Climate Action 2017-2018

climateaction

COP23 | Bonn, Germany, 6-17 November 2017

2017-2018

In partnership with

Published for

E N D O

R

S

E

D

E V E N T

Frank Bainimarama

on Fiji’s ambitions

for the COP23

Presidency

Patricia Espinosa

on sharpening

climate action at

COP23

PLUS

Exclusive interview

with the World

Energy Council &

The 15 Climate

Champions of 2017


WELCOME

ISBN

978-0-9928020-9-7

Published

November 2017

Founder & CEO

Nick Henry

Commissioning Editor

Jane Nethersole

Editor

Adam Wentworth

Subeditor

John Saunders

Design

Daniel Brown

Printer

Buxton Press

The Publishers wish to thank all the

individuals and organisations who have

contributed to the book. In particular

we acknowledge the following people

from UN Environment for their help and

advice in producing Climate Action:

Erik Solheim, Naysan Sahba, Catherine

Beltrandi, Sam Barratt and Samantha Le-

Royal. UN Environment do not endorse

the organisations that have included

advertisements in this publication.

Climate Action

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UN Environment

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Climate Action has a well-established reputation for providing

detailed insight from the world’s leading sustainability

thinkers and policymakers.

This 11th edition is no diff erent in off ering readers the latest ideas

and developments in clean technology, environmental protection,

climate finance and innovation that are vital to making the transition to

a low-carbon economy.

Two years ago, 196 member states signed the Paris Agreement,

marking an historic success towards combatting climate change. The accord provides a

major opportunity for countries to develop low-carbon strategies that will build truly modern

and sustainable economies. The landmark deal, along with the newly agreed Sustainable

Development Goals out to 2030, can provide the necessary push for countries to protect the

environment and improve people’s lives.

This year’s climate talks, taking place in Bonn, Germany represent an opportunity to build

on the strength and cooperation which made the Paris Agreement such a success. The role

of cities, regions and the private sector in combatting climate change is crucial to achieving

a two degree scenario. Climate Action is particularly excited to be continuing our partnership

with BMW Group as Headline Partners for the 8th Sustainable Innovation Forum, which is

the largest business-focused side event taking place at this year’s talks, and is located in the

grounds of Deutsche Post DHL Group’s Post Tower, only steps away from the Bula Zone.

In this edition, we are delighted to include participation from a range of countries and

bodies including Fiji, the African Union, France, UK, Denmark, Norway, Canada, and the

European Commission.

We hope you find the latest edition of Climate Action informative and engaging.

Nick Henry,

Founder & Chief Executive Off icer, Climate Action

The information contained in this publication has been published in good faith and the opinions herein

are those of the authors and of the UN Environment or Climate Action. The designations employed and

the presentation of material in this publication do not imply the expression of any opinion whatsoever

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city or its authorities, or concerning the delimitation of its frontiers or boundaries. UN Environment and

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UN Environment

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published by Climate Change Media

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minimal.

1


CONTENTS

WELCOME

4 Erik Solheim, Executive

Director, UN Environment

8 Frank Bainimarama,

Prime Minister of Fiji and

President of COP23

10 Barbara Hendricks,

Minister for the Environment,

Germany

14 Climate Action’s 15 Climate

Champions of 2017

10

32 High ambitions for France’s

climate transition

Nicolas Hulot, Minister for

Ecological and Solidary Transition,

France

34 Electrifying Norway

Vidar Helgesen, Minister of Climate

and Environment, Norway

36 The Danish way to green

growth

Lars Christian Lilleholt, Minister

of Energy, Utilities and Climate,

Denmark

COP23 & BEYOND

18 Sharpening climate action

at COP23

Patricia Espinosa, UNFCCC

20 COP23: bringing

Paris to life

Nazhat Shameem Khan,

Chief Negotiator for the COP23

Presidency, Fiji

23 Looking forward

to COP24

Jan Szyszko, Minister for the

Environment, Poland

POLICY

26 Impact of U.S. withdrawal on

the Paris Agreement

Sue Biniaz, UN Foundation

28 America pledges to fight

climate change, with or

without Washington

Michael Bloomberg, UN Special

Envoy for Cities and Climate

Change

20

30

40 Finland leads the transition

towards a circular bio-economy

Kimmo Tiilikainen, Minister of the

Environment, Energy and Housing,

Finland

42 A low carbon future

for the UK

Claire Perry, Minister for Climate

Change and Industry, UK

44 Clean growth and climate

action in Canada

Catherine McKenna,

Minister of Environment and

Climate Change, Canada

46 Women must be at the heart

of climate action

Isabella Lövin, Minister for

International Development

Cooperation and Climate, Sweden

48 Disaster risk reduction and

climate change

Robert Glasser, UN Special

Representative for Disaster Risk

Reduction

FINANCE

30 Europe leads by example on

climate action

Jos Delbeke, Directorate-

General for Climate Action,

European Commission

32

52 Climate Action’s Sustainable

Investment Forum

54 Financing climate impacts in

small island states

Thoriq Ibrahim, Minister of

Environment and Energy, Maldives

2


56 $70 trillion global investment

pool goes greener

Andrew Steer, World Resources

Institute

58 Sustainable finance: the great

acceleration

Nick Robins, UN Environment

Inquiry

60 The importance of climaterelated

financial disclosures

Graeme Pitkethly, Task Force

on Climate-related Financial

Disclosures

56

ENERGY

79 Decarbonising the energy

sector

Interview with Christoph Frei,

World Energy Council

84 Integrating renewables into

our energy systems

Christine Lins, REN21

88 Africa’s renewable energy:

challenges and opportunities

Amani Abou-Zeid, African Union

Commission

CONTENTS

62 Climate transparency in

financial markets

Remco Fischer, UNEP FI

92 Are India’s renewable energy

targets over ambitious?

Leena Srivastava, TERI University

64 Carbon pricing in the Paris

Agreement era

Richard Zechter, World Bank Group

INNOVATION

66 Climate Action’s Sustainable

Innovation Forum

68 Mission Innovation:

accelerating the transition to

a clean energy economy

Patrick Child, European

Commission

71 Catalysing climate innovation

in developing countries

Anabel Gonzalez & Jonathan

Coony, World Bank Group

74 Innovative technologies

provide the answer to climate

change

Roland Busch, Siemens AG

76 1000 profitable solutions to

solve climate change

Bertrand Piccard, Solar Impulse

Foundation

79

84

109

95 Catalysing affordable, reliable

and efficient energy in the U.S.

Daniel Simmons, U.S. Department

of Energy

TRANSPORT

98 Decarbonising shipping –

a challenge for all

Kitack Lim, International Maritime

Organization

101 Accelerating the transition to

electric vehicles

Colin McKerracher, Bloomberg

New Energy Finance

104 A continued commitment to

green innovation

BMW Group

CITIES

106 Resilient cities: good for the

climate and good for business

Gino Van Begin, ICLEI – Local

Governments for Sustainability

109 Delivering concrete climate

action in cities

Mark Watts, C40 Cities

3


WELCOME

WELCOME

Erik Solheim

UN Environment Executive Director

and Under-Secretary-General of the

United Nations

The Paris Agreement on Climate

Change is a clear sign that nations

can put their differences to one side

and work together for the future benefit

of people and planet. However, it is clear

we need to do more and we need to do it

faster; much faster. This edition of Climate

Action shares thoughts from governments,

businesses and academics on policies that

can help make that happen, notably through

the transition to a global green economy.

Around the world, the media is full of

headlines and dramatic images of extreme

weather events, which are becoming

more frequent and more serious. It’s

a reminder that climate change is not

something that will happen in the future; it

is happening now. The human, economic

and environmental cost is mounting fast.

But another, closely connected tragedy

is very quietly and steadily unfolding in

the background, costing millions of lives

and trillions of dollars. The same dirty

transport, energy, refrigeration and waste

that are pumping out greenhouse gas

emissions around the planet, are pumping

out pollution around its people.

Take air pollution, which kills up to

seven million people a year. In India, it

is causing a significant rise in strokes,

with women who breathe smoke from

household cooking facing a 40 per cent

higher risk. And, while strokes used to

be considered a disease for the elderly,

doctors like Praveen Gupta have seen

the number of young stroke patients

4


The world is responding in a

myriad of ways that offer real hope

and tangible solutions.

WELCOME

almost double in recent years. In fact,

many stroke patients are only in their

thirties and forties.

In the face of such a challenge it is easy

to be fatalistic, but the world is responding

in a myriad of ways that offer real hope

and tangible solutions. Countries, cities

and citizens are taking action to support

UN Environment’s BreatheLife, CleanSeas

and BeatPollution campaigns. Government

policies and the private sector are driving

down the price of green technology like

renewable energy, which now attracts

investments of $300 billion a year and

employs over 8 million people. The

diversity of the solutions on offer is evident

in the range of articles in this edition of

Climate Action. From climate lawyer Sue

Biniaz at the UN Foundation to Michael

Bloomberg, the authors reflect the many

voices rallying to mobilise green capital

and prevent runaway climate change.

Whether it’s the dramatic face of

disaster that we see in the headlines or the

very human face of suffering that Doctor

Gupta sees every day in the hospital, there

is no doubt that this must change. If the

UN Climate Change conference in Bonn

provides the perfect platform to agree the

priorities for action, then the articles in

Climate Action provide a timely reminder

that we can and will deliver. I hope, that for

public and private sector decision makers

alike, it will provide new inspiration and

build an even better future for this planet

and its people.

5


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WELCOME

BULA VINAKA

AND WELCOME

TO BONN AND

TO COP23

Frank Bainimarama, Prime Minister

of Fiji and President of COP23

Fiji is proud to preside over COP23

and, particularly, to count the

Federal Republic of Germany, the

State of North Rhine-Westphalia and

the City of Bonn as our partners. When

several friendly nations suggested at

COP22 in Morocco that Fiji take on the

Presidency of COP23, we found the idea

both daunting and enticing. Daunting

because it is a huge undertaking for a

small country, and enticing because it

gives us a chance to carry forward the

perspective of all climate-vulnerable

countries.

Fiji is not a newcomer to the world

stage. We may seem like a small, isolated

country in the middle of the Pacific

Ocean, nearly 5,000 kilometres from

the nearest continent, but we are an

outward-looking nation and have long

had an internationalist perspective.

Trade is important to us, our Pacific

neighbourhood is important to us, and

we welcome thousands of visitors to our

shores each year. We also take seriously

our role as a responsible member of the

world community, and so we are among

the world’s foremost contributors to

United Nations peacekeeping operations.

Now we have the chance - with the

rest of the world - to rescue ourselves

from the folly we have lived since the

dawn of the industrial era. We can take

concerted action to reduce greenhouse

gases and limit global temperature rise

to 1.5°C above pre-industrial levels. For

8


WELCOME

Now we have the chance - with the

rest of the world - to rescue ourselves

from the folly we have lived since the

dawn of the industrial era.

Fiji and other vulnerable and developing

states, this is not just an ambitious

goal. It is an imperative and a minimum

achievement. Of course, it is no less

important to developed countries and

countries with large land areas, so

we are pleased to see that virtually all

nations are trying to put aside narrow

interests to achieve a common good. We

are engaged together in a noble effort,

which will require constant effort and

recommitment. We must succeed.

9


WELCOME

COP23 IN BONN:

TOGETHER

FOR CLIMATE

SOLUTIONS

Copyright-Hinweis: BMUB/Susie Knoll Farbraum

Dr Barbara Hendricks, Federal

Minister for the Environment, Nature

Conservation, Building and Nuclear

Safety, Germany

The recent months have dramatically

shown that the impacts of climate

change can no longer be ignored.

As the world warms up, tropical cyclones,

for example, including the devastating

Atlantic hurricanes we have witnessed this

year, will probably get more intense and

more common in coming decades. Here

in Germany, too, the number of extreme

weather events has more than tripled since

the 1970s.

Against this background, I am very

glad that with Fiji, for the first time a Small

Island Developing State has taken on the

important role of the COP presidency.

As a country particularly aff ected by the

impacts of climate change, important

topics such as adaptation to the impacts

of climate change and resilience against

climate change will be given a prominent

role this year in Bonn.

It is clear that we have to act now and

rapidly to achieve the temperature goals

set out in the Paris Agreement – to keep

global warming to well below 2˚C, and

to strive for 1.5˚C.

Important steps on the road to this

goal will be negotiated in Bonn. We will

need to work on further elaborating the

details regarding the implementation

of the Paris Agreement, which will

allow for the implementation guidelines

to be adopted at COP24 next year in

Poland, and to lay the groundwork for

more ambitious climate action in the

Facilitative Dialogue.

