Texts on Geoengineering and biofuels are expected to be signed off today. Talks over REDD+ have been tortuous but should also be agreed on – Tim Christopherson from UN-REDD explained why this subject had caused so much controversy here.

Missing ministers: It appears only 77 of the 192 parties sent ministers to Hyderabad. Of these few appear to be attending High Level Segment meetings. In this morning’s press briefing, CBD communications officer David Ainsworth said the number of ministers attending is within the range they would normally expect for a conference. They also say the lack of ministers in the High-Level discussions is because many will be splitting their time between there and other negotiations.

Picking cotton: UK Minister for Environment Richard Benyon visited cotton fields in the remote village of Nurjahanpalli yesterday. Marks & Spencer (M&S) sources its cotton from. Benyon told the workers at the cotton field that he would not be able to buy another t-shirt from the outlet without thinking of India.

Tiger database: The National Tiger Conservation Authority of India is set to create a national database for tigers, to help aid their protection. Each tiger will be given a unique identification number and code. Experts say it will help enhance monitoring of the species and give better estimates of the population in the country.

Video of the day:  IUCN’s Gerard Bos outlines main positions in COP11 finance negotiations

Gerard Bos from Responding to Climate Change on Vimeo.

The post Hyderabad biodiversity talks: day 11 diary appeared first on Climate Home News.

The head of the UN Environment Programme Achim Steiner has called on observers to remain positive about finance discussions at the UN biodiversity talks.

Speaking at a press conference at the Convention of Biological Diversity’s COP11 summit, Steiner dismissed suggestions that there was deadlock, arguing that it was typical of international finance negotiations to run to the last day.

“Negotiations are ongoing. I would not characterise them as stuck, because a COP is there to reconcile different positions’, he said.

“What is happening right now is rational, logical and chronologically correct – I would say this COP is at work and that is exactly what it should be doing.”

He said that every signal so far, from both the Indian Presidency and the regional groupings suggested a deep commitment to resolve outstanding issues before the end of the conference on Friday.

On Wednesday India pledged $50 million to fund biodiversity projects within the country, but wider discussions on finance have proved to be the most contentious issue for parties.

Yesterday saw the contact group on finance mobilisation meet to discuss a draft text. They discussed whether a target to double biodiversity finance from developed to developing countries by 2015 was adequate. Developed countries noted that ‘baselines’ would be necessary to determine if this target was needed. Baselines refer to how much each country needs to achieve its own biodiversity plans.

Developed nations led by the EU argue that baselines must be put in place before discussions can move on to the targets for funding.

EU commissioner for Environment, Janez Potočnik told RTCC: “The condition that was agreed in Nagoya was that we would have a good baseline, that means that we understand what are the needs. We would need to have a good reporting system which means of course we would like to know how that money was spent and for what purpose.

“All of that also makes sense. That is why here in Hyderabad our firm belief in the EU is that until those things are met it is difficult to agree about definite targets. But we are also aware to meet our 2020-biodiversity targets, our Aichi Targets that we agree in Nagoya to be reached, it is coming closer so we need to discuss also how we step up our efforts.”

Developing nations say that to fulfill the mandate set in Japan in 2010 targets must be agreed here in Hyderabad. They say discussions on this should take precedence over those on frameworks and baselines.

Last week one developing nation said countries should start with the targets and then figure out how they will meet them. This sentiment was echoed in the country statements made in the High Level Segment of negotiations yesterday.

A delegate from Mozambique for example reminded the room that “when we adopted the strategic plan and the Nagoya Protocol in 2010 we appealed that only with the financial resources can we avoid repeating the mistakes” of the 2010 targets.

Thailand’s representative concurred, arguing his country: “has already worked to achieve Aichi Target 20 [on finance]. We have set up an environmental fund to support conservation activities.”

With the prospect of angry scenes at the end of COP11 if finance targets are not agreed, Steiner warned that the success of the conference could not be measured by one number.

“If you narrow it down to in Hyderabad you are only negotiating one financial amount and you reduce it to what is the international community willing to pay in order to move forward in the Aichi and Nagoya outcomes,” he said.

