A green rain of financial support will fall on climate change delegates in Paris next week at the opening of the Green Bank Design Summit on Monday, March 18. At least 24 developing countries representing 27% of global GDP and 44% of global carbon emissions are coming together to craft a new model for advancing clean energy investment, say organizers.
Building on a proven model of public green banks in advanced economies, more than two dozen developing nations will gather in Paris on March 18-19 to explore the establishment of national green finance institutions, say the Summit organizers. They will be joined by leading private banks and development finance institutions also eager to play a role in the design of a new global climate finance system.
The Summit will kick off the design of a new global platform for green banks and formation supported by governments, philanthropy, and the private sector to tackle climate change with more than words. Models for the new Green Banks will include financial institutions in Australia, the United Kingdom, New York State, and other areas.
Among banks attending the Summit are Macquarie, HSBC, and Mizuho Bank; development finance institutions and multilateral funds including Agence Française de Développement, the Green Climate Fund, and the Asian Development Bank; existing green banks representing the Green Bank Network; and philanthropic foundations and allied organizations.
When the Intergovernmental Panel on Climate Change released its Special Report on Global Warming of 1.5 degrees last October, the need for immediate action became clear to most — not Trump, of course — world leaders. But mobilizing and targeting finance is what will make change take place. The International Energy Agency estimating $1 trillion of annual investment is required through 2050 to reach the goals of the past Paris Agreement.
In November, members of the Green Bank Network collectively closed transactions that are expected to mobilize $41 billion in public and private capital for green infrastructure projects around the globe, effectively meeting their goal of $40 billion this year, said United Nations organizers of the Conference on Climate Change COP24 in Katowice, Poland, held in December.
This global group of financial institutions includes founding members Clean Energy Finance Corporation (Australia), Connecticut Green Bank (US), Green Finance Organisation (Japan), Malaysia Green Technology Corporation, NY Green Bank (US), and Green Investment Group (UK) and new member Rhode Island Infrastructure Bank (US). These organizations have appointed the Coalition for Green Capital and the Natural Resources Defense Council to manage the development of the network, with support from ClimateWorks foundation, the UN says.
One new member of the Green Bank Network this year is the Rhode Island Infrastructure Bank, whose mission is to actively support and finance investments in the State’s infrastructure through a variety of means, including the issuance of bonds, originating loans and making grants, and the engagement with and mobilization of sources of public and private capital, the UN says.
The 25 countries attending the Summit come from every major developing region, including Asia (China, India, Vietnam, Malaysia, Mongolia, Indonesia, Cambodia, Kyrgyzstan), Africa (Nigeria, Rwanda, South Africa, Egypt, Kenya, Angola, Uganda), Latin America (Brazil, Chile, Argentina, Colombia, Mexico, Peru), the Middle East (Lebanon), and Eastern Europe (Turkey, Ukraine).
Together, these countries represent approximately 29% of the global population, 27% of global GDP, 69% of developing country GDP, and 44% of global CO2 emissions from fuel consumption as well as 72% of developing country emissions.
“As these countries know, governments can’t do this work alone. Private investors want and need to be part of the solution, and green banks can bridge those partnerships to increase investment in clean energy and launch this paradigm shift,” said Douglass Sims, a Director and Senior Advisor at the Natural Resources Defense Council, an organizer of the event.
“Time and time again, entrepreneurial and commercially minded green banks have accelerated private capital formation in the low-carbon economy in industrialized economies, maximizing the impact of scarce fiscal resources. These institutions hold enormous promise in emerging markets, where every public dollar is even more precious, and the need for low-carbon development is just as pressing,” said Ilmi Granoff of ClimateWorks Foundation, lead sponsor of the Summit, in a statement.
“Developing nations are getting serious about decarbonization, but they need to maintain a strong focus on economic growth and broad-based development. Success depends on the ability to inject finance into the right kinds of investments quickly enough. This is why so many of them are exploring green banks as a means to supercharge that process,” said Paul Bodnar, Managing Director at Rocky Mountain Institute, a partner in convening the event.
“To win the climate battle, countries around the world must rapidly increase Investment through a systemic effort to drive markets from carbon to clean energy. Green banks have the capacity to bring the international climate finance architecture into alignment with Paris climate goals and drive transition to a clean economy,” said Reed Hundt, CEO of the Coalition for Green Capital, another summit organizer.
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