While we negotiate these important

aspects in Bonn, the transformation

to a greenhouse-neutral and climate

resilient world is well under way. These

irreversible developments will be

reflected in the COP’s new concept of

10


WELCOME

As technical

host we are

delighted to

support the Fiji

presidency and

the UN Climate

Change Secretariat

in the planning and

organisation of this

conference.

‘one conference – two zones’. One zone

– the ‘BULA’ zone – will be dedicated to

the negotiations, whereas the other – the

BONN zone – will focus on action and

implementation. The approach focuses

on a close integration of the zones. We

want to make sure that showcasing

decisive climate action and concrete

solutions for implementing the Paris

Agreement will push the negotiations

forward.

Germany will also do its part: As

technical host we are delighted to

support the Fiji presidency and the

UN Climate Change Secretariat in

the planning and organisation of

this conference. We will also present

our national climate efforts: firstly,

on how we implement the Climate

Action Plan 2050 the German cabinet

adopted in November 2016. The goal

of this long-term strategy is largely to

achieve greenhouse gas neutrality in

Germany by 2050. It contains climate

targets for individual sectors, providing

guidance for strategic decisions in the

years ahead. Secondly, the German

government has also launched

further initiatives at international

level to encourage the reduction of

CO 2

emissions and adaptation to the

impacts of climate change. Germany’s

contribution has significantly increased

and its commitments have grown more

than fivefold since 2005.

Our goal is to make the most of the

momentum of the Paris Agreement in

cooperation with our partners from all

over the world. We know that we will

only succeed by working together for

solutions. I am therefore looking forward

to welcoming all of you in Bonn.

11


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CLIMATE CHAMPIONS

CLIMATE

ACTION’S

15 CLIMATE

CHAMPIONS

OF 2017

Climate Action has

selected 15 Climate

Champions that are leading

the way towards innovative

and scalable solutions to

climate change. In this new

feature, we are delighted to

shine a spotlight on these

governments, individuals,

organisations, companies

and cities - and hope

that their dedication and

passion for climate action

will inspire others to follow.

14


Frank Bainimarama

The Fijian Prime Minister is making access to climate finance a “key pillar” of his country’s presidency

of COP23. He recently announced that Fiji would become the first emerging country to issue a

sovereign green bond, raising $50m. This will directly support projects to make the island more

resilient to the impacts of climate change, and build new renewable energy plants. Ahead of Bonn,

Prime Minister Bainimarama has also called for “absolute dedication to meet the 1.5 degree target”,

commenting that “it’s hard to find any part of the world that is unaffected” by climate change.

CLIMATE CHAMPIONS

Cape Town

In recent years, Cape Town has experienced a number of increased droughts, floods and wildfires.

The city has responded to these threats by aiming to improve its resilience to climate change. It

has created a specific climate adaption plan, which includes policies to manage urban water more

efficiently, reduce emissions through waste management at landfill sites, and source up to 20 per

cent of the city’s power from renewables. The city is also active in supporting clean technology

industries and initiatives.

Jerry Brown

The American politician and current Governor of California was designated the Special Envoy for States

and Regions for this year’s climate change conference by the Fijian Prime Minister. He has passionately

supported regional action, including co-leading the response to the US withdrawal by co-creating

‘America’s Pledge’. This commitment helps bring together the thousands of business leaders, mayors,

cities, and states which have affirmed their commitment to the Paris Agreement. Governor Brown has

been a tireless and active voice for sustainability, recently announcing that California would host a

Climate Action Summit’ in 2018. He also went on a tour of China to promote clean energy, and signed

with President Xi an agreement to work together to reduce carbon emissions.

Pacific Islands

Each year, an increasing number of low-lying islands are lost to rising sea levels. The Pacific Islands

have consistently presented a united front in the face of this imminent threat, caused by climate

change. Fiji has made it clear that its presidency of COP23 will stress for the strongest and most

inclusive set of actions. The United Nations General Assembly in September also saw a succession

of speeches from island leaders urging the international community to act quickly. Seven national

leaders, including the Republic of Kiribati, Tonga, and the Solomon Islands repeated calls for “urgent

and collective action”.

France

The election of Emmanuel Macron as President of France has helped reinvigorate French

commitments to climate change. In response to the US withdrawal from the Paris Agreement,

President Macron launched an initiative offering American scientists the opportunity to apply for

grants to continue their climate research in France. The new environment minister, the long-term

activist Nicolas Hulot, also announced the country’s intention to outlaw the sale of all petrol and

diesel cars by 2040. Mr. Hulot, who writes in this edition of Climate Action, also stated that France

will end the use of coal-fired power plants by 2022. France is showing new levels of ambition when it

comes to the environment with longer-term plans to make the entire country carbon neutral by 2050.

15


CLIMATE CHAMPIONS

Sweden

Sweden has just committed to completely phasing out greenhouse gas emissions by 2045. The goal

will require the government to cut greenhouse gas emissions by at least 85 per cent and the remainder

will be offset by planting trees or sustainable investments abroad. Environment Minister and Deputy

Prime Minister Isabella Lövin, who writes on gender in this edition of Climate Action, signed the law in

February. She said: “We see that the advantages of a climate-smart society are huge, both when it comes

to health, job creation and also security”. The Scandinavian country has continued to show strong climate

leadership, and has already met its 2020 target to source 50 per cent of its electricity from renewables.

António Guterres

The new UN Secretary-General has shown strong climate leadership during a testing first year in

office. He has drawn particular attention to how climate change increases the threat of conflict,

poverty and displacement. Within two weeks of taking office he urged his organisation to prioritise

resources to prevent internal conflicts, stating: “The cost of inaction is simply too high”. He was also

clear in connecting the recent number of catastrophic hurricanes to global warming, telling the UN

General Assembly: “The season fits a pattern. Changes to our climate are making extreme weather

events more severe and frequent”.

ICLEI

ICLEI is a network of over 1,500 cities, towns and regions working on new ways to green our urban

economies, areas and infrastructure. It has been instrumental in bringing together the Compact

of Mayors to provide tangible commitments from cities to accelerate climate action and reduce

emissions. ICLEI is also driving forward the role of cities and regions in developing the concept of

Local and Regionally Determined Contributions in meeting the goals of the Paris Agreement. Gino

Van Begin, who writes in this edition on climate resilience, has said: “The world is looking for a signal

that nations are moving climate action forward. Local and regional governments will be at COP23,

ready to send that signal”.

Bloomberg Philanthropies

Michael Bloomberg’s charitable foundation had an active year supporting action against climate

change. The foundation was one of the early investors in a new climate fund initiated by Bill Gates.

Breakthrough Energy Ventures is dedicated to investing in affordable and reliable zero-carbon

technologies. Bloomberg also helped launch the America’s Pledge initiative to maintain support for

the Paris Agreement, and recently donated $64 million to a campaign to shut down coal plants in the

United States. Michael Bloomberg writes in this edition on the role of cities and regions in the fight

against climate change.

Angela Merkel

Angela Merkel reaffirmed her credentials as the ‘Climate Chancellor’ this year by ensuring the lowcarbon

transition remained high on the global agenda. As Germany played host to this year’s G20

summit in Hamburg, Mrs Merkel successfully made climate change one of the main items of the twoday

meeting. An action plan was agreed at the end of the talks to further clean energy growth and

emissions reduction. The final communique also made clear that “the Paris Agreement is irreversible”

and “we reaffirm our strong commitment to the Paris Agreement”. The Chancellor has been a longterm

supporter of emissions cuts and before being re-elected in September, she promised voters that

Germany would reach its ambitious 2020 climate targets.

16


London

A year since Sadiq Khan was elected, the new Mayor of London has put clean air and sustainability

at the centre of his plans for the city. A new toxicity charge was recently introduced to limit the oldest

and most polluting vehicles from entering central London. This initial measure will be bolstered by

a new Ultra-Low Emission Zone to ensure all vehicles meet air quality standards. Mr. Khan is also

phasing out diesel buses, and has pledged to buy only zero-emission buses from 2025. He has said: “I

want to make London one of the greenest cities in the world”.

CLIMATE CHAMPIONS

Barcelona

As a coastal Mediterranean city, Barcelona is vulnerable to the impacts of climate change and it has

recognised that it needs to adapt. Its Mayor, Ada Colau, has put green infrastructure the centrepiece

of a 20 year plan for the city, aiming to add 408 acres of new green space, extend bicycle lanes

and cut private vehicle usage. The city already manages 310,000 trees and plans to greatly increase

this number to encourage biodiversity, temper the microclimate and reduce the impacts from local

flooding.

Hakima El Haite

Hakima El Haite is a Moroccan politician, climate scientist and passionate advocate for change.

She is the Special Envoy of the Kingdom of Morocco and was also named by the UN as a High

Level Champion for Climate Action. At COP22, she helped launch the Marrakech Partnership for

Global Climate Action, which is designed to accelerate the goals of the Paris Agreement. She has

played an instrumental role over the past year in bringing together different parties to advance

action on climate change.

Mark Carney

The Governor of the Bank of England has been central in promoting the role of finance in responding

to the impacts of climate change. He was instrumental in the creation of the Task Force on Climaterelated

Financial Disclosures. The body develops robust and consistent data on the level of risk posed

by climate change on financial assets. This means that market participants and policymakers can

better understand and respond to these threats. Mr. Carney has led the way in promoting marketbased

solutions to climate change and sought to raise the profile, and viability, of green finance.

The BMW Group

The BMW Group is successfully integrating sustainable thinking into the way it does business. It

already sources 50 per cent of its electricity from renewables and is on course to reach its target

of 100 per cent by 2020. It has also focussed on decreasing the amount of energy needed in car

production, reducing consumption by over 35 per cent in 10 years. In the past year, the company has

also announced a software update to help cut pollution levels by nearly a third, and introduced a

scheme where older cars can be upgraded for a low-emissions vehicle.

17


COP23 & BEYOND

SHARPENING

CLIMATE ACTION

AT COP23

Patricia Espinosa, Executive

Secretary, UN Framework Convention

on Climate Change (UNFCCC)

The Paris vision demands

that we rethink together the

way we produce, use and

consume energy, how we

manufacture and build, how

we manage our land and

ecosystems.

18


Hurricanes Harvey, Irma and Maria

were just the latest stark warning

that the world must cut out the

greenhouse gas emissions that increase

extreme weather, and build societies that

can resist or recover quickly from the

climate change that is already upon us.

These three hurricanes in the Caribbean–

US region have caused misery and hit

the livelihoods of hundreds of thousands,

while causing losses estimated upwards of

US$350 billion – equal to the annual gross

domestic product of a country like Egypt,

Norway or Thailand.

In South Asia alone, flooding this year

has so far killed over 1,200 people, and

triggered economic losses to countries

and communities. That is why COP23

will take the next essential steps to

ensure that the Paris Climate Change

Agreement meets its central goal: to

prevent global temperatures rising beyond

the point where human civilisation will

be unable to cope with the impacts. The

Agreement seeks to keep the average

global temperature rise since the late 19th

century well below 2˚C and as close to

1.5˚C as possible. We have seen around

one degree Celsius of this rise already,

underlining the imperative to deliver

results right now.

Emissions need to peak fast and be

dramatically cut thereafter until, as soon

after 2050 as possible, they are so low

they can be safely absorbed by natural

systems like forests and soils or removed

by available technology.

The Agreement, coupled with the global

Sustainable Development Goals under the

UN, is a new, optimistic vision of the future

where stable, secure livelihoods remain

possible. The Paris vision demands that

we rethink together the way we produce,

use and consume energy, how we

manufacture and build, how we manage

our land and ecosystems.

COP23, in Bonn, Germany, therefore

has three main objectives. It will show

how rising numbers of governments,

cities, states, businesses, civil society

and multilateral organisations are taking

ambitious climate action and how new

actors are continually coming on board.

It must move further and faster now

on how all these actors cooperate and

coordinate together to make a much

bigger united impact; especially in

financing action. COP23 must make

progress so that in 2018 governments

complete the full set of operational ways

and means under the Paris Agreement to

help government and non-government

actors alike meet the agreed goals to the

best of their ability.

Great advances continue to be made,

showing the Paris Agreement is not a

chain, broken by any weak political or

economic link, but an ever deepening and

widening web of influence and agreement.

These are only a few of many, many

examples:

• China announces five pilot zones

for ‘green finance’, where financial

institutions will provide incentives to

fast track green industries and new

financing methods.

• Several countries, including France

and the U.K., announce dates when

fossil fuel cars will be gone, replaced by

electric vehicles.