“You are ignoring the vast investment and the far larger investment that are part of the national and regional investment in biodiversity already.”

More from COP11

UK and Canada win ‘Dodo’ award for blocking biodiversity talks

Amnesty and Greenpeace call on India to stop coal violations

UNEP: Eight steps to feed a growing world

Video: EU commissioner talks about the need for strong baselines and a reliable framework on finance…

Janez Potočnik, EU Commissioner for the Environment from Responding to Climate Change on Vimeo.

The post UNEP chief Steiner says finance deal at COP11 still possible appeared first on Climate Home News.

UN biodiversity chief Braulio Dias has called for negotiating teams in Hyderabad to break the current deadlock over finance and demonstrate a “willingness” to talk.

Speaking on Monday afternoon, Dias would not comment on how much money he expected to see pledged, but he did say that he expected movement on this issue before the end of the conference on Friday.

“I am expecting a good indication of willingness on all sources of finance and funding for the Aichi Targets to come forward and to move the agenda along,” he said.

“We are launching a pledge where all countries can become champions to help other countries to implement the Aichi Targets – that could be finance, capacity building etc. Organisations under the convention can get involved too.

“This will send out a good message. It will send out the message from Hyderabad that there is willingness.”

The main focus of this year’s summit is how to implement two agreements signed off in 2010: the Nagoya Protocol and the Strategic Plan on Biodiversity.

The Strategic Plan aims to halve biodiversity loss and increase protected areas by 17% worldwide by 2020, and sets out 20 ‘Aichi’ targets. The Protocol aims to promote benefit sharing of genetic resources and ensure countries are rewarded for conserving them.

CBD Executive Secretary (left) and Special Secretary for India’s Ministry for Environment and Forests (centre) said they were pleased with the progress made at this year’s biodiversity conference (Source: CBD/Flickr)

Talking at a joint press conference with the Indian Ministry of Environment and Forests, Dias said he felt “even the most difficult talks are progressing in good spirits” in Hyderabad.

Shri M.F Farooqui, Special Secretary of the Ministry echoed Dias, saying he felt progress had been made and that the high-level discussion this week would add political impetus to discussions.

While the convention has already been able to agree on four sections of the outcome text – biofuels, taxonomy, plant conservation and financial incentives – working groups and contact groups continue to debate the more contentious issues.

Financing Aichi

Last week finance negotiations broke down in a farcical fashion after delegates were unable to decide the order topics should be discussed.

A global north-south divide was apparent – developing countries pushed for strong targets by the end of this week, while developed nations called for more time to work out a firm reporting framework.

Farooqui warned that it is important not to put a figure on the Aichi Targets too soon, but he said that an intermediate or interim approach should be found at this conference – as well as a road map for future discussions in this area.

“Baselines are not easy to set,” he said. “It is a work in progress even for countries who have already made their reports. All parties recognise that it will take time.

“Also what is a robust baseline? It is a relative concept and for many parties it will come gradually. It is possible to look at the interim and to reach an agreement on the information that is already available.”

He added that he remains optimistic that even the most complex discussions will be resolved before the close of the conference on Friday.

“We have various working groups and contact groups and friends of the chair groups working. I am quite confident that the remaining issues will be resolved well in time,” he said.

More from COP11:

The RTCC biodiversity A-Z

Deadlock on finance at UN Biodiversity summit

Youth anger at lack of participation in UN biodiversity talks

Video: Braulio Ferreira de Souza Dias, Executive Secretary CBD tells RTCC that the agenda is set, and now it is time to focus on implementing these plans…

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Discussions on financing the Strategic Plan on Biodiversity have broken down at the UN’s summit in Hyderabad.

Talks this morning ended an hour earlier than expected when countries hit a deadlock over procedural matters.

The main argument was over the structure of the latest text, released today, and what should be negotiated first – targets for financial resources or a framework to report and monitor these pledges.

The split between the developing and developed world was apparent with neither side willing to budge from their position.

A target of this year’s Convention of Biological Diversity summit is to implement decisions reached at the last conference in Nagoya two years ago – the Nagoya Protocol and the Strategic Plan on Biodiversity. These require financing, although no targets have been set.

