Financiers including banks, insurers and investors with $130 trillion at their disposal pledged to put combating climate change at the centre of their work, and gained support in the form of efforts to put green investing on a firmer footing, Reuters has reported.
And in another development at COP26, at least 19 countries are today expected to commit to ending public financing for fossil fuel projects abroad by the end of 2022.
In an earlier announcement at the meeting in Scotland, financiers accounting for around 40 per cent of the world’s capital committed to assuming a “fair share” of the effort to wean the world off fossil fuels and fight climate change.
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A main aim of the COP26 talks is to secure enough national promises to cut greenhouse gas emissions—mostly from coal, oil and gas—to keep the rise in the average global temperature to 1.5 degrees Celsius.
But how to meet those pledges, particularly in the developing world, is still being worked out, and it will require a great deal of cash.
UN climate envoy Mark Carney, who assembled the Glasgow Financial Alliance for Net Zero (GFANZ), put the figure at $100 trillion over the next three decades, and said the finance industry must find ways to raise private money to take the effort far beyond what states alone can do.
“The money is here—but that money needs net zero-aligned projects and (then) there’s a way to turn this into a very, very powerful virtuous circle—and that’s the challenge,” the former Bank of England governor told the summit.
Carney’s comments reflect a problem often cited by investors who, in the face of a myriad of climate-related risks, need to be sure that they are being accounted for in a transparent and preferably standardised way globally.
“Some of the key interlocking pieces of the finance puzzle are now coming together,” said Nick Robins of the Grantham Research Institute on Climate Change and the Environment.
Another piece of the jigsaw is where the public money to assist the transition from carbon intensive energy and industry will come from, and on Wednesday the United States said it would support a mechanism to raise new finance for clean energy and sustainable infrastructure in emerging markets.
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US Treasury Secretary Janet Yellen said the United States would join Britain in backing the Climate Investment Funds’ (CIF) new Capital Market Mechanism, which would help attract significant new private climate funds and provide $500 million per year for the CIF’s Clean Technology Fund, as well as its new Accelerating Coal Transition investment program.
“The reason I am here is because climate change is not just an environmental issue. It is not just an energy issue. It is an economic, development and market-destabilizing issue, and I would not be doing my job if I did not treat it with the seriousness warranted,” Yellen said.
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