For the third consecutive weekend, we are posting two interviews from our partner The Beam, a Berlin publication that takes a modern perspective at the energy transition by interviewing inspirational people from around the world that shape our sustainable energy future.
- Named one of the 20 most influential women in climate change by the International Council for Science, Barbara Buchner’s main mission is to advise leaders on climate, energy, and land use investments around the world.
- On the other side, Frank Heinlein is a specialist of sustainable architecture and he told The Beam about its benefits and challenges.
Barbara Buchner: It depends who you ask! In the context of the international climate negotiations undertaken by the United Nations Framework Convention on Climate Change, “climate finance” often refers to flows of funds from developed to developing nations to help poorer countries cut emissions and adapt to the effects of climate change. Different nations have not yet reached agreement on what should count towards developed nations’ commitments to mobilize finance. CPI works to improve definitions and methodologies to better track finance in this area and to create greater transparency on debates as to what should count.
We also often consider “climate finance” more broadly in our work as any public or private investment or support that reduces emissions or builds resilience to a changing climate. This allows us to measure progress against investment needs, identify gaps or blockages in finance flows, and supports decision makers in making more effective interventions. This broader definition is the one we use in our work to capture global climate finance flows.
How much money do we need every year worldwide to address climate change? And where do we find this money?
The IEA estimates that we need to invest over USD 1 trillion a year in the energy sector alone to have a chance of limiting warming to two degrees or less. In the context of global investment in the energy system as a whole, including all the investment and support for polluting fossil fuels, this isn’t as much as it sounds at first. The investment for the low-carbon transition is already out there. The New Climate Economy report estimated that total additional infrastructure investment needs from a low-carbon transition up to 2030 could be just US$4.1 trillion across the world. Unfortunately, we are still spending too much on the high-carbon economy. This is where most money will need to come from. We need to shift investments from traditional “brown” activities to sustainable “green” ones. Given the magnitude of the challenge, and the scarcity of public resources, there is a need to use public resources most effectively to unlock private finance at scale, including from actors such as institutional investors who currently are still at the margins of climate action.
What are the main barriers that stand in the way of scaling up finance to fight climate change?
Based on our work and interactions with investors we have identified three main barriers to investment:
- Policy gaps, including regulatory frameworks and retrospective policy changes. An important insight from our work is that overall, the majority of climate finance was raised and spent in the same country — about 74% of total climate finance flows, and up to 92% of private were domestic finance. This confirms the strong domestic preference of investors identified in previous years’ Landscape reports and highlighting the importance of domestic frameworks for attracting investment. Because domestic investment dominates, it is vital to get domestic investment policy and support frameworks right.
- Knowledge and awareness gaps. Investment opportunities are often not well or not all known and there is a lack of transparency / information of risks related to climate change. Understanding climate vulnerability and risks is essential to integrating climate change risks (or opportunities) into investment or financing decision-making
- Risk, viability and funding gaps. Often, a viability gap exists between a ‘business-as-usual’ investment and a climate investment. The viability gap can exist because investments in green technologies can have additional or higher up-front costs, insufficient revenues, or face risks and information gaps that can discourage investors. Investors indeed perceive a range of risks in green investments, and not all risks covered by existing risk mitigation instruments (particularly policy and financing risks). Inadequate access to finance, including unsuitable terms and conditions, or uncertainties about the returns of investments and risk aversion reduce investors’ incentives of focusing on climate investments.
Frank Heinlein: There are probably as many definitions of sustainable architecture as there are architects in the world… This isn’t necessarily a problem. One just has to be aware that there isn’t any single definition valid for everybody. In order to add our own definition to the existing plethora we have developed the Triple Zero formula. For us this is an easy way to define sustainable architecture (and to make its sustainability measurable and verifiable): On average, a sustainable building should require ZERO energy from external sources. It should produce ZERO carbon dioxide or other emissions that are harmful to humans or the environment. And last, but not least: when the building is being converted or deconstructed, there should be ZERO waste.
What are the economic benefits of green buildings?
We need green buildings not because of any economic benefits, but rather to protect our planet from further overexploitation. The economic benefits of green buildings are not to be reaped in the short term. But in the long term, they are quite substantial, particularly if one consider the entire life-cycle of a building (which also includes questions such as “Where is the ecological footprint of the building materials?” and “What happens to the building materials once the building is dismantled?”).
How important is it, today, to think about buildings and infrastructures that will help us to reduce energy and water use, and develop sustainable cities over the long-term?
It is absolutely vital not only to think about these issues, but to act now — fast and as efficiently as possible. Already in 1972 the Club of Rome has given a fairly accurate description of what will happen if we do not change our approach. So far the change has been far too small — the predictions of “The Limits of Growth” are still valid.
What do you feel is the greatest challenge when it comes to designing for environmental sustainability?
For us the biggest challenge is not the complexity of the systems we have to deal with. It is rather the inertia of all those who have a major influence on the built environment — who do not consider the looming ecological catastrophe relevant enough to change the way they act.
What are the main advances, and future developments, in technology and design, allowing you to design in a more sustainable way?
First of all: Designing in a more sustainable way does not depend on any new technology or methodology. It needs above all an increased awareness.But of course technology can also help making our built environment more sustainable. For example, we consider predictive and self-learning energy management systems as very important. They can enhance the performance and the efficiency of a pool of many different units producing and consuming energy from renewable sources. Our project B10 in Stuttgart has made a first step in this direction.
Do you think that sustainable architecture and design can help developing countries dealing with other environmental issues such as energy use and water?
Sustainability is a very broad topic — energy, emissions and resource consumption are all part of the equation. Therefore, sustainable architecture can and will definitely make an important contribution for all countries that have to deal with environmental issues. And that includes pretty much everybody on earth…