Private Investors Help Fight Climate Change

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The IPCC 1.5 special report cannot be ignored. Our current pace of environmental degradation will lead to disastrous consequences. Now is not the time to put our heads in the ground and pretend that climate change does not exist. You cannot deny that some force is taking place, changing the inventory of our resources. I remember as a kid growing up in Niagara Falls, the first snow would start early October. Now, snow does not fall in my childhood town until January. Niagara residents would say that rain in October was supposed to be snow and that global warming turned the snow to rain.

Climate change is based on fundamental principles of equilibrium. If a process uses too much of a single resource, nature cannot catch up to replenish what was removed. We experience this principle in our day-to-day activities. Fortunately, we can take action. Through the will of concerned countries, the Paris Agreement was adopted. Delegates from countries committed to the Paris Agreement have gathered at Katowice, Poland for COP24. This meeting of the minds helps push climate change forward, albeit at a slow pace. However, technical, policy and financial experts come together and get the opportunity to address the world their findings.

In the wake of the IPCC 1.5 special report, it is becoming clear that the costs to combat climate change is too great for governments and non-profit financial organizations to bear. Financial experts echo this point of view and call out to private investors to help close the financial gap. After all, we are all in this together.

Financial institutions cleverly developed multiple mechanisms where investors can participate and get good returns. For example, investors can invest in new technology designed to minimize waste or shift to a low-carbon fund portfolio and invest in companies with low carbon emission processes. Financial revolutions occur in numbers, similar to switching to another service provider because of bad customer service, you can choose investments or products with low carbon footprints. Companies must evolve with consumer preferences and will be forced to make changes to stay viable.

Furthermore, ignoring climate change as an investor could expose significant risk and negatively impact returns. The Economist estimated that climate change would incur $4.3 trillion of losses in privately held assets from extreme weather. This means that investing in companies that have not protected their facilities from the effects of climate change may suffer significant costs that directly impact the return on investment.

Traditional methods of investment are no longer the status quo. Consumer demands and market changes must include climate change analysis as part of investment decision making. Although the estimated total investment to meet the 1.5-degree scenario may require up to $3.8 trillion from all parties, market demand and investment strategies are naturally moving to an environmentally conscious economy. We are moving to a place where the environment and the economy are no longer competing forces but can work synergistically. Financial experts are helping to build the mechanisms where the economy can continue to grow and lower pollution at all levels of industry.


China’s Looks to Improve Transparency on Climate Change

Public particip050409_china_protest_bcol7a.standard1ation plays a critical role in environmental discussions. Any good forward-thinking government should act in the best interest of their people. Public participation involves the input of citizens that lead to legislation decision making. Public participation should be a logical step in building trust and holding government officials accountable. Public participation is integral in article 6 of the UNFCCC that enables “public participation in addressing climate change and its effects and developing adequate responses.
Keeping within the spirit of Article 6, developing countries are slowly enabling public participation and education programs that help build awareness of the effects of climate change. China, even though it has a history of significant media censorship, has started campaigning and encouraging the public to learn and speak up on climate change. Today at COP24, the China pavilion hosted a presentation on its efforts to engage the public. Despite the many criticisms China faces in not doing more in combating climate change, one of the positive things about China is that it acknowledges that climate change is real. China has accepted that increased frequency and intensity of natural disasters.
China says that it is campaigning and hosting conferences that raise public awareness and transparency. Chinese media outlets are now implementing initiatives that enable greater access to the public. However, the media has also warned that the public responses should be objective and rational. The Chinese press is also filming a documentary on the effects of climate change in China.
Outside of the media, the Chinese government developed the China Center for Climate Change Communication. The organization is a collaboration between the Research Center for Journalism and Social Development of Renmin University and Oxfam Hong Kong. The organization’s mission is to exchange publications on climate change with other experts and NGOs.
Moreover, China is involved in joint ventures with India in building education programs that teach the value of conservation to young children. The program, called the Smart Cloud Campus Network, seeks to fundamentally change consumption behavior at an early age by developing lessons and activities that encompass the principals linked with the 17 elements of the SDGs published by the UNFCCC. The program’s secondary goal is to move towards making campuses carbon neutral.
China invited Greenpeace Poland to the discussion and served as a case study in which China hopes to follow in the same manner. Fifteen years ago, Polish citizens had no concept of renewable energy, nor the idea of climate change. Ten years of public awareness has started to shifted public perception favoring clean energy solutions. Surveys conducted recently in Poland show that 69% of the public wants to quit coal by 2030. The main message that helped initiate public climate action discussions by shifting from the climate change to human tragedies that affect community can also happen to us.
At negotiation sessions at COP24, China’s comments and suggestions subtly give away its position to build in flexibility allowing a balance between economic growth and climate change. Although China is known for suppressing negative stories and opinions to save face, we must give China an opportunity of good faith to make good on its promises. After all, can you name a country who has not censored speech against its citizens? China’s commitment to climate change appears sincere. I hope they don’t disappoint us.

