Abby L. Harvey
GHG Monitor
12/4/2015
The 21st Conference of Parties to the United Nations Framework Convention on Climate Change saw a large focus placed on money in its first days, with several significant funding announcements made this week in Paris. Several governments, as well as private sector entities, have indicated their intentions to commit millions of dollars to climate change mitigation and adaptation in developing countries and the development of clean energy technologies. Also notable is where money will not be going; two major banks announced plans to move away from financing coal projects, and numerous cities and organization have declared their intentions to divest from such projects.
In one of the first major announcements made Monday, the opening day of the two-week conference, the governments of Canada, Denmark, Finland, France, Germany, Ireland, Italy, Sweden, Switzerland, United Kingdom, and the United States committed notable contributions to the Least Developed Countries Fund (LCDF) a climate fund hosted by the Global Environment Facility (GEF). The U.S. contribution totals $51.175 million in 2015 and 2016. “America confirms our strong and ongoing commitment to the Least Developed Countries Fund,” President Barack Obama said at the COP.
The LDCF is intended to address the adaptation needs of the least developed countries, focusing on reducing the vulnerability of sectors such as water, agriculture, food security, and infrastructure. Specifically, it funds National Adaption Programs of Action (NAPAs), which provide information concerning the nations’ adaption priorities. “NAPA implementation projects under LDCF are designed entirely in accordance with country priorities and executed by national stakeholders, and involving active participation of vulnerable communities,” according to an LDCF fact sheet.
Ambassador Nozipho Mxakato-Diseko from South Africa, speaking on behalf of the Group of 77, a coalition of developing nations, while welcoming the announcement, said the fund “has remained under-resourced for a long time, despite repeated calls for contributions.”
Mxakato-Diseko also noted that such contributions are required of developed countries under the convention. “This is a legal obligation under the convention. It is neither ‘aid’ nor ‘charity,’ nor is it the same as development assistance. Finance support from developed countries relates to the impacts of historical emissions, which will only get worse with time for developing countries,” Mxakato-Diseko said.
Germany, Norway, Sweden, and Switzerland announced a new $500 million initiative to find new ways to create incentives aimed at large-scale cuts in greenhouse gas emissions in developing countries to combat climate change. The “Transformative Carbon Asset Facility,” supported by the World Bank Group, is intended to assist developing countries in reducing emissions through collaborative efforts “to create new classes of carbon assets associated with reduced greenhouse gas emission reductions, including those achieved through policy actions,” the group announced. The new initiative is planned to start operations in 2016.
“Putting market forces to work is an efficient way of reducing emissions. We expect to achieve significant impact on the ground through the facility and ensure the sustainability of reducing emissions even beyond the facility’s initial support, for example, through carbon pricing instruments like emissions trading systems and carbon taxes, or stronger low-carbon policy standards and their enforcement,” said Norwegian Prime Minister Erna Solberg in a release announcing the initiative.
Clean Energy Development Receives Public, Private Support
A public-private partnership dubbed “Mission Innovation” was announced Monday by the governments of Australia, Brazil, Canada, Chile, China, Denmark, France, Germany, India, Indonesia, Italy, Japan, Mexico, Norway, Republic of Korea, Saudi Arabia, Sweden, the United Kingdom of Great Britain and Northern Ireland, the United Arab Emirates, and the United States.
Under the initiative, the governments have committed to double their investment in clean energy innovation and work closely with the private sector as it increases its investment in the earlier-stage clean energy companies that emerge from government research and development programs, among other efforts, according to the joint announcement.
The private sector arm of the initiative is headed by Bill Gates and has been titled the “Breakthrough Energy Coalition.” Notable participants include Jeff Bezos of Amazon, Richard Branson of Virgin Group, Tom Steyer of NextGen Climate, Meg Whitman of Hewlett-Packard, and Mark Zuckerberg and Priscilla Chan of Facebook and the Primary School, respectively.
“The leap forward is going to take much more than pledges for development assistance from governments. It’s going to take private sector efforts and a commitment to innovation, and the capital to keep driving down the cost of clean energy all around the world,” Obama said of the initiative.
Investors Move Away from Fossil Fuels
While developing countries and clean energy innovation are receiving more funding, the first week of the COP has seen a shift away from fossil fuel investment. According to 350.org and Divest-Invest, organizations coordinating a growing fossil fuel divestment campaign, more than 500 institutions representing over $3.4 trillion in assets have made some form of divestment commitment.
Two major banks, Wells Fargo and Morgan Stanley, issued policy statements that signaled a move away from financing coal-related projects. Wells Fargo committed to reducing its lending to coal mining companies while Morgan Stanley pledged to cut the percentage of energy financing that goes to coal mining and coal-powered electricity plants and to shift lending and capital raising toward cleaner and renewable energy sources.
The company will no longer finance certain forms of mining and will no longer support projects in the U.S. and other developed countries that would result in the development of new or modified coal-fired power generation, unless there is carbon capture and storage or similar emissions and pollutant reduction technology involved, the policy statement says.