• Over 100 multinational companies

pledge to source 100 per cent

renewable energy for their operations

under an initiative called RE100 by The

Climate Group.

• Over 250 US mayors commit to procure

100 per cent renewable energy for their

cities by 2035.

• Moody’s reports green bond issuance

worldwide could cross US$200 billion in

2017, doubling the 2016 record.

Sectors previously seen as latecomers

to climate action are also moving. For

example:

• In cement (around 5-6 per cent of

global emissions), HeidelbergCement in

Germany and India’s Dalmia Cement are

committed to reducing their greenhouse

gas emissions.

• In iron and steel (around 4 per cent),

Sweden’s Vattenfall aims to use

hydrogen instead of coal to become the

first manufacturer of steel with almost

no carbon dioxide.

Meanwhile, much better coordination

of climate action is now required among

governments, cities, states, business

and multilateral development banks and

institutions. A country, company or citizen

needs the most relevant, simple and timely

channels to seize the major opportunities

available in cutting emissions and

protecting themselves against climate

impacts and to access easily the

technology and finance to do it.

Insurance off ers a good example where

uncoordinated action will never work

because total risk must be dispersed

among all. The poorest with no insurance

suff er the worst. At COP23, we look

forward to seeing how even greater

coordination between governments and

the insurance industry can increase the

impact of the G7 InsuResilience plan to

extend insurance to an additional 400

million poor people worldwide.

The third COP23 key objective is for

governments to advance work on the full

operating system of the Paris Agreement so

that it is completed at COP24, in 2018. The

need for such a system reflects the uniquely

practical nature of the Paris Agreement –

the only multilateral agreement backed with

a set of concrete national plans to reduce

emissions and build properly sustainable

societies and economies.

If that is all there was – a set of diverse

promises to act on climate change – it

would be impossible to assess whether

the world was on track to meet the

Agreement’s goals. The objective,

therefore, is to deliver a comprehensive

operating system to encourage, guide

and report national and international

climate action – to act further, faster,

together – and to make a regular reality

check in the coming decades on whether

we are on track.

This year’s COP23 is itself a welcome

mirror of cooperation and coordination.

The conference is organised by Bonnbased

UN Climate Change, is presided

over by the small, developing Pacific

island state of Fiji as President, and is

organisationally and logistically supported

by G7 member Germany, with further

support from the German state of North-

Rhine-Westphalia and the City of Bonn.

A central goal for the Fijian Presidency

of COP23 is to forge this essential ‘Grand

Coalition’ to accelerate climate action

before 2020 and beyond.

Further, faster, together in Bonn.

COP23 & BEYOND

19


COP23 & BEYOND

COP23:

BRINGING

PARIS TO LIFE

We bring an urgency

to the process based on our

experience and perspective

as a small island country.

Tropical cyclone Winston leaves a trail of destruction in Fiji last year

20


H E Nazhat Shameem Khan,

Chief Negotiator for the COP23

Presidency, Fiji

We meet at COP23 in Bonn with

the global community at a

crossroads in our collective

response to climate change. The choices

we make now will decide the fate of our

planet and have a huge impact on the lives

of all 7.5 billion people on earth. So it is vital

that every global citizen is aware of what is

at stake and what needs to be done.

Fiji has assumed the role of the COP23

presidency as the first Pacific Small Island

Developing State to be given charge of

the ongoing UN climate negotiations. I

am often asked if this means COP23 will

be a Pacific COP. My answer is this: while

Fiji will preside over the negotiations on

behalf of all countries, from all corners of

globe, there is absolutely no doubt that we

bring an urgency to the process based on

our experience and perspective as a small

island country. In doing so, we will give

voice to the concerns and aspirations of

one of the most climate vulnerable regions

on earth.

For us, the urgency is clear. In Fiji’s case,

a tropical cyclone last year killed 44 of our

loved ones, left many thousands of our

people homeless and destroyed one-third

of our GDP. Our neighbours in Vanuatu

suff ered a similar disaster in 2015. And

those of us living in vulnerable nations

know the worst is yet to come. Indeed,

three of our neighbours – Kiribati, Tuvalu

and the Marshall Islands – face being

submerged by the rising seas altogether.

The stakes could not be higher.

The Paris Agreement commits us to

keeping the average global temperature

well below two degrees over the industrial

age and pursue eff orts to limit it to 1.5°C.

COP23 & BEYOND

21


COP23 & BEYOND

Our game plan is

this: To keep the global

climate negotiations on

track. To get everyone to

fully implement the Paris

Agreement and limit the

global temperature to 1.5°C

above that of the industrial

age. And to get there, we

will be reminding everyone

of a very simple fact. We

will only get there with

teamwork. Every nation

committing itself to climate

action in the way that Fiji

has. The citizens of the

world coming together as

one world – Team World –

and doing what we must do

to save our precious planet

from the ravages of climate

change.

Frank Bainimarama, Prime Minister

of Fiji and President of COP23

The diplomacy and dialogue that led to

this Agreement was one of the great feats

of our age. But now it’s time to accelerate

the pace and raise the ambition, because

the evidence shows that we have no time

to waste. Now it’s time for the hard work

– to put words into action to bring Paris

to life; otherwise the Agreement is just a

piece of paper.

It is no mystery that there have

been significant shifts in the political

environment since Fiji first assumed the

role of the incoming Presidency last year.

While we were of course disappointed by

the decision of the Trump Administration,

it is clear that the overall global desire to

keep up the momentum and move forward

with even greater ambition is unshakeable.

In fact, we have been extremely

encouraged by our consultations over the

course of the year –with both parties and

non-state actors – and have received very

clear feedback on their desire for COP23

to be a visionary COP. By this I mean

a COP where outcomes are measured

against their capacity to achieve the

vision of the Paris Agreement: the vision

of limiting global warming to 1.5°C,

which is now the target for the world.

Fiji is committed to this goal and we are

determined to make progress at COP23

that is balanced and shows a resolve

Now it’s time to accelerate the

pace and raise the ambition, because

the evidence shows that we have no

time to waste.

that next year the negotiations are going

to result in a set of guidelines that make

Paris operational.

To achieve this, we will rely on the Fijian

concept of talanoa. This is a process of

inclusive, participatory and transparent

dialogue that builds empathy and leads

to decision-making for the collective

good. This concept is about listening to

each other, learning from each other, and

sharing stories, skills and experiences. We

hope that by focusing on the benefits of

action, we will be able to move the global

climate agenda forward.

As a symbol of our Presidency, we will

be placing a Fijian ocean-going canoe

– a drua – in the main foyer in Bonn. It

is a reminder to the entire world that we

are all in the same canoe when it comes

to climate change. No-one is immune

to its impact. And in the forthcoming

negotiations, we must fill the sail of that

canoe with a collective determination to

move the climate action agenda forward.

I appeal to every global citizen to join me

on this journey for the sake of all humanity

now and the generations to come.

22


LOOKING

COP23 & BEYOND

FORWARD

TO COP24

Jan Szyszko,

Minister for the

Environment,

Poland

Planet Earth is the only home

for human beings and we have

to preserve it so that future

generations can live here. In striving to

achieve this, the Paris Agreement is one

of the most important treaties of our time.

Its core objectives and values – collective

responsibility, sovereign contributions

based on national circumstances,

cooperation between all stakeholders –

will lead us to the climate-neutral future

we promised in Paris to current and future

generations. With the necessary support for

developing countries, strong cooperation,

and an integrated and synergistic approach

to other environmental conventions, this

goal is within our reach.

The recent tragic extreme weather

events and the newest scientific reports

prove the relevance of Paris Agreement

goals, including the adaptation goal, and

the urgency of action to achieve them.

As nowadays no nation is fully immune

to climate change impacts, it is in the

interest of all, every community,

to hold the increase of

temperature to well below

2°C compared with preindustrial

levels, and to

adapt our behaviour so

that both human lives

23


COP23 & BEYOND

Credit: UMK/ A. Wiśniewski

The venue for COP24 in Katowice, Poland

24


In Katowice the treaty

must become a living framework

delivering its goals.

and economies can be best protected

against these impacts. We must cherish

biodiversity, water and soil resources, which

will continue to provide healthy food, natural

resources and energy for all in the years to

come. A clean and productive environment

is a universal cornerstone of sustainable

development and poverty eradication.

The main and most pressing task ahead

of all parties is the completion of the Paris

Agreement Work Programme not later

than COP24 in Katowice in December

2018. It will require significant efforts

of negotiators, supported by non-state

actors, as well as strong political signals

from the highest level. In Paris we adopted

the treaty; a vast majority of countries –

195 parties – have already signed it and

ratified or significantly advanced domestic

processes to do so. In Katowice the

treaty must become a living framework

delivering its goals.

COP23, presided over by Fiji, will be an

essential step towards successfully arriving

at our final destination in Katowice for

COP24. We need the firm leadership of the

Fijian presidency, and good results from

negotiations in all convention bodies. COP23

in Bonn must be a success. This is a precondition

of the success in 2018. Both Poland

and I personally, as the future President of

COP24, offer our Fijian friends and partners

both political and expert support during the

November conference in Bonn.

2018 Facilitative Dialogue is another

important event during COP24. The

parties to the Agreement will for the

first time have an opportunity to have

a conversation about their Nationally

Determined Contributions. They will gain

better understanding of the objectives of

other countries as well as understanding

how cooperation may help to achieve

their sovereign goals faster and better.

Universal participation in the dialogue,

and the engagement of countries in

collaborative work, will strengthen a

momentum for future global climate

action, for building both institutional

and human capacity in developing

countries, mobilising climate finance

as well as development and transfer of

technologies. We truly believe that thanks

to the consultations the Presidency of

COP23 has been having in the course of

2017, the design of the dialogue will best

reflect the diverse views and expectations

of the parties.

The national sustainable development

policy of Poland aims at balancing social,

environmental and economic aspects,

and includes efforts in many industrial

sectors, including power as well as forestry,

agriculture and municipalities. It is our

primary political goal to ensure energy

security and security of supply, and to avoid

energy poverty. Poland is taking action to

deploy clean coal technologies, to improve

energy efficiency and reduce energy

consumption without impeding the quality of

life. We strive to increase emission removals

by forest ecosystems and soils to help regain

biodiversity and enhance ecosystem services

to the society. District heating systems and

promotion of climate neutral geothermal and

biomass energy, improved insulation of public

and private buildings or better resource

management leading to implementation of

circular economy underpin our continuous

climate oriented endeavours. Our emissions

have already peaked, almost 30 years ago,

and since then continue to fall while the

economy keeps growing. We are ready to

share our experience with all parties now. We

will be doing it during the Polish Presidency

of COP24.

COP23 in Bonn and COP24 in Katowice

will be instrumental to maintaining and

reinvigorating the 2015 political momentum.

For this to happen, we need everybody

on board – those who are already Parties

to the Agreement, as well as other Parties

to UNFCCC. Personally, I am convinced

that climate action is an opportunity for

every nation and the entire world for

peaceful, sustainable development and

improving the life standards of all people.

Therefore, the adoption of Paris Agreement

implementation package will mark the

beginning of the better future for our only

home – the Earth.

The Former Secretary-General of the

United Nations, Ban Ki-moon, said: “There

is no plan B, as we do not have planet

B.” I fully subscribe to this statement and

encourage everybody to do even more,

to make COP23 and COP24 the most

successful COPs for all.

25

COP23 & BEYOND


POLICY

IMPACT OF U.S.

ON THE PARIS

Sue Biniaz, Senior Fellow at the UN

Foundation, and former Deputy Legal

Adviser and lead climate lawyer at

the U.S. State Department.

26

The Paris Agreement is noteworthy

not only for addressing resilience

but for being designed to be resilient

itself. For environmental, economic and

political reasons, the Agreement needed

to attract broad participation, as well as

maintain it over the long term. It includes

many relevant features that may help

insulate it from U.S. withdrawal.

• Most significantly, the Agreement allows

parties to design their own Nationally

Determined Contributions (NDCs) based

on their respective circumstances.

Contributions are not negotiated with

other countries or derived from a topdown

directive. This approach invited

wide participation at the outset and, in all

likelihood, will help to maintain it.

• Unlike the Kyoto Protocol, which required

further negotiations and ratifications with

respect to subsequent emissions targets,

Paris is self-sustaining. Parties regularly

update their contributions, without the need

for negotiations or ratification processes

that can be cumbersome and cause delays.

• The Agreement will be successful only

if, in the aggregate, ambition marches

onward and upward. Otherwise, its global

temperature goal cannot be realised.

