The long march to Paris

Financial Mirror (Cyprus) - - FRONT PAGE -

To be sure, at first glance, the United Na­tions Cli­mate Change Con­fer­ence tak­ing place from Novem­ber 30 to De­cem­ber 11 looks a lot like the 2009 con­fer­ence in Copen­hagen, when ne­go­tia­tors were un­able to agree on an ef­fec­tive ac­cord. And in­deed, the de­sired out­come re­mains un­changed: an in­ter­na­tional deal that will re­duce green­house-gas emis­sions and limit global warm­ing to 2 de­grees Cel­sius above prein­dus­trial lev­els.

But there are no­table dif­fer­ences this time around. The stiff eco­nomic head­winds that ne­go­tia­tors con­fronted six years ago have been re­placed by a tail­wind of op­por­tu­nity. No longer is the con­ver­sa­tion lim­ited to bur­den shar­ing and sac­ri­fice; in­creas­ingly, there is talk of in­no­va­tion and tech­no­log­i­cal break­throughs that make sus­tain­able de­vel­op­ment pos­si­ble. In short, the ne­go­ti­a­tions are tak­ing place in an en­vi­ron­ment fa­vor­able to col­lec­tive ac­tion, with sup­port from the busi­ness com­mu­nity, fi­nan­cial in­sti­tu­tions, civil so­ci­ety, re­li­gious lead­ers, politi­cians, and, in­deed, the pub­lic at large.

Fur­ther­more, the agree­ment to be reached in Paris is be­ing built from the bot­tom up. It is clear that what­ever shape the agree­ment takes, it will not be to­tally top­down. So coun­tries have been asked to pro­pose what they think they can achieve in terms of re­duc­ing emis­sions af­ter 2020, through so-called In­tended Na­tion­ally De­ter­mined Con­tri­bu­tions (INDCs). And while this so­lu­tion may not yet be ad­e­quate to the chal­lenge of head­ing off the con­se­quences of cli­mate change, it is a strong step for­ward.

Mean­while, in the years since the Copen­hagen sum­mit, there has been a surge of con­crete progress on the part of the “non­state ac­tors” whose co­op­er­a­tion will be needed to im­ple­ment an in­ter­na­tional agree­ment.

An un­prece­dented num­ber of sci­en­tists, busi­ness lead­ers, and sub­na­tional gov­ern­ment politi­cians such as may­ors and gov­er­nors have made clear the need for a strong agree­ment in Paris. Broad sup­port for a ro­bust ac­cord is re­flected in the more than 10,000 com­mit­ments to com­bat cli­mate change made by cities, re­gions, com­pa­nies, and in­vestors.

This emerg­ing con­sen­sus was also re­flected in May at the Busi­ness & Cli­mate Sum­mit and Cli­mate Fi­nance Day, where in­vestors and busi­ness lead­ers pledged to lead the global tran­si­tion to a low-car­bon econ­omy. Par­tic­i­pants at the two events called for set­ting a price on car­bon, phas­ing out fos­sil-fuel sub­si­dies, more part­ner­ships with gov­ern­ments, and the cou­pling of pub­lic and pri­vate fi­nance to dif­fuse the risks of low-car­bon in­vest­ments.

And in July, more than 2,000 re­searchers meet­ing in Paris at a con­fer­ence called Our Com­mon Fu­ture Un­der Cli­mate Change con­cluded that am­bi­tious ef­forts at mit­i­gat­ing car­bon diox­ide emis­sions would be eco­nom­i­cally fea­si­ble and have nu­mer­ous knock-on ben­e­fits. This find­ing is fully in line with last year’s New Cli­mate Econ­omy re­port, which es­tab­lished that it is pos­si­ble to com­bat cli­mate change while pro­mot­ing eco­nomic growth.

Grad­u­ally, fund­ing is be­ing chan­neled to­ward re­gions in need of as­sis­tance in the fight against cli­mate change. The OECD es­ti­mates that the flows of pub­lic and pri­vate cli­mate fi­nance reached $62 bln in 2014. And, in Oc­to­ber, the World Bank pledged to in­crease its direct and lever­aged cli­mate fi­nanc­ing to up to $29 bln an­nu­ally.

In­no­va­tive fi­nanc­ing is also be­com­ing more im­por­tant, es­pe­cially in de­vel­op­ing coun­tries. In Fe­bru­ary, Yes Bank, In­dia’s fifth-largest pri­vate-sec­tor bank, is­sued the first ever “Green In­fra­struc­ture Bond.” In Au­gust, the In­ter­na­tional Fi­nance Cor­po­ra­tion is­sued a five-year “green Masala bond” on the Lon­don Stock Ex­change. Mean­while, in­sti­tu­tional in­vestors have been snap­ping up a se­ries of cli­mate bonds fo­cus­ing on wa­ter, af­ford­able hous­ing, smart cities, and an ar­ray of other mit­i­ga­tion and adap­tion projects.

Mean­while, lo­cal-level politi­cians in cities and re­gions around the world are of­ten well ahead of their na­tional lead­ers. At the World Sum­mit Cli­mate & Ter­ri­to­ries in Lyon in July, 14 net­works of sub­na­tional and lo­cal gov­ern­ments, rep­re­sent­ing 11% of the world’s pop­u­la­tion, com­mit­ted to emis­sion re­duc­tions equiv­a­lent to 15% of the ef­fort needed to keep global warm­ing be­low 2 Cel­sius.

What all th­ese ef­forts have in com­mon is a de­sire to com­pel ne­go­tia­tors in Paris to recog­nise the ur­gency of the cli­mate chal­lenge. Their par­tic­i­pants want world lead­ers to understand that progress is not only achiev­able; it is al­ready oc­cur­ring. A global cli­mate agree­ment re­mains vi­tally im­por­tant. But forg­ing one would no longer be a leap of faith. It would be a leap into open arms.

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