Small island country steps forward to unite world behind climate action

It has been a year of catastrophic weather events. Rains of biblical proportions across South Asia caused flooding that affected more than 41 million people and killed at least 1,200. Unprecedented hurricanes claimed lives and destroyed infrastructure in several island states Caribbean and in towns and cities in the southern United States. Drought in Africa has put 20 million people in Somalia, South Sudan, Nigeria and Yemen at risk of starvation. And for the third year in a row, countries with coral reefs – from East Asia and the Pacific to North Africa – have seen entire swathes of their reef systems die due to heat stress from too high ocean temperatures.

All of these events around the world cry out the same warning: and achieve the goals of the Paris Agreement. At this year’s UN climate COP in Bonn, Germany, the call to action found an ideal champion in the Fijian government, making history as the first small island state to occupy the presidency and to organize the negotiations.

Since the signing of the Paris Agreement in 2015, many positive steps have been taken to accelerate climate action globally. According to the International Energy Agency, global energy-related carbon dioxide emissions remained stable for the third consecutive year in 2016, even as the global economy grew – evidence of continued decoupling of emissions of economic activity. Global markets are undergoing a significant transformation led by renewable energy, thanks to rapidly falling costs for solar and wind power, with batteries playing an increasing role in balancing supply and demand. And carbon pricing is gaining momentum globally, with more than 40 national jurisdictions and 25 subnational jurisdictions now imposing a price on carbon pollution.

A focus on mobilizing finance for climate action

Meeting the climate commitments of the Paris Agreement will require investment at unprecedented speed and scale. That is why The fact is that there is plenty of private financial capital available, but most of it generates low or even negative returns. For many reasons, including weak policy environments and a lack of risk reduction instruments such as guarantees, this capital is not necessarily going to where it is most needed for climate action.

One approach to help unlock this capital is the recently launched Invest4Climate initiative: a new platform convened by the World Bank and the UN, designed to bring together national governments, financial institutions, investors, philanthropists and banks. to find ways to support climate transformation. investments in developing countries.

Green bonds are also part of the financing solution by raising funds in the capital markets for climate investments in developing countries. The World Bank Group, through the World Bank and IFC, has played a leading role in developing the green bond market by raising more than $15 billion in green bonds since 2008 for investments in climate action around the world, and helping to develop market best practices for standards and reporting. The World Bank and IFC are working with countries to put in place frameworks for sovereign and private green bond issuance. Last month, with help from the Australian government and the World Bank Group, Fiji became the first emerging market to issue a sovereign green bond, raising Fiji$100 million, or $50 million, to support the mitigation and adaptation to climate change.

A key element of the Paris Agreement was country-level commitments to action, known as Nationally Determined Contributions or NDCs. Each NDC commits countries to a series of actions aimed at reducing their emissions and building resilience to the impacts of climate change. For its part, the World Bank Group supports around 300 initiatives in 77 countries related to the implementation of the NDCs through investments in areas such as energy, agriculture and transport. And thanks to the NDC Partnership Support Facility launched at COP22 in Morocco in 2016, more than $8 million in grants are now disbursed to an initial set of 23 countries for technical assistance, capacity building and development. project action related to NDCs.

And through the Climate Action Peer Exchange or CAPE – Ministries of Finance in developing countries are sharing their knowledge on how to address the fiscal challenges of implementing NDCs. A recent CAPE workshop in Shanghai brought together finance ministry staff from 13 countries to discuss approaches to carbon taxes, the application of tax risk assessment models and the establishment of systems. climate budgeting.