However, it recognises that, along the way,

individual parties may face diff iculties,

whether substantive or political. It therefore

carefully combines provisions of a legally

binding and a hortatory nature, and a Party

need not exit the Agreement if it needs

to change its contribution or if it cannot

increase ambition in its next one.

• While sub-national governments and

other non-State actors cannot formally join

the Agreement, the Paris outcome includes

multiple ways in which they can take on

commitments and otherwise participate in

international climate action.

It is unfortunate that the United States

has expressed its intent to withdraw, despite

the fact that the Agreement accommodated

U.S. concerns, including with the Kyoto

model. The Administration might have

remained in the Agreement and stuck to

the existing U.S. emissions target, even if it

considered that it was unlikely to achieve

it. Alternatively, it might have remained in

the Agreement and adjusted the U.S. target,

in a ‘nationally determined’ manner, to

better reflect the Administration’s climate

and energy policies. While many would

probably have criticised such a move, it

may also have been viewed as the less bad

of two regrettable options.

In any event, the question now is how

resilient the Agreement will be, assuming

U.S. withdrawal in 2020.

• One issue is whether other countries

will withdraw or be deterred from pursuing

their existing NDCs as a result of the U.S.

intent to withdraw. At least so far, this does

not appear to be the case. The nationally

determined nature of contributions may

be one reason why countries continue to

be committed to them – i.e. they designed

their own NDCs irrespective of what

other countries were committing to do.

In addition, to the extent other countries

are taking into account U.S. climate action

in deciding on their own action, they are

likely to look at the explosion in activity and

commitments on the part of U.S. states,

cities, businesses, and other non-federal

actors. The Paris outcome, through various

portals, platforms, and opportunities, has

facilitated the ability of such actors to reflect

the high level of domestic U.S. support for

the Paris Agreement, and climate action

more generally. Such support allows

other countries to judge U.S. ambition in

a manner that goes beyond the policies

solely of the U.S. federal government.

• A second issue is the extent to which

U.S. withdrawal may aff ect other countries’

future action, including their NDCs. Here,


WITHDRAWAL

AGREEMENT

POLICY

it is less clear what the impact of U.S.

withdrawal will be, particularly if the

absence from Paris is prolonged. As noted,

the Agreement’s nationally determined

approach provides parties with flexibility.

Perhaps, again, irrespective of U.S.

withdrawal, countries will focus on robust

U.S. non-State action or determine, on other

grounds, that it is in their interest to remain

in the Agreement and continue taking

ambitious climate action.

• A third issue is what impact U.S.

withdrawal may have on the various

guidelines that the Agreement asks the

CMA to adopt. Here, in the absence

of strong U.S. engagement, special

attention will need to be paid by others

to maintaining the Paris Agreement’s

essential balances regarding, for example,

diff erentiation and bottom-up/top-down

approaches. This will be important not only

for preserving the Agreement’s integrity

but, more specifically, in order to leave open

the option for a future U.S. Administration to

rejoin the Agreement.

• Finally, it goes without saying that

the leadership of the United States,

along with that of many other players,

was essential to securing the Paris

Agreement and wide participation in it.

A pro-Paris U.S. Administration would

probably have devoted substantial

diplomatic energy, as well as resources,

to promoting climate-friendly policies

around the world, including in

developing countries. It is perhaps in

this realm, without such leadership, that

the resilience of the Paris Agreement will

be most severely tested.

In the absence of strong U.S.

engagement, special attention

will need to be paid by others to

maintaining the Paris Agreement’s

essential balances.

27


POLICY

AMERICA PLEDGES

TO FIGHT CLIMATE

CHANGE, WITH

OR WITHOUT

WASHINGTON

Michael Bloomberg, UN Special

Envoy for Cities and Climate Change

and Co-Chair of America’s Pledge

The United States has recently faced

some of the most devastating

hurricanes in our history, as well

as one of the worst wildfire seasons in

decades. Yet these are far from isolated

incidents. Record floods recently killed

more than a thousand people in India,

Nepal, and Bangladesh. Hundreds were

killed after torrential rains triggered a

mudslide in Sierra Leone. While it is

impossible to attribute any particular

weather event to climate change, the

science is clear: warming air and oceans

are supercharging weather events around

the globe.

The Paris Climate Agreement was

a breakthrough in global relations,

and while President Trump has since

announced that the US will pull out of the

agreement in November 2020, the truth

of the matter is that, when it comes to

climate action in America, Washington

will not have the last word. In fact, I am

confident that the US will meet its Paris

commitment – even without leadership

from Congress or the President.

There is good reason to be optimistic

that we will: over the past decade,

the US has led the world in reducing

greenhouse gas emissions – and

Washington had almost nothing

to do with it. Congress passed no

law to reduce emissions, and even

before President Trump was elected,

federal courts had placed on hold

President Obama’s effort to place

stricter emission controls on the

power industry. America’s progress

has been driven almost entirely by

mayors and governors, who adopted

All around the world, cities, regions,

businesses, and citizens are taking a

leading role in fighting climate change.

28


Credit: Flickr

POLICY

Mike Bloomberg visits Brussels to meet

with the Global Covenant of Mayors

ambitious green agendas; business and

technology leaders, who drove down the

cost of alternative energy (both natural

gas and renewables), invested in energy

efficiency, and committed themselves to

clean energy targets; and consumers,

who led the way in shutting down nearly

half of the US coal-fired power plants.

In the wake of the President’s

announcement last June, each of these

groups came forward to re-affirm its

support for the Paris agreement. Each

recognises that it is in its own best interest

to act, and the President’s decision has

had the event of galvanising each to do

more. To build on that momentum, and

to show the world that Americans are

determined to continue leading on climate

change, California Governor Jerry Brown

and I created America’s Pledge – an

initiative to compile, quantify and track

America’s efforts to dramatically reduce

the nation’s carbon footprint.

With this data, we will create a

comprehensive report that can be

compared to the Nationally Determined

Contributions that every other nation

submitted as part of the Paris Agreement.

These reports will be made available to

the UN and all the parties to the Paris

Agreement – so that the world can still

hold America accountable for meeting

our targets.

But America’s Pledge will do more

than report on our progress. It will also

empower climate leaders to be even

more ambitious, by offering guidance that

can help cities and companies finance

green infrastructure while creating new

jobs. It will also provide ideas on ways

mayors and business leaders can make

their cities more resilient to the climate

impacts we know are coming. And it will

help local officials develop policies that

encourage investment in clean energy.

When it

comes to climate

action in America,

Washington will

not have the last

word.

All around the world, cities, regions,

businesses, and citizens are taking a

leading role in fighting climate change

– and that is as it should be. Cities are

responsible for about 70 per cent of all

greenhouse gas emissions. One of the

best ways that national governments can

fight climate change is to empower cities

with greater authority over their buildings,

energy sources and transport networks –

and to help them access capital that can

be used to finance investments in greener

and cleaner infrastructure.

Local leaders are acting because

reducing emissions is not only good

for the climate; it is also good for our

health. When local governments clean

their air, and when they invest in mass

transit and parks, they make themselves

more attractive places to live. And where

people want to live, businesses want to

invest. The future belongs to cities that

embrace that idea.

Ultimately, winning the war on climate

change requires leadership from all

nations, but it is important to remember

that leadership is not confined to national

capitals. In many countries, including

the US, success will be driven from the

ground up.

29


POLICY

EUROPE LEADS

BY EXAMPLE ON

CLIMATE ACTION

Jos Delbeke, Director General,

European Commission Directorate-

General for Climate Action

The European Union (EU) has long

demonstrated global leadership

on climate change, one of the

greatest challenges of our time. In

2016, together with countries round the

world, we ratified the Paris Agreement,

allowing its early entry into force. And

yet the road to achieving our common

goals may not always be smooth. Along

with so many of our climate partners

worldwide – nations, regional and local

decision-makers, businesses, civil society

groups and citizens – the EU did not

hide its deep regret at the US President’s

announcement this year to withdraw the

US from the Paris Agreement. However,

the international community has shown

unity and resolve to follow through on

the Paris objectives. The EU has made it

very clear that the world can continue to

count on our leadership and support. We

are stepping up our partnerships around

the world, to help build strong, sustainable

economies and societies that are resilient

to the impacts of climate change.

What is now clear is that the EU is

anything but alone – the global lowcarbon

transition train has already left

the station. Over 85 per cent of the

Paris signatories have now ratified the

The EU did not hide its deep regret

at the US President’s announcement

this year to withdraw the US from the

Paris Agreement.

Agreement and are getting on with

implementation. Like us, they see Paris

not only as a path for preserving the

environment, but also the essential

growth engine for our economies. The

facts keep speaking for themselves: in

2016, investment in renewables capacity

outstripped investment in fossil fuel

generation for the fifth year in a row;

in each of the past three years, global

economic growth was not accompanied

by a rise in greenhouse gas emissions.

This year’s UN climate conference

(COP23) in Bonn, Germany, will be

guided by the presidency of Fiji, the

first small island state to have this role.

We have important progress to make in

Bonn. COP23 and the months that follow

will be crucial for ensuring successful

implementation of the Paris Agreement.

By the end of 2018, when countries will

gather for COP24 in Katowice, Poland,

parties should adopt a work programme

for Paris and take stock of our collective

contributions to the Agreement, through

the facilitative dialogue.

The EU has arrived at COP23 with an

important message to stakeholders across

Europe and our global partners: we are

getting on with the job at home. To ensure

the EU meets its Paris pledge to reduce

greenhouse gas emissions by at least 40

per cent by 2030 compared with 1990, the

European Commission has put forward a

range of legislative proposals in the past

couple of years, notably to make the EU

emissions trading system (EU ETS) fit for

2030, set member states 2030 emissions

targets for non-ETS sectors and integrate

greenhouse gas emissions and removals

from land use and forestry into the EU’s

30


climate and energy policy framework.

These files are now being negotiated by the

European Parliament and Council and we

look forward to final agreements, so we can

get legislation in place and therefore lay the

foundations for reaching our 2030 goals.

In Europe, we have a wide range of

policies to drive and enable the shift

towards a low-carbon economy. As part

of our integrated Energy Union, we came

forward late in 2016 with the Clean Energy

for All Europeans package, which will

give a strong push to the clean energy

transition and create jobs and growth.

It will adapt our regulatory framework

to put energy efficiency first and foster

the development of renewable energy.

We have also put forward a proposal on

governance, under which member states

will have to prepare integrated climate and

energy plans, to provide a clear picture

of where we need to go, give investors

certainty and help identify investments

needed for the clean energy transition.

We are also working to transform

mobility in Europe and put the EU transport

sector firmly on a path to sustainability.

Following an ambitious set of proposals in

May – the ‘Europe on the Move’ package –

we have just this month put forward new

CO 2

emissions standards for cars and vans

for 2021 onwards, to stimulate uptake of low

and zero-emission vehicles.

The EU’s experience of implementing

ambitious climate and energy policies in

the past two decades shows that such

action pays off, economically as well

as environmentally. It creates more and

better jobs as well as bringing innovative

technologies and more sustainable

The Clean Energy for All

Europeans package will give a strong

push to the clean energy transition and

create jobs and growth.

products to the market. Today, the EU is the

world’s most CO 2

-efficient large economy,

according to the European Environment

Agency’s emission database (EDGAR).

The strong engagement of businesses,

civil society and cities and regions

continues to be a cornerstone of European

success in driving forward responses to

climate change. And so is the committed

support of our citizens, with a survey

earlier this year showing that three

quarters of Europeans see climate change

as a very serious problem and eight in ten

agree that fighting climate change and

using energy more efficiently can boost

the economy and create jobs.

The extreme temperatures across Europe

in summer 2017 were a stark reminder

that we must also address the impacts

of climate change. We are making good

progress in implementing the EU Strategy

on Adaptation to Climate Change and we

continue to support non-state actors in as

many ways as possible. Our partnerships

already include countless businesses, cities,

local authorities and communities that are

committed to taking concrete action.

The Covenant of Mayors for Climate and

Energy, an alliance of local and regional

authorities voluntarily committed to taking

climate action and sharing experiences,

has exceeded all expectations. Last year

it went global, joining forces with the

Compact of Mayors to create the Global

Covenant of Mayors for Climate and

Energy, and now counts over 7,600 cities.

Now more than ever, the world is

looking to Europe for climate leadership.

So our task is to keep delivering and

driving the low-carbon transition forward –

leading by example.

31

POLICY


POLICY

HIGH AMBITIONS

FOR FRANCE’S

CLIMATE

TRANSITION

Nicolas Hulot,

Minister for Ecological

and Solidary Transition,

France

Credit: A. Bouissou, French Ministry for Ecological and Solidary Transition

All over our planet, climate

disruption is throwing lives into

disarray – particularly among the

poorest and most vulnerable communities.

