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COP23 Fertilizes Climate-Smart Agriculture

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COP23 leaders, from left: UNFCCC Executive Secretary Patricia Espinosa of Brazil; President Emmanuel Macron, France; Frank Bainimarama, prime minister of Fiji and COP 23 president; Chancellor Angela Merkel, Germany; and UN Secretary-General António Guterres at the opening of the High-Level Segment of the conference, November 15, 2017 (Photo courtesy Earth Negotiations Bulletin) Posted for media use

By Sunny Lewis

BONN, Germany, November 21, 2017 (Maximpact.com News) – New commitments and initiatives in the agriculture and water sectors were announced as nearly 200 countries gathered at the United Nations Climate Conference (COP23) hosted by the government of Fiji in Bonn, November 6-17.

Delegates made concrete progress on turning the historic 2015 Paris Agreement into action on the ground across the world, ahead of next year’s UN climate conference in Katowice, Poland.

COP23 delegates aimed at motivating greater climate action by public and private stakeholders as the Paris Agreement, adopted in 2015, enables countries to combat climate change by limiting the rise of global temperature below 2 degrees Celsius and strive not to exceed 1.5 degrees Celsius higher than pre-industrial levels.

About one degree of that rise has already happened, increasing the pressure on governments and the private sector to progress further and faster to cut the greenhouse gases responsible for global warming.

For the first time in the history of UN climate negotiations, governments reached an agreement on agriculture that will help countries develop and implement new strategies to both reduce emissions from agriculture and build resilience to the effects of climate change.

“Agriculture is a key factor for the sustainability of rural areas, the responsibility for food security and its potential to offer climate change solutions is enormous,” said Christian Schmidt, Germany’s federal minister of food and agriculture.

Investing more quickly and broadly in agricultural climate action and to support the sustainable livelihoods of small-scale farmers will unlock much greater potential to curb emissions and protect people against climate change, sector leaders and experts said.

New COP23 initiatives include a US$400 million fund established by the Government of Norway and the corporation Unilever for public and private investment in business models that combine investments in high productivity agriculture, smallholder inclusion and forest protection.

The European Investment Bank will provide US$75 million for a new US$405 million investment program by the Water Authority of Fiji. The plan will strengthen resilience of water distribution and wastewater treatment following Cyclone Winston, the world’s second strongest storm ever recorded, which hit Fiji in February 2016.

The Green Climate Fund (GCF) and the European Bank for Reconstruction and Development signed up to free US$37.6 million of GCF grant financing in the US$243.1 million Saïss Water Conservation Project to make Moroccan agriculture more resilient.

The nonprofit World Resources Institute announced a landmark US$2.1 billion of private investment to restore degraded lands in Latin America and the Caribbean through Initiative 20×20.

“Climate change is a fundamental threat to the Sustainable Development Goal 2 that aims to end hunger, achieve food security and improve nutrition,” said José Graziano da Silva, director-general of the UN’s Food and Agriculture Organization (FAO)  at a high-level event on hunger at the conference.

“To achieve SDG2 and effectively respond to climate change, we require a transformation of our agriculture sectors and food systems,” he said.

According to FAO’s “State of Food Security and Nutrition in the World 2017” report, hunger has grown for the first time in over a decade, mainly due to conflicts and climate change. An estimated 815 million people are now hungry.

Extreme climate impacts come down hard on small-scale farmers and pastoralists as well as fishing and forest communities, who still provide the bulk of the planet’s food.

Supporting these communities with innovative solutions to reduce their emissions and protect their communities meets many of the objectives of every one of the 17 Sustainable Development Goals.

Over 70 percent of the world’s extreme poor live in rural areas. They are also the most vulnerable to hunger and malnutrition, natural resource scarcity, conflict, and climate impacts.

“The rural poor are part of a comprehensive response to climate change,” said da Silva. “They are key agents of change who need to be strengthened in their roles as stewards of biodiversity, natural resources and vital ecosystem services.”

Requests to direct more resources to the agriculture sector as a key strategy to meet the goals of the Paris Climate Change Agreement and the 2030 Agenda for Sustainable Development were made during Agriculture Action Day November 10.

