Business Community Ready To Do Its Part To Catalyze Low-Carbon Global Economy
PARIS – Every day here at the UN climate talks, we’re hearing new private sector commitments to catalyze the low-carbon global economy.
The week began with Bill Gates and other capital titans launching a $2 billion “Breakthrough Energy Initiative,” an effort with 20 countries, including China, India and the United States, to accelerate carbon-free energy sources. Then Google announced it was adding another 842 megawatts of renewable energy capacity to power its ever-expanding global data center portfolio. And, just today, New York State Comptroller Thomas DiNapoli, who oversees a $173 billion investment portfolio, announced a $3.5 billion climate commitment, including the launch of a $2 billion low-carbon index fund in partnership with Goldman Sachs.
The message is clear: global businesses and investors are committed to the low-carbon future. From iconic companies like Google, Apple, Mars and Ikea, to major financial institutions like Bank of America and Citi, the private sector is opening their wallets to turn ever-ripening clean energy opportunities into reality.
And they’re looking to invest in all corners of the world – a key reason why renewable energy investments in developing countries are growing 10 times faster than in developed countries. In just the past few months, Google and Apple have announced major renewable energy projects in China, Kenya and Chile.
It’s encouraging, too, that developing countries themselves are working hard to attract more clean energy investments. The 184 countries that declared their climate ambitions in the lead-up to COP21 – the countries that account for 97 percent of global GHG emissions – is a hugely important market signal.
But it’s only a partial signal.
Achieving the bold ambitions in developed and developing countries will require trillions – not billions – of investments. Investors and businesses are ready to provide the money, but they need clearer, long-term policy signals.
Which brings me to the ongoing negotiations in Paris: we need a robust and ambitious deal that clearly lays out a trajectory of global low-carbon economic development.
Among the keys is satisfying the Copenhagen pledge to mobilize $100 billion per year of climate finance by 2020 to address the needs of developing countries. Developing countries are legitimately asking for equitable finance, and it must be at the heart of a final agreement.
Another cornerstone is durability and longevity. The agreement needs an unambiguous and ambitious long-term goal, including five-year reviews to strengthen countries’ commitments.
More than 400 global investors collectively managing $24 trillion in assets called for exactly this in a call to action issued to government leaders.
“Stronger political leadership and more ambitious policies are needed in order for us to scale up our investments,” the investors wrote. “We believe that well designed and implemented policies would encourage us to invest significantly more in areas such as renewable energy, energy efficiency, sustainable land use and climate resilient development.”
Put simply, if governments can provide billions of financing and deliver an ambitious final agreement, investors and businesses will unlock the trillions.
And that will be a win-win for everyone in putting the world on sustainable path for the climate and the global economy.