Climate finance was at the core of the discussion among leaders who gathered for the UN Climate Summit in New York, and the New Climate Economy report, presented by the Global Commission, has set the numbers we have to confront with when it comes to talking about financing.
According to this report “maintaining or strengthening economic growth until 2030 will require a significant increase in investment, including an estimated cumulative US$89 trillion of investment in infrastructure”. In order to make this economic growth sustainable, increased investments are needed in energy efficiency and low carbon technologies for an estimated total of additional US$ 13.5 trillion, the report highlights.
The question is: did the Summit provide an answer to this huge financial challenge?
The UN Secretary General asked leaders to present in New York clear and quantifiable commitments on climate finance, and he has been quite successful.
Governments, Investors and Financial Institutions announced the mobilization of about US$200 billion by the end of 2015 to support climate action. In addition to the initial pledges of about USD$2.3 Billion from contributing countries for the capitalization of the Green Climate Fund, there has been a very positive response from the financial and private sector side.
A coalition of institutional investors, named AP4, committed US$100 billion of institutional investments to reduce the carbon footprint and to measure and disclose the carbon footprint of at least US$500 billion in assets under management. In addition, three major pension funds from North America and Europe announced $31 billion acceleration in low-carbon investments by 2020.
Commercial banks also committed to US$30 billion in new climate finance by the end of 2015 by issuing green bonds and other innovative financing initiatives.
The insurance industry has 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 ten times the current amount, by 2020.
IDB President Luis Alberto Moreno, who participated as a speaker in the Summit, confirmed the strong commitment of the IDB to continue to deploy financial resources for mitigation and adaptation investments to the Latin America and the Caribbean region and reaffirmed the target of achieving a 25% lending target for climate and sustainability related operations to be achieved by 2015.
There is still a way to go to cover the trillion figures, but it looks like that the Summit helped us to get on the right track to achieve sustainable economic growth.
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