The Strategic Plan aims to halve biodiversity loss and increase protected areas by 17% worldwide by 2020, and sets out 20 targets – the Aichi Targets – to achieve this. The Nagoya Protocol aims promote benefit sharing of genetic resources and ensure countries are rewarded for conserving them.

Countries stalled over what order to tackle discussions on resource mobilisation – smaller group will convene tomorrow to try aid progress (Source: CBD/Flickr)

Two main approaches to generating cash have emerged over the last week.

Mexico, the Philippines, China, South Africa, Uganda and Malaysia have all called for firm financial targets to be agreed in Hyderabad, as agreed at the last COP. They say developed countries must stand by this pledge.

Malaysia’s negotiator said “countries want strong targets on resource mobilisation” without which they argued the Aichi Targets could not be achieved.

Philippines on need 2 adopt fin. targets 2 start implement’n-saying ‘let’s now start the process’ is NOT an answer to a disaster #COP11#CBD

— [Earth in Brackets] (@earthinbrackets) October 12, 2012

Developing nations also said that sources of money had to be much larger than the current $6 billion pledged for biodiversity.

On the other side of the debate, the EU, supported by Canada, Japan and Switzerland said that before targets can be set, a financial framework that establishes how much each country needs must be drawn up.

The EU delegation demanded these were put in place before they could discuss targets.

Stalemate

In the space of an hour the atmosphere in the negotiating hall turned fractious, with developing nations arguing they had already made too many concessions at previous biodiversity summit in 2010.

Despite efforts by the EU to reassure developing countries that they were committed to providing finance, South Africa, an influential voice at UN environmental talks, summed up the despondent mood of the global south.

Their delegate called on parties to: “start with where we want to get to and then look at how to get there. In Africa we are good at signing and dancing, we have had a lot of signing and dancing at the last COPs, we have already made a lot of concessions. We are not here to sing and dance; we are here to get resources.”

S Africa-We like music&dance but are not here 2 dance around-we r here for resources for implement’n-We MUST have targets #CBD #COP11

— [Earth in Brackets] (@earthinbrackets) October 12, 2012

The Ugandan delegate went further, saying that if countries did not get the outcome that they needed: “maybe we will retire … why are we continuing like this?” he asked.

Dealing with disaster

On a slightly more light-hearted note Namibia suggested that the group split – with developing nations dealing with targets, and developed nations on frameworks. That way everyone could agree. “I am being factitious…If we do not laugh a little bit now, we will cry a lot later,” he said.

With delegates unable to agree how to move forward, a smaller Friends of the Chair group will work with co-chairs to find a resolution.

A group including Argentina, Bolivia, Brazil, Canada, China, Columbia, Costa Rica, EU, Japan, Kenya, Malaysia, Mexico, Namibia, Norway, the Philippines, Switzerland and Uganda will convene tomorrow.

More from COP11

Biofuels deal agreed at UN biodiversity summit

Hyderabad biodiversity talks: day 5 diary

India urged to ditch damaging sea walls and plant mangroves

The post Deadlock on finance at UN Biodiversity summit appeared first on Climate Home News.

– Live coverage from CBD COP11
– TV interviews from RTCC studio in Hyderabad
– Tweet @RTCCnewswire and use #CBD and #COP11 hashtags
– Email ts@rtcc.org or message @rtcc_tierney

Finance: Decisions on financing the Aichi Targets and other CBD projects could last until the final days of the conference, according to delegates RTCC has spoken to. Splits between developed and developing countries will be familiar to seasoned observers of environmental and trade talks – and COP11 is no exception. South Africa and Belgium will chair a discussion on finance tonight.

Cashback: Of more immediate concern to delegates, half of Hyderabad’s cashpoints have run out of money, due to a strike by the employees of a private security agency involved in transporting currency. Local reports suggest this could last for days. Luckily food and drink within the conference centre here in Hyderabad is free.

Vultures: These remarkable birds are iconic in India, and work to protect them is an important issue. Recently vultures have been dying as a result of ingesting an inflammatory medicine that is given to cows. It’s toxic to vultures, and cows in Nepal, Pakistan and Bangladesh, are now being given a human version of the drug.