“Countries now have the opportunity to transform their agricultural sectors to achieve food security for all through sustainable agriculture and strategies that boost resource-use efficiency, conserve and restore biodiversity and natural resources, and combat the impacts of climate change,” said René Castro, FAO assistant-director general.

In the livestock sector, for example, FAO estimates that emissions could be readily reduced by about 30 percent with the adoption of best practices.

At COP23, the FAO released a new “Sourcebook on Climate-Smart Agriculture,” which recommends scaling up public and private climate finance flows to agriculture, spurring public-private partnerships, strengthening a multi-sector and multi-stakeholder dialogue, investing in knowledge and information, and building capacity to address barriers to climate action.

The book features knowledge and stories about on-the-ground projects to guide policymakers and program managers to make the agricultural sectors more sustainable and productive, while contributing to food security and lower carbon intensity.

The COP23 meeting agreed that land needs to be managed in ways to increase soil carbon, particularly in grasslands, and that robust protocols for assessing and monitoring carbon stocks need to be developed with stakeholders.

Rehabilitating agricultural and degraded soils can remove up to 51 billion tonnes of carbon from the atmosphere, according to some estimates.

For the livestock sector, FAO estimates that emissions could be readily reduced by about 30 percent with the adoption of best practices.

Tom Driscoll, director of conservation policy with the U.S. National Farmers Union, says, “Farming is one of the few professions with the ability to not only reduce ongoing greenhouse gas emissions, but to also remove existing greenhouse gases from the atmosphere. National Farmers Union supports policies and programs that maximize agriculture’s GHG elimination potential by offering value to farmers for either climate-smart or emissions-reducing and carbon-sinking production and conservation practices.”

Cap-and-trade programs, which limit ongoing emissions from major sources of greenhouse gas emissions, are one means of offering farmers value for climate-smart practices.

Cap-and-trade programs can drive emissions reductions where they can happen in the most cost-effective manner, and farmers can often achieve emissions reductions and sequester atmospheric greenhouse gases for less money than the emitters these programs primarily regulate, says Driscoll on the NFU website.

The state of California has implemented a cap-and-trade program that allows for the creation and transfer-for-value of offset credits that meet regulatory criteria. Regulated entities may meet up to eight percent of their triennial compliance requirements by purchasing these credits.

In California, each credit must be quantified using a compliance offset protocol approved by the California Air Resources Board. Currently, ARB will approve credits some U.S. farmers create by capturing and destroying methane from manure management systems.

The Climate and Clean Air Coalition (CCAC), an organizer of COP23’s Agriculture Action day, announced that the Coalition will work in the next few years to create the conditions for greater agricultural climate action.

The voluntary partnership of more than 100 governments, intergovernmental organizations, businesses, scientific institutions and civil society organizations aims to help give countries the confidence to set realistic yet ambitious targets through the next revision of their national climate plans – the Nationally Determined Contributions.

“Agriculture is a large source of powerful greenhouse gases like methane and other short-lived climate pollutants but has great potential to store carbon and reduce greenhouse gases in our lifetime, that’s why we support and advocate for countries to improve their livestock emissions inventories,” said Helena Molin Valdes, head of the CCAC Secretariat.

CCAC partners signed onto the Coalition’s Bonn Communiqué which prioritizes initiatives to reduce methane and black carbon emissions from agriculture and municipal solid waste.

These initiatives support broader efforts to reduce air pollution, end hunger, and build sustainable cities and communities, while helping to limit global warming.

James Shaw, New Zealand Minister for Climate Change, said he was pleased with the Communiqué’s focus on agriculture as it was a large source of his country’s greenhouse gases.

“We hope this encourages partners to develop policies to reduce emissions from agriculture, while at the same time improving the productivity, resilience and profitability of farmers,” said Shaw.

Other agriculture-based solutions for addressing climate change were also presented at COP23. Discussions involved people from governments, civil society, the private sector, small scale and young farmers centered on livestock, traditional agriculture systems, water, soil, food loss and waste, and integrated landscape management.