The frequency with which extreme climate

events are occurring has provided a

startling glimpse of what could become

the norm in the 21st century.

Although the situation is extremely

worrying, it is by no means irredeemable;

in fact, all the tools we need to reverse this

trend are already at our disposal. While

humanity has spent decades living within

a system that threatens our survival as a

species, we are also capable of building a

society that is more moderate and more

sustainable, founded on the principles of

solidarity – inclusive cooperation. COP21

showed that it is possible to achieve what

many believed to be unattainable: bringing

world leaders together to build the first

global climate agreement, and setting

objectives that will bind us together over

the coming decades.

Today, the challenge we face is greater

than ever. As political leaders, we are the

guardians of the Paris Agreement. It is our

responsibility to do all that is within our

power to uphold our commitments, by

coordinating the many stakeholders who

have already been mobilised to combat

climate change. This is the purpose of

the Climate Plan, unveiled by the French

government in July 2017. It aims to move

32


faster and take our eff orts further with

regard to climate change. The planned

goal of reducing our country’s greenhouse

gas emissions by 25 per cent was not

suff iciently ambitious to meet the objectives

set in December 2015. We are now aiming

to achieve carbon neutrality by 2050.

In order to do so, we must first move

away from all activities with the potential

to contribute to increased greenhouse

gas emissions. With that in mind, the

French Parliament is currently debating a

bill that will bring an end to prospecting

and extraction of both traditional and

unconventional hydrocarbons. France

has become the first country in the world

to put forward a text that will initiate a

progressive and irreversible end to oil and

gas production within its borders by 2040.

This ambition is just as evident in our aim

to end the sale of petrol and diesel cars

by 2040. The same is true for electricity

production, for which we will cease using

coal power plants by 2022.

The transformations under way also

represent a wealth of opportunity for

companies active in the green economy.

Conditions have never been so favourable:

the renewable energy sector is progressing

at an unprecedented rate, technological

advances are allowing us to build homes

that consume little to no energy, and more

and more people are choosing to use clean

methods of transport. Our citizens are

aware of the threat that faces them, and are

refusing to accept consumption methods

that endanger their environment, their

health and their future.

We are determined to support all those

who are working to stimulate innovation

and advance our scientific understanding.

To encourage climate research, the French

president has already launched a platform

– entitled ‘Make our planet great again’ –

for the most promising projects. Because

our future solutions are inherently linked to

scientific advances, France will be hosting

the 47th plenary session of the IPCC in the

spring of 2018.

We will also be working to promote

the concept of green financing. Our

ambition is to put France at the centre of

a movement to improve the way in which

climate risks are taken into consideration

in financial regulations. With its law on

Energy Transition for Green Growth,

France has become the first country in

the world to require investors to publish

information on how their investment

policies take into account environmental

criteria, social factors and quality of

governance. We will also encourage our

European and international partners to

adopt the same approach.

Finally, we wish to support all business

sectors that will drive the evolution of

France

has become the

first country in

the world to put

forward a text

that will initiate a

progressive and

irreversible end

to oil and gas

production within

its borders by

2040.

Credit: A. Bouissou, Terra, MTES

our economy. I refer in particular to the

circular economy, which accounts for

over 800,000 jobs in France. Economic

prospects are highly encouraging:

recycling a tonne of waste generates

30 times more jobs than sending it to

landfill. We are currently working on a

roadmap for the circular economy, which

will be published in 2018 and will give real

momentum to the pursuit of sustainable

production and consumption.

This is France’s vision for solidarity and

ecological transition. This transition is

for everyone, and will require everyone’s

involvement. Companies and investors,

as drivers of innovation, also have a role

to play in this approach. Our objective is

three-fold: to bring an end to excessive

depletion of our natural resources, to

direct capital towards economic activities

that are compatible with our climate

commitments, and to propose adaptive

solutions that will protect our communities

from climate-related disasters.

We expressed this vision at the

recent UN General Assembly with the

presentation of the proposed Global Pact

for the Environment, which will serve as a

basis for environmental rights throughout

the international community. Over the

course of COP23, the upcoming Climate

Summit in December 2017, and beyond,

we will continue to place solidarity firmly

at the centre of our ambitions for our

society.

POLICY

33


POLICY

ELECTRIFYING

NORWAY

Vidar Helgesen, Minister of Climate

and Environment, Norway

What strikes foreigners on

the streets of Oslo is the

large number of Teslas and

other electric vehicles. Norway sells

the highest proportion of electric cars

in the world relative to the number of

inhabitants. Recently we celebrated

100,000 electric cars on Norwegian

roads, and if one looks at the most

popular models in the first half of 2017,

one has to look to the 10th spot to find a

conventional fossil-fuelled car.

In June 2017, the share of electric in new

car sales was 27.7 per cent. For the first

time, more electric and hybrid cars were

sold than diesel and gasoline cars. Our

electric cars policy attracts interest from

international media as well as politicians.

It might seem a paradox that Norway,

as a large oil and gas exporter, does

its best to reduce the use of fossil fuels

in transportation. Norway is, however,

blessed with both renewable and fossil

resources. While we export most of the

oil and gas, domestic power generation is

based on renewable energy sources. This

is, indeed, a unique situation, which we

will build upon in our policy to create a

low emission society.

During the last hundred years,

hydropower has paved the way for the

Norwegian economic and industrial

development. Small local rivers

brought power to small enterprises

and households. In addition, we have

developed large hydropower projects

that have made energy-intensive industry

in Norway a success. The renewable

share of the power generation mix

is 98 per cent, where 96.5 per cent

comes from hydropower. In Norway,

we have large hydropower reservoirs

and interconnectors to Sweden and the

Continent, allowing us to offer the Nordic

and European power markets backup

capacity when needed. The hydropower

system works very well together with

variable renewable energy sources like

wind power and solar PV.

Heating and transport still depend

on fossil fuels, and the total renewable

energy share in Norway is 69 per cent,

calculated in accordance with the EU

Renewable Directive. We will continue

our efforts to increase the use of

renewables in heating and transport. Use

of oil for heating will be phased out. We

have started electrifying Norway with

renewable energy sources.

The transport sector is key in reducing

greenhouse gases and increased energy

efficiency. Our technology shift to electric

cars is being achieved by offering

generous incentives. The problem right

All around the world, cities,

regions, businesses, and citizens

are taking a leading role in fighting

climate change.

Hydropower is the dominant source of

power generation in Norway

34


POLICY

Norway sells the highest proportion of electric cars in

the world relative to the number of inhabitants.

now is to build charging stations fast

enough to keep pace with the sale of

electric cars. We have also supported

electric driven ferries. Today, more than

50 battery electric or hybrid electric car

ferries are either in the planning process

or in construction in Norway. Electric

ferries will become a normal sight in the

coming years. The technology shift goes

very fast. We are already seeing plans

for electric driven trucks, ships and even

short-distance aeroplanes.

Reduced costs of renewable energy,

in particular solar PV and wind power,

and reduced battery costs, are spurring

a very fast deployment of renewable

energy. Norway has installed rooftop

solar PV to charge the electric trucks.

We shall certainly see more examples

as soon as business actors realise

opportunities.

According to the IEA/IRENA report

Perspectives for the Energy Transition,

launched in March 2017, energy efficiency

will be the most important energy

measure to achieve the long-term

temperature goal of the Paris Agreement.

Norway is one of the front runners

when it comes to building codes. The

government has supported large energy

efficiency projects in energy intensive

industries. Digitalisation and energy

saving technologies, such as LEDs,

With almost 100 per cent

renewable power generation and our

policy on energy efficiency, heating

and transport, it should be possible

to achieve a close to 100 per cent

renewable share in the energy mix.

offer numerous opportunities to reduce

energy consumption and greenhouse

gas emissions. Taking advantage of

digitalisation opportunities and disruptive

technologies will be part of green

transformation in Norway.

Exploration of oil and gas in Norway

will not last for ever. Other sectors and

business opportunities must replace

the oil and gas sector when it comes

to value creation and employment. The

government has published a strategy

on green competiveness, and we

will follow up the roadmaps for a low

emission future from as many as 15

different sectors. It is encouraging to

see the enthusiasm driving this vision of

business opportunities combined with

low emissions.

With almost 100 per cent renewable

power generation and our policy on

energy efficiency, heating and transport,

it should be possible to achieve a close

to 100 per cent renewable share in the

energy mix. Moreover, our export of

renewable energy can contribute to an

increased share of renewable energy in

the power generation in other countries.

Our policy to incentivise use of electric

cars has already encouraged car

manufactures to develop electric cars and

launch new models in Norway. Teslas and

other electric cars will be a more common

sight in cities worldwide in the future.

35


POLICY

THE DANISH

WAY TO

GREEN

GROWTH

36


Lars Christian Lilleholt, Minister of

Energy, Utilities and Climate, Denmark

Since 1990 Denmark has cut

its greenhouse gas emissions

by 27 per cent, kept its energy

consumption constant and still managed

to increase its GDP significantly. Last year

alone, the World Energy Council, the World

Bank and the Cleantech Group published

reports ranking Denmark as one of the

world’s top performers when it comes

to framework conditions for renewable

energy investments and the ability to

develop new clean-tech companies.

Of course, these top results have not

appeared out of nothing. Instead, they

have been fostered through decades of

hard work finding cost-eff ective solutions

to limit the risks of global climate change

and to seize the opportunities that follow

the green transition.

There are six main reasons for

Denmark’s success. First, the overarching

and long-term policy decisions for Danish

energy have been characterised by broad

political agreement between most parties

in Parliament since the 1970s. This creates

political stability, which is essential to

investors who think for the long term.

The current Danish government has set

ambitious long-term goals, thus continuing

this tradition. It is the government’s goal

to cover at least half of Denmark’s total

energy needs with renewable energy in

2030 and to make Denmark independent

of fossil fuels by 2050.

Second, via a market-based approach

to financial incentives, Denmark has

advanced development in clean energy

technology development, improved

Credit: State of Green POLICY

37


POLICY

It is a key aim to work for a

European electricity market which

is integrated, market-based, and

incentivises flexibility both on the

supply and demand side.

competition within the clean energy sector

and lowered the costs of energy. Right

now, wind power accounts for more than

40 per cent of the Danish final electricity

consumption, expected to rise to about 50

per cent by 2020, owing to the significant

onshore and offshore developments since

2012. In the future, however, we must

continue to develop a regulatory setup

that can ensure a market-based path to

further clean energy development.

Denmark has a wealth of experience

with very effective tendering procedures.

At the end of 2016, Denmark held a tender

for the new 600MW offshore wind farm

Kriegers Flak. The tender was won by a

bid of only five euro cents per kWh, a new

world record at the time. In September

2017 the government went further along

the path to market-based solutions for

renewable energy sources, reaching an

agreement on partially technology-neutral

tenders with wind and solar PV for 2018

Credit: State of Green

38

and 2019 for a combined DKr1 billion.

Third, good conditions for research

demonstration and development have

been vital for the continued development

of clean and more effective technologies.

For example, at the Danish national test

centres for wind turbines in Østerild

and Høvsøre, which the government

recently agreed to expand, we are

fostering close cooperation between

Danish universities and the wind power

industry. The test centres encourage the

increased development and production

of wind power technology in Denmark,

which is consistent with the government’s

ambition of maintaining and nursing the

best possible framework conditions for the

renewable energy industry. In this way, we

can fulfil our ambition of covering at least

50 per cent of our energy needs in 2030

from renewable energy.

Furthermore, Denmark is part of Mission

Innovation (MI) and we are committed

Credit: State of Green

to doubling public investments in clean

energy research development over a

five-year period, and to opening up the

Danish Programme of Development and

Demonstration of Energy Technology

to foreign investors. This is good news

for Denmark and the global climate, but

equally good news for other MI members

who can profit from cooperation and

investment opportunities.

Fourth, Denmark benefits from

being part of a well-functioning and

liberalised electricity market which is

highly integrated with our neighbouring

countries. Consequently, the wholesale

price of electricity in Denmark is the

same as in at least one neighbour

country 90 per cent of the time. When

the wind blows in Denmark, Danish

electricity is sold to Norway, Sweden

and Germany and, conversely, when the

wind is not blowing, Norway can export

electricity back to Denmark. This ensures

security of supply, supports a high level


POLICY

The export of energy technology

makes up around 11 per cent of

Denmark’s total exports of goods, one

of the highest shares in Europe.

of integration of renewable energy into

the electricity market, and provides low

prices for the consumers.