Youth: Young people had a major win yesterday when a bid for further youth inclusion in discussions was supported by Norway, Dominican Republic and Gabon. The text they submitted requests the convention: “Acknowledges the importance of youth participation in decision-making processes on all levels and encourages parties and other governments to fully include youth in all relevant processes”.

Forests: Another working group will convene this afternoon to discuss REDD+. Discussions within the main negotiations and on the sidelines are focusing on how texts on REDD+ adopted in the climate talks can be introduced into the CBD arena.

Dancing delegates: Festivities at the conference continued last night as girls from Oxford Grammer School in Hyderabad performed a traditional Bamboo dance. Not to be left out, delegates from the UK and Zambia also treated the audience to an impromptu dance to Bollywood tunes.

Top Tweets

Sustainlabour at #CBD #COP11 discussion on Sustainable Management of Biodiversity. Where is reference to the new jobs that can be created? .

— sustainlabour (@sustainlabour) October 11, 2012

Chair of Working Group 2 just reminded delegates to take into consideration #Youth intervention yesterday under 5.4 (: #CBD #COP11

— [Earth in Brackets] (@earthinbrackets) October 11, 2012

Oh dear -France just got caught napping on the big screen. They’re certainly paying attention to observer statements #CBD#COP11

— [Earth in Brackets] (@earthinbrackets) October 11, 2012

Picture of the day

Delegates were treated to some traditional Bamboo dancing (Source: UNCBD/Flickr)

Video of the day

UNCBD Executive Secretary, Braulio Ferreira de Souza Dias talks to RTCC about the two vital areas of focus over the next two weeks: implementation and finance.

The post Hyderabad biodiversity talks: day 4 diary appeared first on Climate Home News.

Governments must look for innovative ways to raise the finance needed for biodiversity and set clear funding targets that can be delivered, according to NGO WWF.

Speaking ahead of the Convention on Biological Diversity’s (CBD) COP11 conference in Hyderabad, Rolf Hogan, Biodiversity Policy Coordinator at WWF International said countries had to implement decisions made two years ago in Nagoya, Japan.

“We are concerned and disappointed, to an extent, about the lack of implementation across the globe on what was agreed in Nagoya,” he said.

At the COP10 Conference two years ago, countries made major breakthroughs on the biodiversity agenda, with agreements including the Nagoya Protocol – on the benefit sharing of genetic resources – and the 10 year long Biodiversity Strategy Plan.

Two years on, however, only six countries have ratified the Protocol.

WWF call for more focus on the High Sea – the area of the world’s oceans which are not covered by national jurisdiction

And while over 91% of the Parties under the convention now have national strategies or plans on biodiversity, only 14 countries have adapted these to include the agreements made in Japan.

Sejal Worah, Programme Director from WWF India said the coming weeks will provide an opportunity for India to lead the way towards these targets.

“Here we have a historic opportunity and in India we should grab this opportunity with both hands,” she said. “We should make sure we not only protect biodiversity in our own country but also protect it across the world.”

Three Recommendations

Hogan said there are “reasons to hope” and that there are three key areas where progress could be made in Hyderabad.

Firstly he said strong targets should be set on how the Strategy could be financed, calling on governments to be creative on how to raise these funds. He also said increasing attention is being given to the role the private sector could play.

“We are looking to governments, foundations – so funds set up by private people – and then there is the role of the private sector, which is getting increasing attention,” he said. “There is a specific area of the CBD which is all about engaging the private sector.

“This is not only about funding but also looking at the impacts to biodiversity from the private sector, so for example from supply chains etc…If we can address this we could potentially limit the need for finance for conservation. There are also specific areas such as tourism that could be very compatible with biodiversity if carried out in the right way, and money could be raised to be put back into conservation.”

Secondly he said a key area of focus should be given to biodiversity on the High Seas – the areas of our oceans outside national jurisdiction – and that COP11 should set out a series of reports to make further progress in this area.

Finally, Hogan said strong efforts should be made by parties to mainstream biodiversity – and more specifically to implement it alongside development. He highlighted the role the CBD could have in the development of the Sustainable Development Goals.

