Various private banks and the World Bank Group (WBG) have announced initiatives that will contribute to implementing the Paris Agreement on climate change adopted in December 2015, as well as various Sustainable Development Goals (SDGs).
By pledging US$7 billion, a group of eight banks and investors have joined the Bank of America's initiative aimed at stimulating US$10 billion for investments in clean energy and sustainable development.
For its part, the WBG has announced its Climate Change Action Plan that aims to support countries in delivering on their national climate plans, also referred to as Nationally Determined Contributions (NDCs) under the UNFCCC, and sets ambitious targets for 2020 in high-impact areas, including clean energy, green transport, climate-smart agriculture and urban resilience.
7 April 2016: A number of private banks and the World Bank Group (WBG) have announced initiatives that will contribute to implementing the Paris Agreement on climate change, which was adopted in December 2015, as well as various Sustainable Development Goals (SDGs). By pledging US$7 billion, a group of eight banks and investors have joined the Bank of America’s initiative aimed at stimulating US$10 billion for investments in clean energy and sustainable development. For its part, the WBG has announced its Climate Change Action Plan, which aims to support countries in delivering on their national climate plans, also referred to as Nationally Determined Contributions (NDCs) under the UNFCCC, and sets ambitious targets for 2020 in high-impact areas, including clean energy, green transport, climate-smart agriculture and urban resilience.
The Bank of America’s Catalytic Finance Initiative is joined by HSBC, Credit Agricole, AllianceBernstein Holding, Babson Capital Management, the European Investment Bank (EIB), the International Finance Corporation (IFC) and Mirova, a subsidiary of Natixis Group, among others, following an invitation-only Future of Energy Summit held by Bloomberg New Energy Finance (BNEF) in New York, US, from 4-5 April 2016. The Catalytic Finance Initiative created in 2014 aims to raise at least US$10 billion in new investments to scale up clean energy. The banks’ announcement brings the total amount raised to US$8 billion.
According to the joint statement issued by the banks, financial innovation and capital “play a critical role in the transition to a low-carbon economy.” The statement says that, by pledging US$8 billion, the banks can contribute to the advancement of new investment opportunities in clean energy, thereby contributing to the implemention of SDG 7 (Ensure access to affordable, reliable, sustainable and modern energy for all), as well as other SDGs. The initiative also aims to “achieve the necessary scale for a positive impact on climate change,” thereby advancing SDG 13 (Take urgent action to combat climate change and its impacts). Speaking at the BNEF Future of Energy Summit, Jonathan Taylor, EIB Vice-President in charge of environment and climate action, stated: “Many more investors need to factor climate risks more explicitly into their investment decisions.” “We must all start to write our bottom line with green ink,” he added.
The WBG’s Climate Change Action Plan, released on 7 April 2016, two weeks ahead of the high-level signing ceremony for the Paris Agreement to be held in New York, US, on 22 April 2016, lays out concrete actions to help countries act on their NDCs. In preparation for the Paris Climate Change Conference, where the Paris Agreement was adopted, the Conference of the Parties (COP) to the UNFCCC initiated a process by which countries put forward their “bottom-up” pledges for post-2020 action. These pledges became known as intended nationally determined contributions (INDCs) and, thus far, 189 Parties have submitted INDCs. A country’s INDC will serve as its initial NDC when entering into the Paris Agreement, unless it decides to revise it and submit the updated version upon ratification or acceptance of the Agreement. Although it is hoped that the Paris Agreement will enter into force in 2020, various countries have reported that they are already taking steps to implement their INDCs.
The WBG’s Climate Change Action Plan also aims to, by 2020, assist developing countries in adding 30 gigawatts of renewable energy to the world’s energy capacity, bring early-warning systems to 100 million people, develop climate-smart agriculture investment plans for at least 40 countries and mobilize the private sector to expand climate investments in developing countries. It will thereby contribute to implementing SDGs 7 and 13.
The Climate Change Action Plan is structured around four priority areas: support transformative policies and strengthen institutions; leverage resources through catalyzing private capital and ‘getting prices right,’ which relates to SDG 17 (Strengthen the means of implementation and revitalize the global partnership for sustainable development); scale up climate action through, inter alia, renewable energy and energy efficiency (SDG 7), sustainable mobility, sustainable and resilient cities, which relates to SDG 11 (Make cities and human settlements inclusive, safe, resilient and sustainable), climate-smart land use, water and food security, which relates to SDG 2 (End hunger, achieve food security and improved nutrition and promote sustainable agriculture), and green competitiveness; and work with others and align internal processes and organization.
“Following the Paris climate agreement, we must now take bold action to protect our planet for future generations,” said WBG President Jim Yong Kim, by helping countries increase sources of renewable energy, decrease high-carbon energy sources, develop green transport systems and build sustainable cities for growing urban populations. “The Action Plan will allow us to help developing countries more quickly, and in the areas where support is most needed, such as disaster preparedness, social protection and coastal protection,” commented John Roome, WBG Senior Director for Climate Change. [Bloomberg Press Release] [Future of Energy Summit Webpage] [Michael Liebreich’s Keynote] [EIB Press Release] [Bank of America Press Release] [HSBC Press Release] [WBG’s Climate Change Action Plan] [World Bank Press Release] [World Bank Story on Climate Change Action Plan] [GEF Press Release]