Logistics Logistics Logistics! Highlighting Technology Needs Assessment for Developing Countries

As the Paris AgTNA-logo_rgbreement parties continue to meet and deliberate legal provisions, supporting organizations put in place tools that help developing countries meet their respective Nationally Determined Contributions (NDCs). A non-governmental organization is one of the amazing things about the Paris Agreement, COP, or climate change in general. Citizens from all over the world don’t need to wait for government action and can operate independently. NGOs can hit the ground running, enacting change, and are sometimes more effective than governments who need to navigate foreign affairs carefully. What is even more impressive about NGOs is their ability to adapt. Like any successful story, you need to fail. It was through this process that led the UN development program (UNDP) in creating the Technology Needs Assessment (TNA) tool for developing countries.

TNA streamlines the process of determining appropriate technologies to supply developing counties to combat climate change. Choosing the right technology is an important issue because it gradually builds the capacity of the developing country. Sometimes we are too quick to solve a problem and look to the most efficient solution. However, the answer may be too complicated for the developing country to maintain, once the experts have left. The TNA address this problem. The TNA is a three-step process that conducts a feasibility study and selects the appropriate environmental controls.

Step one is a holistic background study that looks to multiple sectors including gender. The first step helps prioritize available technologies that can be applied. Step two conducts a feasibility study or barrier analysis of each technology. Since developing countries circumstances are different, experts must carefully examine the technique. The third step is called the technology action plan and supports “the implementation of the pritorized technology.” The level of ambition, timelines, schedules, and education are carefully implemented and contributes to reaching the developing country’s NDC.

Moreover, the TNA tool is so effective that, successful application of the analysis enhances the opportunity to obtain funding to construct the project. So, to the organizations that help make pragmatic steps that help lay down the right tools, keep up the good work.


BURs: One Small Decision Leads to Surprising Results!

The Enhanced Transparency Framework (ETF) is a hot topic at COP24. At the conclusion of COP24 is the deadline for all parties to put their heads together, develop, and finalize provisions for the modalities, procedures and guidelines (MPG) of the ETF. The MPGs might supersede and replace the current transparency framework called measurement, reporting, and verification (MRV). Completion of the MPGs marks a significant milestone for the Paris Agreement. Anticipation to see the final provisions and roll out of the MPGs has already caused ripple effects when it comes to reporting.

The UNFCCC cannot help but celebrate the ongoing progress in transparency. The UNFCCC is observing the fruits of all party’s efforts, despite some resistancbur1_552e, through increase rates of party participation in submitting annual reports, specifically Biennial Update Reports (BURs). The BUR was the brain child of PA parties committed to climate change at COP17 in 2012. BURs are reports submitted by non-Annex I parties. BURs generally contain updates to GHG inventories, mitigation actions, status, needs and support. BURs should be submitted every two years at the time of the first submittal. Least developed country parties (LDC) have the flexibility to submit their first BUR at their discretion. The BURs are purely collaborative and peer-reviewed by international consultation and analysis (ICA). The ICA is made up of teams of experts that consist of PA parties.

Although BURs on their face may not appear to be an exciting process, parties’ implementation, feedback and lessons learned have exciting benefits. At COP24, the UNFCCC hosted a side event which showed the progress of BURs and featured case studies from Brazil and China.

As of today, the UNFCC has received a total of 66 BUR reports. Recent submissions from Brazil and China help serve as ideal case studies for other non-Annex I parties.

When Brazil started preparing its BUR report, little did it know that the BUR would significantly enhance government workflow and increase environmental awareness. Brazil’s Ministry of Foreign Affairs led the BUR report and quickly learned the logistical nightmare and resources needed to complete the report. Brazil’s BUR report took about a year to complete. However, after the report was submitted, Brazil conducted a lessons learned exercise and found surprising results. Brazil learned that preparation of the BUR improved communication and exchange between ministries. Brazil’s Ministry of Foreign Affairs (MOFA) engaged with energy and agriculture agencies, which were unfamiliar with the UNFCCC and the BUR. The MOFA encouraged these officials to participate in BUR workshops and in turn the agencies spurred investigation and internal discussion adopting environmental initiatives in their respective agencies.

