By Leo Leibovitch
Carbon Credit Capital was invited to attend several highlighted events during the Climate Week NYC 2016. On behalf of Carbon Credit Capital, Leo Leibovitch, our Project Director attended those events and here are some observations during the Climate Week.
The Climate Week NYC 2016 was distinguished by a set of events featuring prominent panelists, well represented both by private as well as public sector, engaged in discussing the pertinent issues related to climate change in today’s world. A broad, but insightful general conversation brought about some clear takeaways and calls for leadership from all actors in order to achieve tangible results for a cleaner, greener planet. Climate Week was inspiring in that it brought together people from all sectors who share the same aim: driving climate action, and driving it now.
The Paris Climate Agreement reached in 2015 has invigorated the industry participants, and a clear positive momentum was enthusiastically felt “in the air.” However, now is the time for continuous, specific actions that will cement and build upon that agreement. We all need to “walk the talk.” Currently, 191 countries have signed the Paris Agreement. This is a huge milestone, representing the first time that developed and developing nations from around the world agreed to limit global warming to below 2 degrees Celsius. Next comes the ratification. To date, over 55 countries representing 55% of global emissions have ratified it, and the Agreement will enter into force on November 4, 2016, right before the next UN climate conference, COP22, in Marrakesh. Its participants now have to concentrate on real, tangible actions and engage in building the momentum for implementation.
For this to happen, government policies on various levels must be clear, transparent, fixed for long-term, and decoupled from election cycle dependencies. Sub-national governments, corporations and institutions are not waiting for the green light from global leaders to act. A few regions are already leading such efforts, by introducing fixed Carbon Tax, or further promoting existing cap-and-trade regulations in place. These policies, in turn, enable businesses to align their strategy and planning with their increasingly important sustainability goals.
Hope turns to action around climate change as activities are accelerating at an impressive pace. Here are several takeaways that emerged from the most recent Climate Week events:
Early-Mover Businesses See Clear Advantages in a Low-Carbon Future
The business case for sustainability is clear: the private sector, along with the governments are making a global commitment to have The Paris Agreement eventually lead to a carbon-free or net-zero emissions world. Rising energy prices and extreme weather events (such as the very recent, devastating Hurricane Matthew) pose significant and increasingly recognizable risks to the business and civic communities alike.
However, being climate-conscious is about more than risk mitigation. The CDP estimated that businesses actively dealing with climate-related issues benefit from returns on investment 18% higher than those that do not. Kurt Vogt from HSBC claimed that sustainability is the “investment opportunity of the future,” citing green bonds as one example. There are many new emerging or improving products, services, and markets; the potential business opportunities associated with addressing climate change can be very significant.
Along those lines, many companies took advantage of the Climate Week platform to draw attention to their climate leadership. Bank of America and Apple stated their commitment to running on 100% renewable power. Philips is planning to reach a net-zero carbon footprint by 2020, Siemens – by 2030.
Governments Lead the Way to Green Progress
Leadership is about more than a global commitment, and it was good to see signs of reassurance and enthusiasm for upcoming action on climate change from many parts of the world. US Secretary of Energy, Dr. Ernest Moniz, confirmed continued American leadership on climate, highlighting the nexus of clean energy deployment, energy access, and economic growth in the United States and globally. Morocco’s Minister Delegate in Charge of Environment, Hakima El Haite gave a heartening and inspiring speech calling for a swift shift from negotiation to action in light of hosting the upcoming COP22.
Quebec and Ontario prominently showcased their collaboration with California on cap-and-trade under the Western Climate Initiative, the former highlighting some innovative ways the proceeds from the program were being put to use to promote sustainability initiatives in the province. Mexico also appears to have big plans to potentially join the North America’s growing carbon market.
Collaboration and Innovation Are Key to Unlocking Our Low-Carbon Future
Increasingly banking on the bottom-up approach to solve climate issues, partnerships and collaboration are emerging in every part of the world. Some of these are the Compact of States and Regions, the Carbon Pricing Leadership Coalition, the Alliance for a Sustainable Future, and the Under2MoU, to name a few. Powerful private and public-sector players are joining forces, as they seem to recognize that the whole is greater than the sum of its parts. By sharing information and working together on solutions, together they can scale-up to move more quickly and efficiently on climate change, which, in turn, helps drive innovation.
As climate-friendly practices are increasingly becoming the new business as usual, this hopefulness was echoed in New York, with Jonathan Pershing, Climate Special Envoy, US State Department, stating: “What is next for innovation? Real business opportunities and real social benefits. And hold onto your seats because it is coming fast, which is a good thing because it is crucial to solving the climate problem.”
Where is the Money: The Finance Industry is Buying In
Top financial institutions had a strong presence at Climate Week. There seems to be a universal understanding of the need to mobilize and accelerate enormous amounts of capital to deploy clean technologies while divesting away from carbon-intensive entities, enhance our infrastructure, and improve the productivity of all aspects of our global economy. The World Bank, IFC, YES Bank of India spoke of the potential to unlock billions to trillions of dollars in green investments, all carrying direct environmental benefits as well as significant positive social and economic impact.
Recognizing the opportunity, many corporate players are stepping up their commitments to fight climate change by introducing or reaffirming their goals towards becoming 100% carbon neutral, as announced by the major financial, technology, and manufacturing companies during these events. Carbon Credit Capital has always stood by such actions, as helping businesses to recognize and mitigate their carbon footprint has been at the front and center of the many services we offer.
During Climate Week I took part in important discussions about public-private funding mechanisms for scaling low-carbon innovation, measuring and standardizing green mechanisms, and developing climate-friendly investment portfolios, among other topics. After over 10 years in the environmental finance field, I have never felt more invigorated than I do now. All aspects of it are coming together nicely and momentum is building across governments and the corporate sector in a way that feels that we are finally moving beyond words to real, concrete actions. I am genuinely happy to be part of this.