Among the recommended actions and initiatives were to:

  • Scale up public and private climate finance flows to agriculture, and use them in a catalytic manner. Climate finance flows continue to favor mitigation over adaptation, and focus overwhelmingly on energy systems and infrastructure. These imbalances should be addressed.
  • Incentivize public-private partnerships. Strong dialogue and collaboration between the public and private sectors is key to ensure alignment between public policy and private sector investment decisions in agriculture and throughout the entire food system.
  • Strengthen a multi-sector and multi-stakeholder dialogue towards more integrated approaches to landscape management. This will require enhanced coordination of policy and climate action across multiple public and private entities.
  • Invest in knowledge and information. Additional analyses are needed to better identify the institutional barriers and market failures that are inhibiting broader adoption of climate-resilient and low-emissions agricultural practices in individual countries, regions and communities.
  • Build capacity to address barriers to implement climate action. Agricultural producers require additional capacities to understand the climate risks and vulnerabilities they face, and respond accordingly.

In the water sector, most national climate plans with an adaptation component prioritize action on water, yet financing would need to triple to US$295 billion per year to meet such targets, said experts at COP23.

“Sustainable use of water for multiple purposes must remain a way of life and needs to be at the center of building resilient cities and human settlements and ensuring food security in a climate change context,” said Mariet Verhoef-Cohen, president of the Women for Water Partnership.

The international water community co-signed what it called a “nature based solution declaration” to encourage the use of natural systems in managing healthy water supplies.

Around 40 percent of the world’s population will face water shortages by 2050, accelerating migration and triggering onflict, while some regions could lose up to six percent of their economic output, unless water is better managed, warned Verhoef-Cohen.

She said, “Involving both women and men in decision making and integrated water resources initiatives leads to better sustainability, governance and efficiency.”


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Featured Image: G.H. MUMM champagne 2017 harvest in champagne vineyard near Verzenay, France, September 7, 2017 (Photo by Intercontinental Hong Kong) Creative Commons license via Flickr

Egypt Funded for Africa’s Largest Solar Array

Solar panels at the 3rd project in Aswan province under the European Bank for Reconstruction and Development's Egypt Renewable Energy Framework (Photo courtesy EBRD) Posted for media use

Solar panels at the 3rd project in Aswan province under the European Bank for Reconstruction and Development’s Egypt Renewable Energy Framework (Photo courtesy EBRD) Posted for media use

By Sunny Lewis

LONDON, UK, November 9, 2017 (Maximpact.com News) – The European Bank for Reconstruction and Development (EBRD) and the International Solar Alliance (ISA) have agreed that they will strengthen their cooperation to mobilize green energy financing.

The ISA is an alliance of more than 121 countries, most of them sunshine countries, which lie completely or partly between the Tropic of Cancer and the Tropic of Capricorn.

A joint declaration to promote solar energy in the countries where both organizations operate, was signed November 2 in New Delhi by Nandita Parshad, the EBRD’s managing director for energy and natural resources, and the ISA’s interim Director General Upendra Tripathy.

The ceremony was attended by Indian Finance Minister Arun Jaitely and visiting EBRD President Sir Suma Chakrabarti.

Signing the declaration, the EBRD President said the bank has always been eager to share its expertise with new partners and also to learn from them. “With the ISA,” he said, “we share the vision of sustainable development and of green energy, which ultimately benefits the global economy.”

During a panel discussion at the Prabodhan Leaders’ Conclave, entitled “Smart Cities: what can India learn and unlearn from Europe?” Sir Suma presented the bank’s work to modernize urban infrastructure in the 38 emerging economies where the multilateral development bank invests.

Under its Green Energy Transition approach, launched in 2015, the EBRD seeks to increase the volume of green financing from an average of 24 percent of its annual business investment in the 10 years up to 2016 to 40 percent by 2020.

To date, the EBRD has invested more than €3.7 billion directly in renewable energy, supporting 111 projects in 23 countries and funding more than 5.7 GW of generating capacity.

For instance, the bank has set its course to help build the largest solar installation in Africa near a village in the Aswan governate in the sunny land of Egypt.

The EBRD, the Green Climate Fund  and the Dutch Development Bank (FMO) are supporting the expansion of renewable energy in Egypt with a US$87 million syndicated loan to Infinity Solar Energy SAE, an Egyptian renewable energy developer, and to ib vogt GmbH, an international solar developer based in Germany.

The funds will be used to construct and operate two solar photovoltaic power plants located at the Benban solar complex in Egypt’s southern governorate of Aswan.