Related articles:

Biodiversity loss, benefit sharing and finance on CBD COP11 agenda

Response to George Monbiot: The valuation of nature and ecosystem services is not privatization

Photo of the week #24: Biodiversity & climate change, the last tree standing

The post WWF reminds nations of promises on environmental finance appeared first on Climate Home News.

A new craze is growing.

Around the world people are pledging money to help get projects they believe in off the ground, opening up a whole new funding channels for social enterprises and sustainable solutions – and it’s called crowdfunding.

A recent report by Massolution revealed that in 2011 that there were 452 crowdfunding platforms worldwide. They generated $1.5 billion for over 1 million campaigns – predicted to rise to $2.8 billion in 2012.

Crowdfunding describes the concept of people pooling their time, cooperation and most importantly money to support initiatives, led by others, get off the ground. It could be providing the capital for a new film, developing software and products or kick-starting a community energy scheme.

Crowdfunding puts the power back into the hands of consumers who can now help fund the projects and companies they want to do well (Source: masochismtango/Creative Commons)

In a world where banks are increasingly reluctant to offer loans to small and medium-sized businesses, it  also hands some power back into the hands of consumers who can help fund projects and companies they want to do well.

This is good news for renewable energy and other companies operating in the ‘green’ sector – offering a chance for new technologies to attract the finance they need to grow.

“Maybe an organisation hasn’t been accepted by the traditional funding options,” Alex Budak from crowdfunding platform startsomethinggood.com told RTCC.

“For example on Kickstarter [a crowdfunding website] there is a project called Pebble Watch. They tried the traditional funding route and were rejected by venture capitalists – instead they went directly to the community and let the market speak for itself.”

Startsomethinggood.com is a platform which aims to fund initiatives for social good – whether that be non-profit or profit based projects – around the world.

Examples include Speech4Good to help people support people in need of speech therapy and the Do Good Bus aimed at encouraging young people to engage in proactive engagement with the local community.

Customer ownership

Budak argues they provide a solid base not only to seek funding but to also build support and engagement in ideas and innovations.

“We talk about ourselves as a platform of raising funds and growing a community of supporters, and we have heard from people who have used our site who say actually growing that community of supporters has been equally and in some cases even more important than the funds themselves,” says Budak.

“You might get 100 people who donate to your campaign and help get you started but those 100 people may also provide volunteer work, connections, people who want to be part of the venture as possible workers or interns.”

Crowdfunding is not a new concept to sustainability organisations. The 2009 climate change documentary Age of Stupid was funded by over 600 supporters. NGO 10:10’s Solar School project aims to aid schools to crowdfund for solar panels.

And earlier this year the Bicycle Academy, which runs bike-making workshops, sending the frames to Africa, raised £40,000 in just six days. It was Peoplefund.it’s first success – and it’s interesting to note that the sums involved are not vast (relatively speaking).

“It is relatively hard to get funds from foundations, from venture capitalists, until you have proven your model,” Budak says.

“So especially early on, the idea of connecting with your initial group of supporters, your peers, your tribes can be a great way of getting started and test your model, test your idea, see if it even works before you go from there”.

Education & funding

Bristol's Demand Energy Equity aims to run educational workshops to create solar panels to fit a solar tree design (Source: Demand Energy Equity)

Another project which has seen success on Peoplefund.it is a joint venture between Demand Energy Equality and Edible Futures based in Bristol.

The project aims to make a solar tree which will power a rain-fed irrigation system at the Edible Futures’ nursery.

The pledged money will help fund workshops where the local community can learn to build solar PV panels – which will then form the leaves of the tree.

As well as raising the necessary finance, Daniel Quiggin from Demand Energy Equity told me Crowdfunding offered a great chance to raise the profile of their project.

“It forces you to tell people about the project – I suppose in a way it is killing two birds with one stone,” he said. “Also the whole project relies on funding of different sorts and it is about getting a diverse set of approaches so you are not always rely on applications. Otherwise you run out of funders.”

Peoplefund.it have teamed up with website energyshare.com who agreed to match any funds from other investors. £5,000 came from people’s pledges and another £5000 from energyshare.com.