China’s BUR had similar benefits compared to Brazil. Lessons learned after China’s first BUR submission revealed adoption of procedures that heightened internal quality assurance and control. Additionally, China started building a national system to archive environmental and climate change data. Even more impressive, China pushed past its reluctant disposition and started sharing emission factor data and best practices with the ICA. China is in progress in submitting its second BUR report and is excited to see the differences from its first report.

The BURs play a key role in helping developing countries establish environmental reporting procedures. BURs can also have the indirect effect of facilitating government cohesion between agencies and pushing countries down a greener path.


A New Mitigation and Adaptation Tool: Low Emission Development

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Today is the first day of COP24! Technical experts and policymakers come from around the world with one goal in mind – progress. Progress in building solutions that give us that extra step toward a solution to climate change. There is no one solution, and discussions occur at multiple fronts over a range of topics.

The decision in COP21 started a shift toward low emission development (LED), which seeks to fundamentally change human behavior as well as industry practices to seek ways to minimize emissions. LED utilizes both mitigation and adaptation strategies. LEDs are also flexible where they can integrate with other planning tools and strategies. Successful execution of LED varies by country but has been widely known to depend on three factors: participation, prioritization, and implementation. Now at COP24, the LED project is bearing fruit. Tunisia successfully implemented LED and now serves as a case study for other counties to benchmark from.

One reason why Tunisia was so successful in adopting LED was that it simultaneously campaigned for public participation, petitioned to political powers, and targeted the youth. Early involvement of stakeholders is key to gain LED traction. LED is best approached by lobbying. Tunisia hosted workshops for the public and designed activities for children to learn the value of conservation. Tunisia’s approach propelled LED to the point where Tunisia added language combating climate change into its constitution!

The second factor requires careful prioritization and scheduling. LED is data heavy and inputs vary significantly depending on the country conditions and available resources. For some developing countries, LED may not be cost effective to implement. However, case studies like the success in Tunisia help strengthen viable LED strategies. Over time, as the LED strategy matures, LED becomes scalable and ultimately lowers the costs in its implementation.

The final and most difficult factor is implementing the LED. Implementing the LED can be messy because it requires careful coordination of multiple stages. The best way to overcome obstacles from implementation is to maintain good record keeping practices and concurrently build the institutional framework creating LED laws and regulations. Establishing the institutional framework helps build trust and hold the parties accountable. This cross-government work is critical to support LEDs.

Moreover, LED is attractive because it works synergistically with any economy. LEDs focuses on national priorities for sustainable development and simultaneously serves as a road map that spurs economic development by driving the economy in minimizing waste and pollution. LEDs are known to guide diversification of an economy.

Finally, LEDs is a pathway for funding and capacity needs. Since LEDs apply both mitigation and adaptation tools, LEDs can benefit stakeholders and prepare the National Adaptation Programmes of Action (NAPAs) that help qualify for the Least Developed Countries Fund (LDCF). LEDs can be eligible for numerous financial sources such as the World Bank ESMAP, US Country Studies program, and “fast start” funding under the UNFCCC.

Tunisia has already implemented the LED strategy in February 2018. Ukraine, Guyana, Indonesia, Mexico, and the UK have already adopted LED strategies, and more parties are following suit.


RE100 Businesses Pave the Way for Transitioning to Renewable Energy

images Ambition, pace, scale—these are the themes in shifting to an economy recognizing climate change. Companies pioneering this economic shift incorporated climate change as an significant factor in conducting business.

One of the leading organizations spearheading this movement is RE100. RE100 is a collaborative movement uniting over 150 well recognized companies across the world to commit to using 100% renewable energy. What is even more impressive is that these companies have acted on their own in addressing climate change, ahead of government direction. Remarkably, these corporations were able to shift to 100% renewable electricity, which garnered a competitive advantage enabling them to financially outpace their competitors.

A study by RE100 and Capgemini compared RE100 companies to non-RE100 companies by sector. It concluded that RE100 companies earn an average profit of 7.7% more than their competitors. Admittedly, the report’s analysis in no way suggests that switching to 100% renewable electricity is the sole cause of the profit difference. However, it is compelling that all RE100 companies have consistently outperformed the competition in their respective industries. Thus, it would suggest a strong correlation between switching to renewable electricity and above-average financial performance.