There, the country’s first solar power complex is being built on an area of 14.4 square miles in Benban village.

The land for the Benban solar development complex was dedicated to the state-run New and Renewable Energy Authority (NREA) by presidential decree in 2014.

The NREA divided the site into 41 plots and made them available to developers and companies to carry out individual projects. The Benban complex consists of 41 solar power plants with a total capacity of 1.8 GW.

The project began in 2015 and is expected to be complete by 2018 with an investment worth 40 billion Egyptian pounds (US$2.26 billion).

Benben is expected to be one of the largest solar generation facilities in the world, certainly the largest solar installation in Africa, with a planned total capacity of 1.8 GW.

The village of Benben takes its name from the Benben Stone, one of the most important of the Egyptian religious symbols. The sun temple, located in the city of Heliopolis, Egypt, was dedicated to the solar deity Ra, and housed the sacred Benben Stone.

A pyramid-shaped capstone on top of an obelisk, the discovery of the Benben Stone led to the construction of the famous Egyptian pyramids. The Benben stone was discovered in the Temple of the Phoenix. It is a symbol of this bird with red and golden feathers that sheltered in the Tree of Life and had the power to be reborn.

The two EBRD solar plants at Benben will be built by Alfanar Energy, a Saudi-based construction and electric manufacturing company.

Each development will be funded through loans of US$87 million under an A/B structure, comprising EBRD A Loans of US$58 million, of which US$44 million will be from the Bank’s own account and US$14 million from the Green Climate Fund. FMO will provide B Loans of US$29 million.

The investment is part of the EBRD’s US$500 million framework for renewable energy in Egypt, adopted by the bank’s Board of Directors earlier this year. The framework focuses on developing Egypt’s potential in renewables and strengthening private sector involvement in the power and energy sector.

The EBRD loan will be complemented by a parallel loan of up to US$28.5 million from the Islamic Corporation for the Development of the Private Sector (ICD) , the private sector arm of the Islamic Development Bank.

The project is expected to abate up to 100,000 tons of CO2-equivalent every year, supporting Egypt’s emission reduction targets under the Paris Climate Agreement, as well as promoting sustainable energy development and private sector participation in the country’s energy landscape.

Sabah Mohammed Al Mutlaq, chairman of Alfa Solar and vice-chairman of Alfanar Group, commented, “Globally, countries are experiencing the effects of climate change and renewable energy investors and financier’s role is vital to cultivate more investment in the region for green energy and scale down the effects of global warming.”

“This partnership will assist the socio-economic development in Benban by providing local population with infrastructure, job creation and skills training. The region has tremendous potential when generating power from the natural resources, and Alfanar will continue to actively consider venturing with ICD for additional renewable technology projects in solar, wind as well as energy from waste.”

Support for the EBRD framework is provided by the Southern and Eastern Mediterranean (SEMED) Energy Efficiency Policy Dialogue Framework, funded by the European Union’s Neighbourhood Investment Facility, and the SEMED Multi-Donor Account.

The Green Climate Fund is picking up the pace in implementing its project portfolio, and has now reached the milestone of $100 million in project disbursements, GCF officials say.

Ayaan Adam, private sector facility director for the Green Climate Fund, said, “This first investment with the EBRD under our Egypt Renewable Energy Financing Framework project is a big step forward. It shows the potential for public and private climate finance to drive the transition to low-emission energy in support of Egypt’s climate goals.”

Once the Benben solar power plants are completed, the energy generated will be connected to the national grid and then distributed across the country. Officials estimate the whole Benben project’s generated power to equal 90 percent of the electricity generated by Egypt’s Aswan High Dam.

Egypt aims to increase its use of renewable energy to 22 percent by 2020, the country’s Investment and International Cooperation Minister Sahar Nasr said during a corporate meeting in Cairo in April.

Egypt is a founding member of the EBRD and has been receiving funding since 2012. To date, the bank has invested €2.7 billion in 51 projects in the country.

The EBRD strives to be ahead of the field in green investment. Together with the Green Climate Fund, the bank signed an agreement on cooperation in April 2017 that cements the EBRD’s position as the largest single recipient of Green Climate Fund resources and paves the way for more joint projects aimed at combating climate change in the bank’s regions. In October 2016 the Green Climate Fund decided to allocate US$378 million to support green investments by the EBRD.