Our cooperation with our neighbouring

countries underlines the fact that national

energy frameworks cannot stand alone.

Large-scale penetration of renewable

energy is most effectively happening by

maximising the geographical area for

balancing across borders, so weatherdependent

production patterns can

complement each other. To that end, it is a

key aim to work for a European electricity

market which is integrated, market-based,

and incentivises flexibility both on the

supply and demand side.

Fifth, Denmark is actively committed

to sharing experience with the rest of the

world. As a consequence, Denmark has

government-to-government cooperation

with 12 countries across the globe with a

focus on wind power production, energy

efficiency, district heating and intelligent

energy planning. The same is true for our

work in multilateral organisations where

Denmark actively seeks to exchange best

practice on these topics where the country

has valuable experience to share.

Sixth, these effects have helped

develop a highly competitive energy

technology sector in Demark. As a result,

the clean energy transition has gone

hand in hand with strong exports and

economic growth. The export of energy

technology makes up around 11 per cent

of Denmark’s total exports of goods, one

of the highest shares in Europe.

It is, however, too soon to fully enjoy the

fruits of our labour. The Paris Agreement

sets the direction for a green transition

and sends a strong signal to both civil

society and the private sector that the

world is moving in a green direction. To

achieve the goals of the Paris Agreement,

investments in the green transition

are imperative. We should use this as

an opportunity to share our valuable

experiences and competences.

39


POLICY

FINLAND LEADS

THE TRANSITION

TOWARDS A

CIRCULAR

BIO-ECONOMY

Kimmo Tiilikainen, Minister of the

Environment, Energy and Housing,

Finland

40

Teemu Kuusimurto / Environmental Administration

We live in an era where the linear

economic model has come to

its end, and the world has to

move towards a revolutionary circular

economy where the value of materials

and products is maximised and kept in

use for as long as possible. In Finland

we aim to lead this progress by example

and to create solutions to the global

sustainability crisis.

In the coming decades we will need

more of everything based on natural

resources globally: food, feed, water,

energy, materials and space. At the same

time the global capacities to produce

these resources sustainably are severely

exceeded. In this situation, the basic

principles of the circular economy

– reuse, recycle, remanufacture and

repair – provide the key for a sustainable

future. We need a paradigm change to an

economy where waste is regarded as a

valuable resource and production takes

giant leaps towards more eff icient use of

resources; to an economy where people

circulate and share materials, services,

technologies, solutions and ideas.

We need a transition from a pipeline

economy to a circular economy.

Until recently, the role of renewable

resources has been hidden behind the

main façade of circular economy. This is

particularly noticeable in Finland, where

we have significant forest resources,

and eff ective tools and the requisite

knowledge for managing and using

them sustainably. In many countries and

even continents bio-resources are not

similarly in focus, despite substantial

capacities for sustainable bio-production.


We are testing new

solutions, particularly for

sustainable food systems,

timber construction,

recycling of municipal

waste and rehabilitation of

contaminated land.

The reason for this can be an abundance

of non-renewable resources as well as

technological solutions and economic

structures, which are not fit for sustainable

use of renewables.

However, a transition from a fossil

economy to a bio-based economy is also

essential for a sustainable future. We need

to combine the sustainable use of biobased

renewable resources and ‘carbon

cycles’ with a circular economy. And this

brings us to a circular bio-economy.

‘Bio-economy’ refers to an economy

that relies on renewable natural resources

to produce food, energy, products and

services. A bio-economy strives to

reduce our dependency on fossil and

non-renewable natural resources. In

transitioning towards bio-economy

we must respect the limits of natural

capacities and work along the principles

of a circular economy. A sustainable

bio-economy also has respect for

biodiversity and the recreational values

that our planet and nature off er us. It

aims to increase our understanding

of how dependent we are on nature,

natural resources and their sustainable

management.

In climate policy, Finland is strongly

committed to the Paris Climate

Agreement. We are determined to build

a carbon neutral Finland by 2045 and

to do our share in balancing global

emissions and carbon sinks in the

second half of the century. The circular

bio-economy plays an important role in

this work.

Finland’s aim is to lead the transition

towards a circular bio-economy by

example and concrete measures. We

are testing new solutions, particularly

for sustainable food systems, timber

construction, recycling of municipal

waste and rehabilitation of contaminated

land. In addition, the circular economy

roadmap for Finland, developed by

the Finnish Innovation Fund Sitra in

co-operation with key ministries and

stakeholders, includes more than 60

concrete projects and administrative

measures that support the concept of

circular economy.

In our national Sustainable Urban

Development programme we are focusing

in particular on low carbon, resourceeff

icient and smart services as well as

promoting equality and social cohesion.

The programme also aims to enhance

environmentally and socially sustainable

solutions and strengthen business based

on them. In addition, the government

supports urban circular economy and

cleantech initiatives and pioneering

networks, such as the Smart and Clean

Foundation in the Helsinki Metropolitan

Area, the wide networks of Finnish

Sustainable Communities (FISU) and

Carbon Neutral communities (HINKU).

We manage our forests, waters and

other natural resources wisely and

sustainably. After all, nature and forests

are our national treasures – and close

to the hearts of Finns. Despite rising

investments in the forest industry and

increasing use of wood, the growth of

forests in Finland exceeds the amount

harvested. With sustainable forest

management that promotes forest

growth and respects biodiversity, our

carbon sinks remain significant and we

are able to benefit from renewable raw

materials and energy for developing a

circular bio-economy. This also supports

the active role of forests in combating

climate change, as envisaged in the Paris

Agreement.

We must all be a part of the change. We

need to make more sustainable choices as

consumers – for example at the grocery

store – and make the most of shared

ownership and low-carbon living. But

most importantly, we need a revolution

in the way we think about the economy.

This change in our mindset, together

with bold policy measures and innovative

businesses, will foster the paradigm

change from fossil, pipeline economy to a

circular bio-economy.

41

POLICY


POLICY

A LOW

CARBON

FUTURE FOR

THE UK

Claire Perry, Minister for Climate

Change and Industry, UK

The UK is unequivocally committed

to a low carbon future. We were,

after all, the first country in the

world to introduce a statutory Climate

Change Act which binds us to five-year

carbon budgets and holds us to cutting

our harmful greenhouse gas emissions by

at least 80 per cent by 2050.

Since 1990, our economy has grown

by 67 per cent and, at the same time, we

have managed to reduce emissions by 42

per cent – the best performance of any G7

country. The latest research shows that the

UK was the fastest of any country in the

G20 to decarbonise last year.

Our low carbon economy is growing

rapidly and something we are determined

to build on and take advantage of as part

of the UK’s industrial strategy. Analysis

produced for the Committee on Climate

Change estimated that the low carbon

economy could grow 11 per cent a year

from now until 2030. In just 13 years, we

could see up to two million more UK jobs

in this sector. Because of the excellent

progress we are making I believe the

UK can lead the world in creating clean

technology jobs and businesses.

In October 2017, the UK government

published the Clean Growth Strategy. This

blueprint for a low carbon future will sit

at the heart of our industrial strategy. It

aims to help British businesses increase

their energy productivity by at least 20

per cent by 2030. It will ensure large

companies cut their bills, through an

industrial energy efficiency scheme, and

provide international leadership in carbon

We must ensure that British

businesses, innovators and

entrepreneurs also take full advantage

of the huge, global economic

opportunities this future brings.

42


POLICY

capture, usage and storage. We know this

technology holds promise and that the

costs need to come down – we intend to

lead that challenge.

Our Clean Growth Strategy will also

make our homes warmer and cheaper to

run with about £3.6 billion (US$4.75 billion)

to upgrade around one million homes

through the Energy Company Obligation.

On our roads, our strategy will help reduce

air pollution by increasing the number

of electric vehicles and creating the best

charging infrastructure in Europe. On top

of this, we will end the sale of new petrol

and diesel cars in our country by 2040.

Across the piece, we are spending

£2.5 billion (US$3.3 billion) in innovation

to support the transition to a low carbon

economy – a strong symbol of our

commitment to a low carbon future in

the UK.

From our point of view in government,

this is a win-win: we continue to cut

emissions and in doing so also cut

consumer bills, drive economic growth,

create high-value jobs and improve

our quality of life. But just having the

On our roads, our strategy will

help reduce air pollution by increasing

the number of electric vehicles

and creating the best charging

infrastructure in Europe.

government commit to a low carbon future

for the UK is not enough. We must ensure

that British businesses, innovators and

entrepreneurs also take full advantage of

the huge, global economic opportunities

this future brings. That is why we have

committed to the largest increase in

public spending for investment in science,

research and innovation in almost 40 years.

With the signing of the Paris climate

agreement – in which UK leadership

played a pivotal role – there is an

unstoppable global shift towards clean

technologies, infrastructure, industry and

jobs. It is critical that the international

community is fully behind this shift. We

need to make sure all countries maintain

their progress towards meeting the longterm

goals in the Paris agreement.

As the UK Prime Minister, Theresa May,

said in the Clean Growth Strategy: “Clean

growth is not an option, but a duty we owe

to the next generation.” There is a long way

to go, but I am confident that we are on

the right path and that the UK can help

lead the world down it.

43


POLICY

The Arctic is heating up

twice as fast as the rest of the

planet, with perilous impacts.

CLEAN

GROWTH

AND CLIMATE

ACTION IN

CANADA

44


Catherine McKenna,

Minister of Environment and

Climate Change, Canada

Canada’s Arctic is a place of

stunning beauty. It is found within

an expanse of sprawling tundra,

blue oceans, and biodiversity that includes

beluga and bowhead whales and polar

bears. It is also an area under severe threat

from the ravages of climate change. Today

the Arctic is heating up twice as fast as the

rest of the planet, with perilous impacts.

During an expedition I took north

this summer I heard from a young Inuit

teenager. He told me of the problems

facing his community: melting permafrost,

thinning polar bears and disappearing

caribou. Other Inuit described hunters

falling through melting sea ice – events

that are altering the way they have hunted

since time immemorial.

It is because of these impacts – and the

eff ects of climate change we see globally –

that the world is taking action.

In 2015, Canada and close to 200 other

countries signed on to the Paris Agreement;

and in doing so, committed to prevent

global average temperatures from rising

above 2°C, while striving to keep it below

1.5°C. But to accomplish this, to ensure a

better world for future generations, we must

ratchet up our ambition.

In Canada, we are working hard to do

our part. In 2016, together with provincial,

territorial and indigenous leaders, I

announced our made-in-Canada climate

plan – a plan to reduce our carbon

emissions, spark innovation and create well-

paying jobs. This is a plan that will ensure a

healthy environment and a strong economy.

In the 21st century, it is no longer

acceptable to pollute for free and send

the tab to the next generation. In Canada

we will soon be pricing carbon emissions

across our entire country. We are putting

a price on what we don’t want – pollution

– and investing the revenue in things we

do want, such as clean energy, public

transport, and more good jobs. Already 80

per cent of Canadians live in a province

that prices carbon emissions.

Of course, pricing pollution is just one

action needed to address climate change.

To further reduce our emissions and

foster clean growth, we are improving our

public transport, constructing buildings

that waste less energy, and supporting

businesses to develop clean technologies.

In fact, Canada is quickly becoming a

major competitor in the renewable-energy

and cleantech industries. Earlier this year,

11 of Canada’s cleantech companies were

ranked within the top 100 in the world.

Companies like Carbon Cure are taking

emissions from factories and injecting

them into cement, making it stronger

and cheaper. And companies like Ballard

Power are creating fuel cells used in zero

emission vehicles around the world.

Canadians understand that transitioning

to clean growth is good for the environment

and the economy; that hundreds of billions

During a kayak trip to Nunavut, Catherine McKenna announced

the expansion of Canada’s largest national marine conservation

area (NMCA) in Lancaster Sound (Tallurutiup Imanga). She is

pictured with Moosa Akavak, an Inuit leader from Nunavut.

of dollars are already being invested

globally – to spark new technologies and

drive new possibilities; and that innovators,

engineers and entrepreneurs are catalysing

the market of tomorrow.

We also know that clean solutions

support healthier communities. That

is why we are phasing out coal-fired

electricity by 2030. We know that

clearing smog from our skies will

prevent cases of asthma, reduce hospital

bills and emergency room visits, and

save lives. It will also reduce greenhouse

gas emissions by 5 million tonnes a year,

the equivalent of taking 1.3 million cars

off the road.