The switch to renewable electricity is done using multiple mechanisms simultaneously. Companies utilize a combination of energy power purchase agreements (PPA) and self-generated renewable electricity technology. Moreover, RE100 companies have developed new management structures, such as silo model, centralized model, and global model, to coordinate renewable electricity sourcing and efficient use infrastructure. The benefits of transitioning are significant.

For example, General Motors harnessed renewable energy sources from landfill gas, solar arrays, and wind farms. This combination has lowered operation costs by $80 million. The cost savings result largely from improved, cost-effective renewable technologies and government incentives. Landfill gas allows companies to lock into long-term prices that are cheaper and more stable than fluctuating natural gas prices. GM strategically built their own solar arrays and benefited from government feed-in-tariff programs. Finally, GM built wind projects in Mexico and Texas that generate over 34 MW, enough to power five manufacturing facilities.

Anheuser-Busch, another RE100 company, has procured PPAs for onshore wind projects to offset its dependence on traditional energy sources. Anheuser-Busch is in line to become the largest purchaser of renewable electricity and one of the forerunners in advertising renewable energy. The beer manufacturer uses its brand influence in its renewable electricity symbol campaign, where every pack of Budweiser will carry the symbol to celebrate its commitment to brew with 100% renewable energy.

The trend toward renewable energy is now gaining traction, and signals a tipping point to mass renewable. Since RE100’s inception, companies partnered through renewable energy purchase agreements have created 100% renewable energy demand of more than 184.6 TWh—enough energy to power Poland. Moreover, RE100 company surveys yielded that renewable energy costs have reduced significantly where it has been cost competitive against fossil fuels. Therefore the RE100 momentum would suggest that this trend is welcomed with open arms and significantly contributing to how other companies shape their tactics to address climate change.


The Paris Agreement and the Green Economy

imagesThe adverse impacts of climate change are no secret. We are constantly reminded of the gloomy consequences that will arise at our continued rate of consumption without significant intervention. It is predicted that growing wage gaps combined with climate change will cause over 100 million people to fall into poverty. Moreover, this alarming statistic could impact the well being of children in Africa and Asia, causing 120 million to suffer from malnourishment by 2030. Current projections indicate that our urban footprint will likely triple, demand for food will increase by 35%, and the world’s water needs are expected to rise by 40%.The adverse effects of climate change are not exclusive to impoverished and marginalized communities. By 2030 global economic loss is expected to reach 3.2%, indicating that even the private sector is not immune.

With the Paris Agreement, the paradigm shifted to place international focus on the transition from a traditional economy to a green economy ̶ meaning one that recognizes the relationship between environmental sustainability, economic development, and climate change. Under the Paris Agreement, countries must submit their Nationally Determined Contributions (NDCs) to mitigating global climate change while operating within their national environmental and economic objectives. These NDCs set national targets by utilizing mitigation and adaptation mechanisms. Cumulatively, the commitments established by each country aim to meet the Paris Agreement’s objective of holding the increase in global temperature to “well below 2⁰C.” The implementation of mitigation and adaptation mechanisms require funding and corporate involvement to perform the work. In this manner, the Paris Agreement has propelled the green economy forward. As United Nations Secretary-General Antonio Guterres recently stated, “Those that will be betting on the implementation of the Paris Agreement, on the green economy, will be the ones that have a leading role in the economy of the 21st century.

The International Labor Organization (ILO) announced in its annual report, World Employment and Social Outlook 2018: Greening with Jobs, that 24 million new “green” jobs will be created globally by 2030. Likewise, within the same timeframe, the green economy is anticipated to offset predicted economic losses in traditional industries. The drastic advancements in renewable energy technology and innovation also support this assertion.  For instance, more development in solar and hydroelectric energy technology reduced the demand for coal-based energy in many countries. In addition to this, industry leaders such as Microsoft and Amazon developed cloud-based computing services that enable small companies to reduce 90% of their CO2 footprint. What is even more impressive is that the green economy’s net-worth now exceeds that of the fossil fuel sector (6% of the global stock market), according to a report by FTSE Russel. All of which lends credence to the words of ILO Deputy Director-General, Deborah Greenfield, who insisted that the green economy “can enable millions more people to overcome poverty and deliver improved livelihoods.”

Without a doubt, the green economy’s momentum shows no signs of stopping and has grown to exceed $1 trillion USD. However, this raises the question of how well-prepared are countries to handle the transition to a low-carbon economy. It is important to note even the green economy must be properly guided with the right policies.  The aggregate collaboration from countries committed to the Paris Agreement is promising, and could provide the impetus for such guidance and direction for a sustainable economic shift. Only time will tell.