Quiggin says it is a lot of work. He says the key to the projects success would be having an existing presence – particularly online and on Twitter – and getting the word out about your project.

He also admitted that while crowdfunding online offers the chance for a range of people to help fund your project, you are still fairly reliant on the people you know and your existing supporters.

“They were mostly family and friends [who donated],” he said. “There were a few people who weren’t family and friends but it was mostly people who knew us. Doing it through Peoplefund.it, however, gave us the legitimacy that we wouldn’t necessarily have been able to get on our own.”

Crowdfunding as an investment

The potential for clean energy projects to be crowdfunded is growing and companies including Solar Mosaic in the US and Abundance Generation in the UK are already successful applying the crowd funding model to such projects.

Many of these companies are starting to move the concept of crowdfunding away from charitable donations and more towards existing investment models.

Sometimes this works in the form of a loan. Whatever you have put in you will see returned once the project is up and running. Increasingly common are investments that offer a specified ‘rate of return’ on their input.

Crowdfunding could open up finance channels for groups setting up renewable energy projects (Source: Harlequin_colors/Creative Commons)

This is called ‘equity crowdfunding’, and it’s still technically illegal in the US, but a new piece of legislation – the Jumpstart our Business Startups or JOBS Act – could soon see it take off.

How does it work?

Users of the Abundance platform, for example, purchase debentures – essentially an IOU – and will receive a regular cash sum, your share of the money made from generating electricity.

Users can still invest as little as £5 in a project but now they will receive an average of 5-9% return on their investment.

Their first project aims to raise between £300,000 and £1,400,000 – each person can pledge between £5 and £50,000– to build a 0.5MW wind turbine at Great Dunkilns Farm in the Forest of Dean.

“We call it ‘democratic finance’, says Bruce Davis, co-founder of Abundance Generation. “Enabling small investors, starting at as little as £5, to produce a regular return from the generation and sale of 100% green electricity from wind, solar, hydro and other renewable energy sources.”

And while investors can still invest small amounts, Baduk sees no reason why this funding model could not be scaled up massively.

“I think it is hugely scalable,” he says. “In our case the smallest campaign we had was $200 and the largest was $101,000 so it really is scalable. Kickstarter has had campaigns that have raised multiple millions of dollars so really more of an issue of the people running the venture, how they can tell their story. There are really no limitations on it.”

Five tips for future crowdfunders:

1) Which website? With hundreds of potential sites to choose from, it is important to find the right one for your project. While Kickstarter looks to fund creative projects, if your looking for funding for something more socially minded Startsomethinggood is more for you. There are also a wide range of energy specific sites out there, like Abundance Generation.

2) Clarity: People like to know exactly what they are paying for and what they are going to get in return for their cash. You should be clear about where your budget is going. And whether it is equity or donation funding with a few perks added in (some projects will offer goods and services for free) make sure you let people know what they can expect.

3) Goals: Many funding sites have the rule that if you don’t meet your full target in the designated time then you won’t get anything at all. Make sure that you set your target is realistic and find the balance between raising enough to while making sure you can meet your target.

4) Shout! While Crowdfunding websites are great, don’t forget about all the other ways to can get the word out. Demand Energy Equity found using Twitter and other social media platforms a huge help, while hitting the streets locally and raising awareness in person about your project will also help you drum up support.

5) Plan: With a time limit set on your crowdfunding, make sure you plan ahead. Analysis from Kickstarter shows that there are peaks in funders at the start and end of a funding period so make sure you have regular emails going out and plenty of action on Twitter planned for the space in between to keep the interest for your project going.

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The post Crowdfunding: A new source of finance for sustainability and renewable energy appeared first on Climate Home News.

Day two of the UN climate change agency’s finance workshop turned its attention to identifying specific sources of finance.

The issue is a political hot potato at the climate talks with its Green Climate Fund already behind schedule, the current system expiring this year and unilateral funding schemes attracting criticism. Delegates showed again how adept they are at passing it among themselves.

Familiar divides, long-running arguments and little agreement.

A number of ideas that have been floated as sources of climate finance were dismissed during the session.

