Climate change and new green investment policy framework

 Co-chair Sustainable Development Commission – United Nations

In recent years, climate change has been the subject of a great deal of political controversy. As scientific knowledge has grown, this debate is moving away from whether humans are causing warming and toward questions of how best to respond. Signs that the Earth is warming are recorded all over the globe. The easiest way to see increasing temperatures is through the thermometer records kept over the past century and a half. Around the world, the Earth’s average temperature has risen more than 1 degree Fahrenheit (0.8 degrees Celsius) over the last century, and about twice that is parts of the Arctic. 

There is no doubt that is the astonishing weather experienced by the world last year and advances in climate science prove conclusively that fossil fuel emissions are causing global warming and something must be done about it. 

This doesn’t mean that temperatures haven’t fluctuated among regions of the globe or between seasons and times of day, but if you average out the temperature all over the world over the course of a year, you see that temperatures have been creeping upward. It is vital that ” the Paris Agreement’s” implementation becomes a reality and that guides the global community in addressing climate change by curbing greenhouse gases, fostering climate resilience and mainstreaming climate adaptation into national development policies. 

Tackling climate change

Successfully tackling climate change requires urgent policy action across countries to scale-up and shift public and private sector investments towards low-carbon, climate-resilient infrastructure. An integrated framework with clear and stable climate policies, sound investment policies and targeted financial tools and instruments is essential to overcome barriers to private sector investments and address market failures. Scaling up climate finance to developing countries is a priority. This will require strengthened measurement, reporting and verification (MRV) systems to raise accountability and transparency, and improved country systems to use climate finance effectively. Governments have a central role to play to mobilise capital to low-carbon, climate-resilient (LCR) infrastructure in the establishment of reform agendas that deliver “investment grade policies”. To address barriers to LCR infrastructure investment, climate change policies and their effectiveness need to be considered in a broader national policy context, including the enabling environment for investment and development. We have to set up and develop the elements of a “green investment policy framework” to help governments create and improve domestic enabling conditions to shift and scale up private sector investments in green infrastructure.

Policy framework

This policy framework can guide domestic reforms to steer use of limited public funds while also enabling and incentive’s private investment to simultaneously deliver climate change and local development goals. The proposed approach towards a green investment policy framework consists of five elements are: 

1) Setting goals and aligning policies across and within levels of government. This includes: clear, long-term vision and targets for infrastructure and climate change; and policy alignment and multilevel governance, including stakeholder engagement. 

2) Reforming policies to enable investment and strengthen market incentives for LCR infrastructure investment. This includes: sound investment policies to create open and competitive markets; and market-based and regulatory policies to “put a price on carbon”, remove fossil-fuel subsidies and correct market failures. 

3) Establishing specific financial policies, regulations, tools and instruments that provide transitional support for new green technologies. These include: financial reforms to support long-term investment and insurance markets; innovative financial mechanisms to reduce risk or increase market liquidity; and transitional direct support for LCR investment. 

4) Harnessing resources and building capacity. This includes R&D for green technology; human and institutional capacity building to support LCR innovation; monitoring and enforcement; and climate risk and vulnerability assessment.

5) Promoting green business and consumer behaviour. This includes information policies, corporate reporting and consumer awareness programmes, and public outreach. We need to act promptly to mitigate its effects, and how each of us can contribute to a solution.

We need to act promptly to mitigate its effects, and how each of us can contribute to a solution.