3 Climate Finance Highlights to Watch for at the NYC Climate Summit
The UN Climate Summit will draw 125 heads of state and government to address the global challenge of climate change, the biggest gathering of its kind ever. Building on the excitement of the massive People’s Climate March on September 21, we should expect some movement on the key question of how to finance climate solutions. Here are three highlights to look for at the summit and in the coming months:
Pledges to the Green Climate Fund: This fund is the main global channel for climate finance and could receive more pledges to enable it to support climate solutions in developing countries. Germany already announced a major contribution of nearly $1 billion in July and other developed countries are expected to step up between now and the end of the year. UNFCCC chief Christiana Figueres said earlier this month that “initial funding of $10 billion would be a good start […].” Even some developing countries may announce important contributions to the fund, demonstrating leadership and pushing wealthier countries to deliver on earlier promises of mobilizing $100 billion per year by 2020.
New finance partnerships to shift all investment: An estimated $90 trillion needs to be invested in cities, energy and land use between now and 2030 to maintain global economic growth. However, a shift to low-carbon, resilient infrastructure can be achieved with only an additional 5 percent— $4.1 trillion – in up-front investment between 2015 and 2030. Even with that additional investment, shifting the business-as-usual investment of $90 trillion toward low-carbon activities will be a challenge. To achieve this shift, committed partnerships and coordination among banks, investors, governments and other finance actors—be they local, international, or national, be they public or private—can help drive the bulk of investment, not just the portion designated as climate finance, toward climate solutions. We hope to hear credible proposals from the public and private sector on strengthening cooperation to build a low-carbon, climate-resilient economy.
Policy signals to drive climate investment: While direct commitments of finance are needed, creating the right policy environment is a prerequisite to meeting the scale of the climate challenge. Relatively modest investments in policy and regulatory change can pave the way for much greater investment in climate solutions. Many examples demonstrate the importance of policy and regulatory frameworks as the foundation for a new climate economy; for example, modest investment in electricity market reform in Uruguay has helped spur enormous investment in wind energy. We need not be afraid of this reality: a new report released a week before the summit documents how climate solutions and economic growth can develop hand in hand.
LEARN MORE: Check out our UN Climate Summit live blog on September 23.