Ending fossil fuel subsidies was a strong theme among NGOs and campaigners at Rio+20. (Source: Flickr/Avaazorg)

Fossil fuel subsidies

NGOs (largely in the western world) are calling for the end of fossil fuel subsidies which they argue could free up as much as $1 trillion.

Sadly its not that simple. In the developing world, the removal of fossil fuel subsidies for the poor has created civil unrest.

“Fossil fuel subsidies often benefit the rich. But there could be genuine social challenges that result from cutting fossil fuel subsidies,” said Paul Watkinson from the French delegation. “If real, these need to be addressed.”

Hey @UN_climatetalks, over a million people support #endfossilfuelsubsidies. Time to put that $$$ to better use. #LTFchat

— David Turnbull (@david_turnbull) July 10, 2012

Financial Transaction Tax (FTT or Robin Hood tax)

New French President Francois Hollande revealed tax on financial transactions is under construction between nine EU nations.

Britain has summed up the argument against, saying that if it takes part businesses will leave for another market.

Paul Bodnar from the US State Department doesn’t see a future for an FTT in climate finance.

“The FTT is almost impossible to impose globally. The private actors involved would work around the attacks and could erode tax base further by driving activity to offshore havens,” he said.

“Market based efforts to price carbon emissions are promising. We need sources of finance that are linked to emissions.”

Erik Haite, a Canadian consultant on the panel agreed, adding that it would be impossible for the 195 parties to negotiate a global FTT.

Transport Levies

The idea is simple enough, to charge airlines and shipping operators for every ton of carbon they emit while going about their business.

However, the EU angered many when it set up an EU-wide scheme that was applicable to airlines using airports in its territory, regardless of where the flight originated. Opposition came from China, the US and India.

Rajasree Ray, from the Indian Ministry of Finance summarised her country’s argument against such schemes.

According to IMF, a moderate tax on bunker fuels could generate $15bn after rebates for developing countries: let’s make it happen #LTFchat

— ActionAidUSA (@ActionAidUSA) July 10, 2012

“If transport taxes are levied on developing countries, it will be against the principle of Common But Differentiated Responsibilities,” adding that carbon trading should not be categorised as climate finance and nor should any form of loan.

With three of the main single mechanisms seemingly out of the running then, what’s left?

Many governments have point to the recession as a reason why they are unable to foot the bill for climate finance.

“The burden of financing cannot be shifted from public to private. If we decided to go to war tomorrow billions of dollars would be available, it’s not about availability it’s about political will,” said Andrew Bishop, lead negotiator for Guyana.

If India’s Ray is correct and her delegation oppose loans, carbon trading and any tax that is not exclusively for the developed world, what’s left?

The Clean Development Mechanism, currently used for small to medium sized projects is one option but as Standard Bank’s Geoff Sinclair points out, it would need to be significantly scaled up.

Old divides

Cuba expressed its dismay at seeing too many western organisations sitting on the panel, which left many delegates shuffling uncomfortably in their seats.

The delegate then made a crucial point that was seized upon by other participants that climate finance is too often expressed as rich nations paying money to poor country and then never seeing it again.

Much climate finance will however be reinvested in developed world technologies, loans will be repaid and ultimately, all benefit from any carbon abatement.

Surya Sethi, a former Indian climate negotiator who moderated the first session took issue with the State Department’s Bodnar for suggesting countries were designated rich or poor in the eyes of the UN climate talks based on their GDP. He appeared to take pleasure in correcting the Washington official, stating that historical emissions were in fact the basis of this categorisation.

Bodnar took his next speaking opportunity to suggest that using any indicator from 1992 was unwise.

“If you think historical responsibility should be based on a list drawn up in 1992 you’re welcome to that opinion. As other countries’ capabilities evolve, I would have thought that you would want them to ramp-up their responsibilities?” he retorted.

The session finished with few answers but its aim is not to find solutions, simply to tee up the debate at the next all-in round of negotiations in Doha this November. With existing financial commitments expiring the following month, the issue could well be at the heart of any progress, or the cause of an impassable stalemate.

The post Where will the money come from to pay for climate change? Lessons from Day two of UNFCCC finance workshop appeared first on Climate Home News.