Speaking at the Climate Finance Accelerator Workshop ‘Further, Faster, Together’ in London on 15 September, Nick Nuttall, Spokesperson for UN Climate Change, said that the Paris Climate Change Agreement was no longer just about governments or even the short-term cycles of different administrations, but a wide movement aligning itself to the aims and ambitions of the treaty. “We also need to identify the right investment structures, facilitate the needed data flows, streamline assistance, and use public funds smartly to galvanise the private sector as never before. This is not rocket science; this is very doable,” he said. Read his full speech here.
Thank you for inviting me to address the close of the Climate Finance Accelerator Workshop, here in the heart of one of the world’s great financial centres.
And thanks to the sponsors—the UK Government; the City of London’s Green Finance Initiative and the Moroccan Presidency of what we in the UN climate process call COP22.
In November, Morocco will hand over the baton to the Prime Minister of the Pacific island of Fiji who will take up his responsibility as COP23 President in November in Bonn, for the next round of UN negotiations.
I have been asked by my dear friend and eco-finance pioneer Tessa Tennant to try and set your pioneering week into the landscape of the UN-led climate process as it picks up speed and focus to address the real, persistent and rising threat to our world, its people and the global economy from unchecked climate change.
The process is picking up speed in another way too, to fast track the inordinate opportunities recognized by so many governments—and an increasing number of local authorities, businesses, investors and citizens—linked to a transition to a low carbon, resource efficient, resilient global economy.
As some Finance Ministries already recognize, this is simply a smart economic growth agenda, and mitigating climate change is just one of the many benefits.
I also want to underline a simple fact—the UN, governments and a planet of now around seven billion people, need you, the deal-makers in this room.
And I will tell you why.
We are, to use a well-worn cliché, at a crossroads.
After close to a quarter of a century of some of the most frustrating and invariably weary international negotiations, we have today the long-sought prize of a truly global international climate treaty—the Paris Climate Change Agreement of 2015.
It was the impossible dream and yet it has happened.
The policy-makers of nations rich and poor, East and West, North and South drew an unequivocal line in the sand to kick start a new, ambitious development path for every man, woman and child.
At the same time, nations also agreed a suite of what are called the Sustainable Development Goals (SDGs).
Together Paris and the SDGs provide a clear direction, foresee a process of ever-rising ambition and an end-point towards the second half of the century where success can be secured.
In reaching and rapidly ratifying the Agreement, policy-makers have done a great deal of the heavy-lifting, but their work has not ended—the Paris Agreement is like a breathtaking concept car or state of the art laptop.
It is clear in direction and full of extraordinary potential—but it needs a fully understandable and well-constructed ‘operating manual’ to deliver on its full potential for transformative change.
This will be one of the central issues of the November, COP23, UN climate summit in Bonn.
National legislators have also built the basic legal infrastructure to take this enormous endeavor forward.
Over 1,200 climate-related laws in 164 countries have been enacted since 1997, including the Climate Act here in the UK—and more are being added annually as a result of Paris.
The recent announcement by the new President of the United States—namely that the government of the USA would withdraw from Paris—sparked a show of unprecedented solidarity among governments everywhere.
It also sparked a swift response of commitment from so many states, cities and indeed businesses in the USA to accelerate climate action to bridge the gap.
Indeed, this is a hallmark of the Paris Agreement—it is no longer just about governments or even the short-term cycles of different administrations, but a wide movement aligning itself to the aims and ambitions of the treaty.
We no longer have a chain, broken by a weak link: we have a web of ever deeper influence and ambition.
Furthermore, the structure of the Agreement, with each country making its own commitments, playing to their particular strengths, means that there’s nothing to hold a nation back.
Every country can get to the business of converting their climate commitments—their NDCs in UN jargon—into NDC financing plans, just as you are demonstrating this week, and these can help spur broader economic progress.
The positive direction is set, and there is no turning back.
So, we are in a good place with global action advancing but we need to get practical in order to pick up speed so we can out-run a world of more intense and damaging climatic impacts—one that will be bad for business and investment, let alone people.
Paris puts the safety line at staying well below a 2-degrees Celsius temperature rise this century over pre-industrial levels—and better to stay no higher than a 1.5-degrees Celsius rise.
Well, we are already at around 1-degree Celsius and events of recent weeks underline in graphic detail the urgency to press the climate accelerator Further, Faster and Together to use one of our catch phrases for COP23.
There are many scientists one can quote in respect to the multi-billion-dollar misery caused by Hurricane Irma and other extreme weather events of the past few weeks. But here’s something I find especially concerning.
Dr Adrian Champion of the University of Exeter, observes, and I quote: “The occurrence of two category five hurricanes in the same season hasn’t been known to happen since records began”.
Do we really want these events, including also the loss of lives, misery and economic damage recently seen in Asia where thousands—not hundreds—have died?
Do we really want this to become the new norm?
The fact is that everyone in this room can make a HUGE difference with respect to the pace of making a low-carbon transition.
Studies of the national climate commitments – the NDCs – reveal the same strategy again and again: to bring emissions down and to build more resilient, climate-proofed infrastructure.