International institutional interest in solar has helped some 30 companies close on power plants in Benben, “African Review” reports.

The International Finance Corporation has been among the international finance institutions to dish out some of the US$1.8 billion pledged to the Benban solar complex, helping companies in the project reach financial close.

The UK government announced it would be taking part in the IFC’s debt package through the state-owned CDC Group, which is investing US$97 million in the complex.

Meanwhile, the African Development Bank’s infrastructure fund for Africa, Africa50, signed financing documentation with Scatec Solar and Norfund for developing 400 MW in solar plants in Benban by contributing equity and leveraging total funding of close to US$450 million.

Featured Image: Benben stone from the Pyramid of Amenemhat III, 12th Dynasty. Egyptian Museum, Cairo. (Photo by Jon Bodsworth courtesy Wikipedia) Creative Commons license


Green Bond Market Shoots Up

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By Sunny Lewis

 WASHINGTON, DC, October 27, 2016 – (Maximpact.com News) – The green bond market reported a worldwide milestone in August when aggregate green bond issuance topped US$150 billion for the first time since the World Bank issued the inaugural green bond in 2008. It was a US$400 million four-year bond issued in Sweden during the depths of the 2008 financial crisis.

 Green bonds finance projects that achieve energy efficiency, pollution prevention, sustainable agriculture, fishery and forestry, the protection of aquatic and terrestrial ecosystems, clean transportation, sustainable water management, and the cultivation of environmentally friendly technologies.

 Green bonds are similar to traditional bonds in terms of deal structure, but they have different requirements for reporting, auditing and proceed allocations.

A green bond is distinguished by its “use of proceeds” pledge, which earmarks the proceeds from sale of the bonds for specific projects with environmental benefits. Marketing and branding values not available to traditional bonds arise from this difference.

With the heightened awareness of global environmental and climate challenges, green bonds are increasingly seen as a tool that could allow the private sector to take an active part in raising the funds needed to put our society on a more environmentally sustainable footing,” wrote Charles Smith in an article ‘How the green bond market works‘ for the European Bank for Reconstruction and Development (EBRD) earlier this month.

 The EBRD first started issuing green bonds in 2010, and its portfolios of green projects now include 261 investments worth a total of €2.7 billion.

Smith, who is responsible for the day-to-day running of green bond issuance for the EBRD, views green bonds as “a new tool for helping the private sector green the world.”

Mobilising green projects is the goal but, ultimately, I think it is a much larger transition process,” Smith told a roundtable organized by the publication “Environmental Finance” last November. “It is about changing the way companies and entire societies think about and engage with the environment. And that is not done in a day.

At the same roundtable, some of the challenges were outlined by Yo Takatsuki, associate director, Governance and Sustainable Investment, BMO Global Asset Management. BMO Financial Group is a service mark of the Bank of Montreal.

I think one of the challenges is that the underlying assets that are being financed through green bonds are mostly renewable energy or energy efficiency. If we want a broader range of corporates to come to the market we need to encourage opening up the focus of projects beyond just climate change,” said Takatsuki.

I think people are struggling with impact reporting,” Takatsuki said. “For renewable energy, it is relatively straightforward, but for other types of projects the impact reporting is either not agreed or is not sufficiently established.

Smith comments on this issue in his article on the EBRD site, writing, “The reporting is made more complicated by the broadening range of issuer types – from banks to corporates in various industries – with different green assets and operating in dissimilar regions.

This makes comparing the bonds challenging to say the least, and the reputational risk for the issuer in making a mistake in the reporting could be considerable,” Smith writes.

Despite the challenges, the green bond market is growing quickly.

In 2015, green bond issuance hit what was then a record high, amounting to US$41.8 billion worth of investment worldwide. Compare that to 2012, when green bond issuance worldwide amounted to just $2.6 billion.

Of all the green bonds issued in 2015, $18 billion worth was issued in the European Union and $10.5 billion was issued in the United States, making these regions the leaders in the green bond initiative.

India and China are expected to get more involved in this type of investment in the near future.