When I think of the urgent need to

tackle climate change, I keep coming

back to my visit to Canada’s Arctic. Young

Inuit described to me their love for the

land and sea: the majestic ice flows,

roaming caribou, and teeming fish found

throughout. And they told me of the

urgency to protect their home from the

threats of climate change.

So as we gather in Bonn this year, the

task is clear: we must raise our ambition,

work harder, and take concrete steps to

meet our emissions targets. This is the

right thing to do for our environment. The

economic opportunities are enormous.

And it will ensure a cleaner, healthier, and

more prosperous planet for our children

and grandchildren.

45

POLICY


POLICY

WOMEN MUST

BE AT THE

HEART OF

CLIMATE ACTION

Isabella Lövin, Deputy Prime Minister

and Minister for International

Development Cooperation and

Climate, Sweden

While women are more

vulnerable to the effects of

climate change, they also

have fewer opportunities to

make decisions on how to

deal with it.

Gender often remains the untold

story behind climate change.

While climate change is a global

phenomenon, its impact is not spread

across a level playing field. Its eff ects are

felt locally, and poor people suff er the most.

Among the world’s 1.3 billion poor people,

the majority are women.

During the past few decades,

considerable achievements have been

made in narrowing the gender gap in

many countries. Nevertheless, across

Credit: Kristian Pohl/Regeringskansliet

46


the global spectrum, women tend to be

marginalised from economic and political

power, and have limited access to financial

and material resources. This increases

their vulnerability to climate change and

limits their potential to adapt. Women

are also often less represented in the

corridors of power; have fewer legal rights,

including access to land; and occupy

fewer leadership roles in the workplace.

This means that while women are more

vulnerable to the eff ects of climate change,

they also have fewer opportunities to

make decisions on how to deal with it. We

must change this. Women have the right,

and need, to be at the forefront of eff orts to

deal with both climate adaptation and the

transition to a zero carbon economy.

I am proud to represent the first

explicitly feminist government in the world,

one that also has the goal of making

Sweden the world’s first fossil-free welfare

nation. I strongly believe that the major

political and environmental challenges

of today, like climate change, can and

must be turned into opportunities for

cooperation and confidence-building that

can help advance gender equality, prevent

conflicts and deliver positive outcomes for

all communities across borders.

There are numerous examples of

renewable energy investments that also

contribute to increased employment

opportunities for women that foster

female entrepreneurship. One example

that illustrates this is the KawiSafi

project, an investment fund that invests

in clean energy companies in Rwanda

and Kenya. The KawiSafi project has

dedicated funds to train women to

become solar technicians, while also

supporting women-led micro-finance

groups to generate demand for solar

energy. The majority of the populations

in Rwanda and Kenya are not connected

to main power grids. Subsequently, many

use oil or kerosene for domestic power

generation. These fossil fuels are often

expensive as they are imported, while

noxious fumes pose a serious health

risk – especially to women and girls, who

Ghana Bamboo Bikes is a socio-ecological green initiative run by a group of

enterprising women and young people in Ghana.

Credit: Jbdodane/Flickr

generally spend more time performing

household work. The move to solar

energy can thus reduce emissions and

domestic budgets, while also improving

women’s and girls’ health. This is a clear

gender co-benefit of climate action.

Another example of how women can

play a major role as business leaders and

help drive the transition toward sustainable

economic growth and development is

Ghana Bamboo Bikes. Ghana Bamboo

Bikes is a socio-ecological green initiative

run by a group of enterprising women and

young people who build bicycles out of

an unlikely material: bamboo. Ten farmers

grow the bamboo, and 25 builders craft

it into environmentally friendly bikes that

can be used on Ghana’s bumpy roads or

exported overseas. Bernice Dapaah, the

founder and CEO of Ghana Bamboo Bikes,

plans to build two new factories soon,

adding 50 more workers in communities

with high unemployment.

A feminist approach to climate action

is not only an issue of rights, it is also

smart policy for employment opportunities

and sustainable economic growth.

Devising ways to consider gender in

climate action will not always be easy

or obvious. Societies are made up of

complex relationships, sometimes based

on diff ering structures of kin, power and

financial resources. But continuing eff orts

to place gender consideration at the

centre of climate finance are necessary.

The world clearly needs more women

climate leaders, whether around the

tables where policy is made, or at the

helm of businesses, steering them toward

sustainability.

47

POLICY


POLICY

DISASTER RISK

REDUCTION

AND CLIMATE

CHANGE

Scene from Les Cayes, Haiti, in the aftermath of Hurricane Matthew,

the category 4 storm which made landfall in the country on 4 October 2016

48


POLICY

Robert Glasser, UN Secretary-

General’s Special Representative for

Disaster Risk Reduction and Head

of the UN Office for Disaster Risk

Reduction (UNISDR)

This year there has been

an accumulation of evidence to

support the claim that 90 per cent

of disasters now are weather and

climate related.

Credit: Logan Abassi, UN Photo/Flickr

Anyone who followed the recent

visit of the UN Secretary-General,

António Guterres, to the Caribbean

islands of Barbuda and Dominica can

have no doubts about the existential threat

that extreme weather events pose for

small islands battling the eff ects of climate

change. Mr Guterres is much travelled

and has seen many disasters, but he

commented that he had never seen such

‘a high level of devastation’ as the one that

he witnessed in Barbuda after the passage

of Hurricane Irma, which rendered the

island uninhabitable. Days later, Hurricane

Maria ripped off roofs and stripped the

leaves from the trees in Dominica’s rain

forest which is central to the island’s

tourism industry and status as a UNESCO

World Heritage site.

Following those visits, the Secretary-

General made a stark pronouncement:

“The link between climate change and

the devastation we are witnessing is clear,

and there is a collective responsibility of

the international community to stop this

suicidal development.” This year there

has been an accumulation of evidence

to support the claim that 90 per cent of

disasters now are weather and climate

related.

Over the last 18 months, 20 countries

have declared drought emergencies,

notably across the Horn of Africa where

hunger is forcing people off the land in

49


POLICY

large numbers. In South Asia, monsoon

rains and floods have made life miserable

for 40 million people in Bangladesh,

India and Nepal. The United States has

suffered several major calamities this year

including hurricanes, floods, drought and

wildfires. The total cost of these events

has yet to be estimated, but 2017 could

well be the most expensive year on record

in terms of economic losses caused by

weather and climate extremes.

Global warming is implicated in many

of these events, triggering variability

of weather and climate, resulting in

unprecedented changes in rainfall

patterns, extreme heatwaves, more

destructive hurricanes and more powerful

storm surges associated with rising and

warming seas.

As nations meet at the Climate Change

Conference in Bonn, COP23, it is clear

that the level of ambition in reducing

greenhouse gases needs to be raised

if we are to succeed in keeping the

global temperature rise well below 2˚C,

or the more desirable target of 1.5˚C as

outlined in the Paris Agreement. At the

same time, we have to recognise that we

will continue to live with the abnormal

and often unforeseen consequences of

existing levels of greenhouse gases in the

atmosphere for a long time to come.

This is why it is critically important that

we invest seriously in measures to help

us to reduce disaster mortality, reduce the

Building a retaining wall in

Afghanistan to limit flooding

Children take part in a mangrove

restoration project in Camotes Islands,

Philippines

numbers of people losing their homes and

jobs in disasters, reduce overall economic

losses, and reduce damage to critical

infrastructure on the scale we have seen,

for example, in Puerto Rico following

hurricane Maria.

These are key goals among the seven

targets laid out in the Sendai Framework

for Disaster Risk Reduction that was

adopted two years ago by UN member

states. In 2018 we are poised to launch

the Sendai Monitor, which will aid

governments to measure their losses

and improve their understanding of their

exposure to disaster risk and therefore

Credit: UNOPS/Flickr

Credit: Plan International/Flickr

where they need to concentrate their

investments to avoid unnecessary losses.

The UN Office for Disaster Risk

Reduction (www.unisdr.org) identifies

the key drivers of disaster risk as

poverty, unplanned urbanisation, the

loss of protective eco-systems and

weak governance. Climate change and

population expansion into hazard-prone

areas all ratchet up a country’s risk

exposure and vulnerability to disaster

losses.

Plans to reduce disaster risk need to

include measures that reduce climate

risk. A multi-hazard approach to disaster

risk management requires integration of

disaster risk reduction and climate change

adaptation, thus avoiding duplication of

effort, maximising scarce resources and

making life easier for countries reporting

on progress in achieving the Sustainable

Development Goals, the aims of the Paris

Agreement on Climate Change, and the

Sendai Framework.

The Sendai Framework has set

a deadline of 2020 “to substantially

increase the number of countries with

national and local disaster risk reduction

strategies”. Between the launch of the

Sendai Monitor next year and the drafting

of these strategies, there is a window of

opportunity to strengthen risk governance

and ensure that we are equipped and

prepared for the century ahead that will

see global population rise along with

exposure to extreme weather events.

The worst disasters that could happen

have not happened yet and we need to be

resilient and prepared.

50


FUELLING GLOBAL

CROSS-SECTOR COLLABORATION

The Aid & International Development Forum (AIDF) strives to be a catalyst of cross-sector collaboration and innovation in

humanitarian and development sectors by bringing together governments, UN agencies, intergovernmental agencies,

national and international NGOs, development banks, investors and the private sector.

AID & DEVELOPMENT AFRICA SUMMIT

February 2018 | Kenya

africa.aidforum.org

CLIMATE SMART AGRICULTURE CONGRESS

March 2018 | Kenya

csa-africa.aidforum.org

AID & DEVELOPMENT ASIA SUMMIT

June 2018 | Thailand

asia.aidforum.org

GLOBAL DISASTER RELIEF & DEVELOPMENT SUMMIT

September 2018 | USA

disaster-relief.aidforum.org

If you have a compelling story or research that will inspire and inform other humanitarian and development leaders,

please email info@aidforum.org or call +44 (0)20 7871 0188.

@FollowAIDF

www.aidforum.org


Brought to you by:

FINANCE

Official Event Partner

Financing Innovation for a Low Carbon Future

On 19th September 2017, Climate Action held the second Sustainable Investment

Forum in New York.

The event, in partnership with UNEP Finance Initiative, brought together 300

attendees from over 30 countries to discuss how to finance a low-carbon future.

The audience at the Crowne Plaza Times Square heard from over 40 major

speakers on topics ranging from green bonds, building clean energy markets, and

the value of sustainable assets.

High-level participants from leading organisations, including Goldman Sachs,

Green Climate Fund, the States of New York and California, NextGen America, and

the International Finance Corporation (IFC) all took part in the event.

“An excellent forum for discussing financeable

business opportunities…it does a great job of

bringing together technologists, investors, and

policymakers to have an open dialogue about

practical approaches to carbon and climate.”

Eric Bielke, Director, Energy Investments, GE Ventures

“For us at UBS, it is really key to be part of this

conference – using this platform to communicate

with our clients and peers”

Michael Baldinger, Head of Sustainable and Impact Investing, UBS Asset Management

Climate Action is bringing the Sustainable Investment

Forum to Europe on 13 March 2018 in Paris.

This new event will bring together decision-makers from the investment

community, European governments and think tanks to discuss current challenges

in the global climate finance market.

Pre-register: europe.sustainableinvestmentforum.org

@Climate_Action_ | Join the conversation: #SInvEU

52


53

FINANCE


FINANCE

FINANCING

CLIMATE IMPACTS

IN SMALL ISLAND

STATES

Thoriq Ibrahim, Minister of

Environment and Energy of the

Republic of Maldives

No country or region is immune

from climate change, but we are

not equally vulnerable. For small

islands, climate change poses particular

risks, especially from storms and sea level

rise. For this reason, it is often said that we

are on the front line of the crisis. We are

also emblematic of the new policies the

international community needs to pick up

the pieces after disaster strikes.

Hurricanes Irma and Maria, both

uniquely powerful storms that laid waste

across Barbuda, Cuba, the Bahamas

and Puerto Rico, and caused significant

damage in other parts of the Caribbean,

graphically illustrated the cost of our

inaction on climate change. In 2016,

Cyclone Winston, the strongest tropical

storm to ever make landfall in the

Southern Hemisphere, wreaked havoc on

Fiji. Three record storms and unimaginable

devastation in two years. The new reality

of life in the ‘anthropocene’.

Islands are not the only ones at risk, of

course. Hurricane Harvey dumped some

It is no surprise that the elevated

risks we face often make the cost of

insurance premiums prohibitive,

if coverage is available at all.

32 trillion gallons of water in Texas and

Louisiana. Irma also severely damaged

the lower Florida Keys. Nor are storms the

only climate impact the world is suffering

from these days. Floods in South Asia have

claimed thousands of lives in the past few

months alone. Earlier this year, parts of

Africa endured deadly droughts.

