Remarkable Opportunity for Global Economy in Upcoming Climate Change Talks

United Nations Framework Convention on Climate Change Executive Secretary Christiana Figueres is the UN's top climate change official. In this editorial, written exclusively for Bloomberg BNA, Figueres describes some of the most pressing near- and long-term challenges the world faces as the UN process enters the home stretch for a universal 2015 global climate agreement.

UNFCCC Executive Secretary Christiana Figueres

[Christiana Figueres is executive secretary of the UN Framework Convention on Climate Change (UNFCCC). The opinions in this article do not represent the views of Bloomberg BNA, which welcomes other points of view.]

An estimated $90 trillion will be invested in infrastructure over the next 15 years: the crucial question is whether this will go into the old brown economy of the past or a new, resource-efficient, low-carbon economy of the future.

Even if climate change were a chimera, there are multiple challenges that require a sustainable development path.

These range from addressing declining natural resources, losses of biodiversity, eradicating poverty and generating decent jobs to improving public health and arresting pollution to our air, land and seas.

The fact that climate change is real, with the risk assessments of the Intergovernmental Panel on Climate Change painting ever more sobering pictures of the costs of inaction, adds further urgency to how we invest now and into the future.

Green Investments.

A proportion of this $90 trillion has begun to migrate toward green investments.

Since 2006 well over $1 trillion has been invested in new renewable energies with rising investments now in developing countries too: Annual global investments in energy efficiency are running at around $300 billion according to the International Energy Agency.

Billions of dollars are flowing into forests and other ecosystems to reduce emissions and conserve these vital networks of what one might term the planet's soft infrastructure.

New financial instruments are emerging including climate and green bonds; pension funds to universities and faith groups are migrating capital from fossil fuel to cleaner investments and pioneering cities to progressive corporations are stepping up action in fields ranging from green procurement to more sustainable supply chains.

September Summit

This growing momentum was underlined by a range of positive pledges and commitments that emerged around the UN Secretary General's Climate Summit in September.

Commercial banks will provide US$30 billion in new climate finance by the end of 2015 by issuing green bonds and other innovative financing initiatives.

The insurance industry committed to double its green investments to US$82 billion by the end of 2015 and announced it would increase the amount placed in climate smart investments to 10 times the current amount by 2020.

Twenty-four leading global producers of palm oil as well as commodities traders committed to contribute to the goal of zero net deforestation by 2020 and to work with governments, private sector partners and indigenous peoples to ensure a sustainable supply chain.

Limit of 2 Degrees Celsius.

Seventy-three national governments, 11 regional governments and more than 1,000 businesses and investors signaled their support for pricing carbon. Together these leaders represent 52 percent of global gross domestic product, 54 percent of global greenhouse gas emissions and almost half of the world's population.

But with global greenhouse gas emissions at their highest for 800,000 years and rising, it is clear that the effort to date is not yet commensurate with the task at hand.

This is particularly true in the context of the urgency of staying within the agreed limit of keeping the global temperature rise under 2 degrees Celsius to avert the most dangerous impacts of climate change.

How to strengthen the signal to all actors that governments are fully committed to realize low carbon, resilient economies nationally and globally?

'Key Moment' in Lima

In a few short weeks nations will meet in Lima for the UN Climate Change Convention conference en route to Paris in late 2015—here nations have agreed to ink a new universal climate agreement.

Lima marks a key moment toward strengthening the low-carbon signal: The overarching outcome needs to be a draft of the new agreement that is concise and credible enough to be dispatched to cabinets across the globe in 2015.

Governments have also agreed to deliver their Intended Nationally Determined Contributions (INDCs) to the Paris agreement in the first quarter of next year, an early example of this being the European Union's announcement in October of an emission reduction of “at least” 40 percent by 2030.

These INDCs need to be ambitious enough to keep up the positive momentum toward Paris allied to strong and sufficient pledges into the new Green Climate Fund that include support for adaptation.

Plan for 20, 30, 40 Years.

Paris is not going to solve the climate change challenge at a pen stroke. But it needs to be robust enough and flexible enough to serve the people and the planet for the next 20, 30 or 40 years.

It needs to underline determination in the short and medium term but also the long term if the signal from the French capital is to have the required effect on financial flows.

The short term imperative is to peak global emissions within the next 10 years and the medium necessity is to trigger a deep de-carbonization of the global economy.

Climate Neutrality.

Long term the world has to, by the second half of the century, achieve climate neutrality, or zero net as some term it, such that the little emissions left are easily and safely absorbed by our forests and soils to salt marshes, mangroves and sea grasses.

Irrespective of policy, $90 trillion worth of investment is going to flow through the global economy as old power plants are replaced and emerging economies grow.

The world has a remarkable opportunity to imprint that capital flow. It is an exciting plan, called the Paris agreement, that can channel these game-changing funds into generating real and sustained well-being for all if everyone gets on board over the next 13 precious months.



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