The World Bank is a important issuer of green bonds. The bank has been very active through the first half of 2016, especially in the United States, where its issuances total over US$496 million and in India, where its issuances total over US$2.7 billion Indian rupees.

World Bank green bonds finance projects such as India’s Rampur Hydropower Project, which aims to provide low-carbon hydroelectric power to northern India’s electricity grid.

The World Bank Green Bond raises funds from fixed income investors to support World Bank lending for eligible projects that seek to mitigate climate change or help affected people adapt to it.

The product was designed in partnership with Skandinaviska Enskilda Banken (SEB) to respond to specific investor demand for a triple-A rated fixed income product that supports projects that address the climate challenge.

 Since 2008, the World Bank has issued over US$9 billion equivalent in green bonds through more than 125 transactions in 18 currencies.

World Bank Vice President and Treasurer Arunma Oteh said, “We have a responsibility to our clients to help them both recognize and respond to the risks that climate change poses.” 

To date, green bond issuer groups include supranationals, government agencies, cities, states, and also corporate entities.

Investors have expressed a desire for more choice of products for their growing portfolios – green bonds from more issuers and more diverse types of green bond products that offer different risk profiles, according to the World Bank.

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Green-bond supported wind farm in Penonome, Panama. (Photo by Alessandra Bazan Testino / International Finance Corporation) Posted for media use

There are several types of tax incentives policy makers can put in place to support the issuance of green bonds. The incentives can be provided either to the investor or to the issuer.

With tax credit bonds, bond investors receive tax credits instead of interest payments, so issuers do not have to pay interest on their green bond issuances.

An example of tax credit bonds in the area of clean energy is the U.S. federal government Clean Renewable Energy Bonds (CREBs) and Qualified Energy Conservation Bonds (QECBs) program. The program allows for the issuance of taxable bonds by municipalities for clean energy and energy conservation, where 70 percent of the coupon from the municipality is provided by a tax credit or subsidy to the bondholder from the federal government.

With direct subsidy bonds, bond issuers receive cash rebates from the government to subsidize their net interest payments.

This structure also is used under the U.S. federal government CREBs and QECBs program.

With tax-exempt bonds, bond investors do not have to pay income tax on interest from the green bonds they hold, so the issuer can get a lower interest rate. An example is tax-exempt bond issuance for financing of wind projects in Brazil.

Green bond issuers report both use of proceeds and the impact achieved. Still, specific reporting requirements are under development and currently non-standard.

A coalition of organizations including leading issuers and buyers are working together to establish reporting procedures. Anticipated reporting standards include third party review by an auditor of the sustainability of qualifying projects, and annual reporting on a universal template.

Meanwhile, the Green Bond Principles (GBP) are voluntary process guidelines that recommend transparency and disclosure and promote integrity in the development of the Green Bond market by clarifying the approach for issuance of a Green Bond.

The Green Bond Principles are intended for broad use by the market, according to the World Bank. They provide issuers guidance on the key components for launching a credible Green Bond; they aid investors by ensuring availability of information for evaluating the environmental impact of their Green Bond investments; and they assist underwriters by moving the market towards standard disclosures that will facilitate transactions.


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Image: Green shoots growing in the kitchen gardens, Tatton Park, Cheshire, England, May 2010 (Photo by Will Clayton) Creative Commons license via Flickr

Biggest Banks Back Strong Global Climate Deal

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Image: Bank of America Tower in the fog, New York City, May 2014 (Photo by David Phan creative commons license via Flickr)

 

By Sunny Lewis

NEW YORK, New York, October 2, 2015 (Maximpact News) – Six of the largest U.S. banks have called for a strong, legally-binding universal climate agreement to emerge from the United Nations Paris climate conference in December.

The big six – Bank of America, Citi, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo – said in a joint statement released Monday, “While we may compete in the marketplace, we are aligned on the importance of policies to address the climate challenge.”

“Over the next 15 years, an estimated $90 trillion will need to be invested in urban infrastructure and energy,” the banks stated. “The right policy frameworks can help unlock the incremental public and private capital needed to ensure this infrastructure is sustainable and resilient.”

Matt Arnold, managing director and head of social and sustainable finance at JPMorgan Chase, said, “Significant investments in urban infrastructure and energy will need to be made over the next two decades.”