That means you don’t have to keep re-inventing the financing models--and just as you’ve done for shopping malls or airports or roads, you can create deal-flow into things that are frankly more urgently needed: from clean energy systems, sustainable transport infrastructure and waste management to smart forest management and smarter food systems.
These are the investments which are going to get us ahead of the climate curve. Banks such as HSBC, BNP Paribas and Deutsche Bank, which are making the early effort, learning the skills and developing the term sheets; they are setting themselves up to win substantial business in this massive green revolution.
You know the numbers better than I. But I understand that only about one per cent of the globe’s USD$ 300 trillion capital market is currently going into the ‘green space’.
Yet around 160 countries have ratified the Paris Agreement - most with NDCs-which suggests there is a lot of unaddressed opportunities out there.
It’s a bit chicken and egg—you need finance for projects and you need projects to attract finance.
But most importantly you need those who know how to put the two worlds of policy and finance together—people like many of you in this room—to use their core skills to advance business opportunities in this space.
It’s fantastic that some of you are active already but we need way more of you to start doing NDC-related project financing.
By doing so you’ll discover other benefits. Many next-generation financiers want to be doing deals which are meaningful and relevant to the critical needs of today.
Financial institutions should seriously consider creating graduate recruitment programmes, secondments and other facilities which strengthen their ability to be NDC financiers, while also attracting and retaining the brightest and best.
Earlier Steve Waygood from Aviva posed the question on aligning capital market flows with what is called Article 2.1a of the Paris Agreement which refers to the well below 2-degrees-Celsius target—especially given that the current clutch of climate action plans or NDCs do not meet that goal.
Let me briefly respond—firstly the Agreement envisages periodic reviews of where the international community is in terms of emission reductions.
It also envisions a ramping up of ambition to eventually get the collective impact of national plans onto the ‘well below 2 ‘pathway.
Think of it this way, a country which has successfully built 1GW of clean energy is more likely to commit to another GW, and another thereby increasing its overall ambition and carbon reductions.
UN climate change is also advancing a series of interlinking projects—with many partners—to support Steve’s point.
But the point is, we need to get down to business now, helping many more mitigation and adaptation projects come into being.
We also need to identify the right investment structures, facilitate the needed data flows, streamline assistance, and use public funds smartly to galvanise the private sector as never before. This is not rocket science; this is very doable.
At UN Climate Change, we are looking at “back casting” which starts from the future we want to build—in other words a well-below 2-degree world and works backwards.
The back casting looks at the levels of existing technologies that need to be deployed and the levels of investment needed too in new ones to take them from research and development to maturity.
The back casting also will look at a road map for the kinds of financial flows needed and when to get there.
With respect to individual financial institutions, this new approach will look how best and how fairly to divvy-up and set financial flow targets for each of those who want to participate.
On the demand side, we want to align an investment roadmap with what are called the Low Emission and Climate Resilient Development Strategies of countries—they dovetail and support the NDCs but are more aligned with the 2-degree Celsius target and are more long term in nature.
There are many other pieces in this puzzle, but I wanted to give you a flavour of the thinking and the direction.
We are trying to mobilize up to $20 million to realize all this, so don’t be shy if you want to come and support us!
Ladies and gentlemen, let me conclude.
The next opportunity to advance all these agendas, power-up pre-2020 ambition and facilitate the deal-making is in Bonn in November. Quite a challenge for our pretty city on the Rhine—but exciting too.
We will have well over 20,000 delegates from Heads-of-State and governments to cities, states and regions, alongside the multilateral development banks, business, investors and even some celebrities.
Why not send some of your bright young things to Bonn to start doing the rounds of the countries you want to do business with?
Bonn is just one of many gatherings for building your NDC-related deal books. Next week is Climate Week in New York where we already know of many new commitments coming—one on electric cars is scheduled and another on zero emission zones in mega cities that should be eye popping.
After Bonn, French President Emmanuel Macron will host a December summit followed by another opportunity to fast track action at California Governor Jerry Brown’s September 2018 summit.
This will be followed by the next annual UN climate change conference to be held in Poland in late 2018 with the UN Secretary-General hosting yet another moment in 2019 to catalyze yet more progress and implementation.
You may already know the countries well enough to work with them without going to these events but if you want to partner with more or you’re starting from scratch then these are the places to start making connections.
Ladies and Gentlemen, the Paris Agreement is nothing short of restoring the balance that once prevailed prior to the industrial revolution BUT in a 21st century context.
We’re talking about quality of life in clean and green, smart tech economies for everyone and it’s very inspiring to see how many hearts, minds and hands are already working to make this happen.
The Climate Finance Accelerator is another waymark on the journey. It’s about getting that green kit in the ground as quickly as possible – this is the big step that needs to happen now and in many, many more countries.
If you want to leave a legacy, professionally and even personally this is it.
With future generations looking back and acknowledging that the people in charge in the early 21st Century, saw what was needed to be done and put their best feet forward — Further, Faster, Together — to implement the solutions in time.