“Governments need to take the lead in sending clear and timely policy signals to ensure these investments support and enhance sustainable economic growth and development, which includes addressing climate change,” said Arnold.

From November 30 to December 11, France will be hosting and presiding over the 21st Session of the Conference of the Parties to the United Nations Framework Convention on Climate Change (COP21).

COP21 will be a crucial conference. There, world leaders are expected to achieve a new international agreement on the climate, applicable to all countries, with the aim of keeping the increase in global warming below 2°Celsius as compared to pre-industrial times.

“We call for leadership and cooperation among governments for commitments leading to a strong global climate agreement,” the American banks stated jointly. “Policy frameworks that recognize the costs of carbon are among many important instruments needed to provide greater market certainty, accelerate investment, drive innovation in low carbon energy, and create jobs.”

“Morgan Stanley believes that the capital markets can and must play a positive role scaling solutions to global challenges,” said Audrey Choi, managing director and CEO of the Morgan Stanley Institute for Sustainable Investing.

“The demand for financial tools that address climate change is strong and growing,” said Choi, “and we are committed to continued leadership across a range of climate-focused capital markets activity, including financing for clean-tech and renewable energy businesses, underwriting green bonds, and ensuring our wealth management clients have options to align their portfolios with their environmental goals.”

As the bank executives offered their views of a universal climate agreement to be signed in Paris and take effect in 2020, the word “opportunities” arose repeatedly.

“Climate change presents enormous challenges for global business, but addressing it also offers tremendous opportunities,” said Alex Liftman, global environmental executive at Bank of America.

Valerie Smith, director of Corporate Sustainability at Citi, said, “We are increasingly working with our clients across various sectors to not only manage and mitigate risks but also recognize opportunities associated with addressing climate change.”

“Businesses across the spectrum are evaluating the risks and opportunities associated with a changing climate – and taking action,” said Mary Wenzel, head of Environmental Affairs at Wells Fargo.

The banks said they are committing “significant resources” toward financing climate solutions but that these resources are not sufficient to meet global climate challenges.

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Image: Susan Crowley of Multilateral Consulting LLC, left, and Kyung-Ah Park of Goldman Sachs (Photo courtesy United Nations Association creative commons license via Flickr)

Kyung-Ah Park, head of the Environmental Markets division at Goldman Sachs, said, “One of the critical roles financial institutions play in helping to address climate change is to harness market mechanisms to mobilize much needed capital to facilitate the transition to a low carbon future and build greater physical resiliency. Governments can help markets by establishing a clear, stable policy framework that creates value for these investments and facilitates innovation.”

Across the Atlantic Ocean, the European Bank for Reconstruction and Development (EBRD) is scaling up its contribution to the global fight against climate change with an increase in green financing over the next five years.

Endorsed by the EBRD’s Board of Directors September 30, the bank’s new Green Economy Transition approach aims for green financing to total some €18 billion over the next five years. So, the EBRD would deliver as much green financing in the next five years as it has in the last ten.

The EBRD aims to increase its green financing to around 40 percent of total annual investments by 2020 compared with a target share of 25 percent over the previous five years.

EBRD President Sir Suma Chakrabarti said, “The international community has a unique chance this year to deliver a decisive set of measures to combat climate change. With its long experience as a leader in climate finance, the EBRD is making an important contribution to this collective stand through its Green Economy Transition approach.”

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Image: Sir Suma Chakrabarti, president of the European Bank for Reconstruction and Development in London, September 2013 (Photo courtesy Foreign and Commonwealth Office creative commons license via Flickr)

Across the Pacific Ocean, Asian Development Bank (ADB) President Takehiko Nakao announced September 25 that his bank will double its annual climate financing to US$6 billion by 2020, up from the current $3 billion. Nakao said ADB’s spending on tackling climate change will rise to around 30 percent of its overall financing by the end of this decade.

Featured Image: City lights of the United States, December 2012. Keeping the lights on while limiting greenhouse gases emitted by burning fossil fuels to produce electricity is the climate challenge. (Photo courtesy NASA Goddard Flight Center creative commons license via Flickr)

Award-winning journalist Sunny Lewis is founding editor in chief of the Environment News Service (ENS), the original daily wire service of the environment, publishing since 1990.