To be sure, the cyclones and hurricanes

have refocused attention on the need

to operationalise a loss and damage

mechanism as soon as possible.

The plan of the Alliance of Small Island

States (AOSIS), first articulated in the

1990s, now has an opportunity to be

turned into action under the Warsaw

54


FINANCE

International Mechanism on Loss and

Damage. The AOSIS plan envisions a

three-part organisational structure housed

under the UNFCCC with oversight from

technical and finance panels. Linkages

could also be drawn to existing adaptation

funds as well as a number of UN bodies,

non-governmental organisations and the

private sector.

The first component recognises that

managing climate impacts demands

acquiring baseline historical information

about weather hazards and quantified

assessments of a variety of new risks.

The data should be used to guide the

development and implementation of

country-specific measures that reduce

exposure to climate impacts in the first place.

A second part resembles insurance

systems commonly found in the developed

world and would cover countries for costs

associated with sudden climate impacts,

such as tropical storms, hurricanes,

floods, and droughts. This is particularly

relevant for small islands, because our

populations tend to be concentrated in

highly vulnerable coastal zones. And it is

no surprise that the elevated risks we face

often make the cost of insurance premiums

prohibitive, if coverage is available at all.

Finally, the plan calls for the creation

of an international solidarity fund, or

‘mechanism’, that would compensate

countries for economic and noneconomic

losses stemming from slowonset

climate impacts, such as sea-level

rise, ocean acidification, coral bleaching,

saltwater intrusion and desertification.

This could include lost revenue to the

tourism and fishing industries, cultural

impacts, and, in the worst case, the cost

of relocation should islands become

uninhabitable.

We have seen what it is like to be on

the front line of climate change, and what

it takes to make lives whole again. COP23

is our next opportunity to take action: we

had better seize it.

55


FINANCE

$70 TRILLION

GLOBAL

INVESTMENT

POOL GOES

GREENER

Andrew Steer, President of the

World Resources Institute (WRI)

56

Something very important is

happening in global finance:

the US$70 trillion in institutional

investment pools is turning a little greener.

A Working Paper from WRI (www.wri.org),

Navigating the Sustainable Investment

Landscape, has found that the prospects

for sustainable investing are strong, and by

overcoming the remaining obstacles the

market can indeed reach a tipping point.

Many portfolio managers used

to believe – and some still do – that

allocating funds towards more sustainable

companies and investments would

require sacrificing yield. But empirical

evidence shows that, on average, this is

not the case. In some instances, taking

sustainability into account can actually

enhance corporate financial performance,

while investment funds oriented to

sustainability are likely to perform as well

or better than traditional funds.

Sustainable Reality, a recent study of

more than 10,000 mutual funds by the

Morgan Stanley Institute for Sustainable

Investing, found that sustainable equity

funds usually had equal or higher median

returns and equal or lower volatility than

traditional funds. An analysis by Oxford

University and Arabesque Partners, From

the Stockholder to the Stakeholder, found a

positive relationship between sustainability

and financial performance of stock prices

for 80 per cent of the 41 studies reviewed.

Asset owners – the pension funds,

endowments, foundations and people who

own the capital invested in corporations

– are in it for the long haul, which

gives them a diff erent perspective from

investment managers aimed at short-term

profit. Long-term investors are eager to

ensure their capital can weather a range

of environmental, social and governance

(ESG) risks, especially climate change.


FINANCE

In some instances, taking

sustainability into account can

actually enhance corporate financial

performance.

Hurricane Maria near Puerto Rico.

Photo by Stuart Rankin/flickr

Back-to-back billion-dollar natural

disasters from South Asia to south Texas,

from hurricanes in the Caribbean to

wildfires in the Rocky Mountains, show a

clear pattern of high cost.

Chief investment officers and individual

investors are taking note. Mainstream

financial players including former New

York Mayor Michael Bloomberg are calling

for corporations to take more action. A

global task force set up by the G20 top

industrialised nations – the Task Force on

Climate-Related Disasters (TFCD) – has

developed a voluntary framework for

companies to disclose the financial impact of

climate-related risks and opportunities. The

TFCD has drawn support from more than

100 companies with US$11 trillion in assets.

And yet the battle is far from won:

most fund managers still chase the

short money. But the trend is in the right

direction, especially when asset owners

apply pressure, as they have in 2017. A

case in point: 62 per cent of ExxonMobil’s

shareholders voted to instruct the oil

giant to report on the business impact of

global measures to limit warming to 2˚C

above pre-industrial levels. This followed

similarly successful shareholder votes

at Occidental and PPL, a large utility

holding company.

Investment heavyweights Blackrock,

Vanguard and State Street – which

collectively own about 18 per cent of

ExxonMobil – all reportedly voted for the

resolution, which was a vote for longterm

protection for investors’ capital. The

vote was also in line with Blackrock CEO

Larry Fink’s 2016 demand that company

CEOs manage for the long term, even

though Blackrock and other firms had

been reluctant to vote against company

management, especially on issues related

to climate change.

These investment houses are not alone,

and WRI is part of this transition. More than

300 companies around the world have

committed to setting targets to reduce

climate-warming emissions in their value

chains consistent with the best climate

science as part of the Science Based

Targets initiative. The Institute’s Sustainable

Investing Initiative offers tailored data,

research and peer-to-peer learning to

accelerate the shift toward investment that

integrates ESG factors from the start.

Ultimately, we should settle for nothing

less than 100 per cent of investors

taking ESG into account when making

investment decisions. We are not there

yet, but by sharing knowledge about the

consequences of failing to act now to deal

with projected climate impacts, there is

a better chance of persuading portfolio

managers to think for the long term – just

as many investors already do.

57


FINANCE

SUSTAINABLE

FINANCE:

THE GREAT

ACCELERATION

One long-standing blind spot has been

the inability of financial decision-makers to

see the materiality of environmental, social

and governance factors, and price capital

accordingly.

58


Nick Robins, Co-Director, UN

Environment Inquiry into the Design

of a Sustainable Financial System

A

decade has passed since the onset

of the financial crisis. Much has

been done to fix the problems of

the past; yet, according to UN Secretary-

General Antonio Guterres, when set against

the imperatives underlying the Sustainable

Development Goals, “today’s global financial

system, which manages some US$300

trillion in financial assets on our collective

behalf, is simply not fit for purpose.”

One long-standing blind spot has been

the inability of financial decision-makers

to see the materiality of environmental,

social and governance factors, and price

capital accordingly. Endemic short-termism

exacerbates the problem, producing what

the Bank of England Governor Mark Carney

described in 2015 as ‘the tragedy of horizons’.

Now things are changing – and with

unexpected speed. Old puzzles over whether

integrating ESG into investments can result

in a profit are now being answered – in

the affirmative. According to the Financial

Times, there is “mounting evidence that

funds which observe ESG standards tend to

outperform those that don’t by a significant

margin.” Capital is also being reallocated

at scale to the low-carbon growth sectors

of the future. In the first half of 2017, green

bond issuance expanded by almost 50 per

cent to reach US$56bn, and is on course for

US$130bn for the full year, up from US$81bn

in 2016. So far in 2017, France, the USA and

China have been the leading green bond

issuing countries. COP23 President Fiji

has just issued a sovereign green bond, a

developing world first.

More significant still is how environmental

factors are becoming part of the wider

architecture that governs the financial

system. The Financial Stability Board –

which was set up in the wake of the financial

crisis – has now begun to confront the

threat of climate change. Its Task Force on

Climate-Related Financial Disclosures has

presented an industry-led set of reporting

recommendations that will drive the climate

transition into both corporate planning

and investment decisions. Importantly, this

voluntary package is already being endorsed

by leading insurance regulators, such as

California, Brazil, France, the Netherlands,

Singapore, South Africa and the UK, who

realise that they also need better climate

data to ensure that the companies they

supervise are ‘safe and sound’.

Perhaps the most striking example

of this fusion of environmental threats

with financial regulation comes from

the European Union. In September 2017,

the European Commission decided that

the European supervisory authorities for

banking, securities markets and insurance

should aim to ‘promote sustainable

finance while ensuring financial stability’

– something that would have been

unthinkable just a year before.

A number of factors explain this shift – not

least the recognition that climate change

wrecks our ability to deliver long-term

returns for savers and investors. But this

is not all about avoiding risk. Some of the

world’s leading financial centres – including

Casablanca, Hong Kong, London, Paris and

Shanghai – are now starting to take action

to seize the strategic opportunity presented

by sustainable finance. Increasingly clean

energy and electric vehicles are no longer

‘mitigation’ measures to cut carbon pollution,

but ways of rebooting the economy. To

realise the potential, we need a financial

system that makes the transition cheaper,

faster and smoother.

A key challenge is to translate climate

goals – as expressed in the Nationally

Determined Contributions (NDCs) – into

clear rules, standards and incentives for

banking, capital markets and insurance. A

growing number of countries are putting in

place sustainable finance roadmaps to do

this, from China to Italy and on to Morocco.

The European Union has also set up a highlevel

expert group on sustainable finance

to produce its own roadmap. Across the

world, a pressing issue is how to deploy

digital finance to deliver environmental and

social benefits, for example, through mobile

banking, peer to peer investments and big

data analytics. Importantly, these roadmaps

do not happen in isolation – and the value

of international initiatives – such as G20’s

green finance study group – is to share

experience and drive emulation of good

practice. According to the Green Finance

Progress Report (2017), prepared for the G20

by the UNEP Inquiry (http://unepinquiry.org),

the past year has seen the introduction of

the greatest number of financial policies and

measures to promote green and sustainable

finance.

Making the bridge between sustainable

finance and core economic goals is one sign

of a new maturity. Designing sustainable

finance so that it helps cut poverty and

inequality is another, particularly in the

developing world. We know from the past

that mismanaged transitions can result in

social dislocation. As we make the shift to a

resilient zero carbon economy, the financial

system needs to focus not just on avoiding

‘stranded assets’ but also ‘stranded workers’

and ‘stranded communities’. One way of

doing this could be to develop ‘sustainable

finance zones’ to connect the expertise and

resources of the world’s financial centres

with key areas of socio-economic need.

In the current situation where demand for

green assets is outstripping supply, these

‘sustainable finance zones’ could help to

build pipelines of bankable projects that

hit climate goals and social objectives

simultaneously.

In the process, we will have gone some

way to respond to Guterres’ challenge,

and will have helped to create a financial

system that is truly fit for sustainable

development.

In the first half of 2017, green bond

issuance expanded by almost 50 per

cent to reach US$56bn.

59

FINANCE


FINANCE

THE IMPORTANCE

OF CLIMATE-

RELATED

FINANCIAL

DISCLOSURES

Graeme Pitkethly, Unilever’s Chief

Financial Officer and a Vice Chair of

the Task Force on Climate-related

Financial Disclosures (TCFD)

Even today, as you read this, climate

change is impacting businesses

around the world. It disrupts supply,

reduces crop yields, increases costs and

prompts regulation. Recently, Climate

Wise calculated that the ‘protection gap’

– that is, the uninsurable risk from climate

change – has grown to US$100bn. And

for businesses, today’s challenges pale in

comparison to what could come tomorrow.

Despite this, very few companies

currently report climate change as a risk.

According to KPMG, 72 per cent of large

and mid-cap firms worldwide do not

acknowledge the financial risks of climate

change in their annual financial reports.

I believe this will change. Why? Because

the current situation can undermine

both the stability of the global financial

system and the ability of companies and

investors to fully understand the risks and

opportunities they face.

60

If markets are to operate efficiently

they must be transparent, to help

investors evaluate companies and

make better decisions for the long

term. Without transparency, investors

in financial markets will lack clear

information about which companies

or assets are most exposed to climate

change, and which are best prepared.

Access to comparable reporting data

promotes better pricing of climaterelated

risks and opportunities. It also

leads to more informed investment,

credit and insurance underwriting

decisions.

Crucially, reporting climate change in

financial filings encourages management

teams and boards to properly assess the

scenarios their companies face. After all,

annual reports should always outline key

risks to a business – and climate change

is surely one of them. Those who invest

time in this exercise will be rewarded

by being better able to make decisions

for the future of their businesses, and

navigate the transition to a low-carbon

economy. The opportunities alone are

substantial. US$25 trillion of assets

under management are participating in

Investor Platforms on Climate Change.

Add to that another US$23 trillion of

investment opportunities in emerging

markets as a result of COP21, according

to the IFC.

It is clearly in a company’s interests

to disclose climate-related data. It

is only a matter of time before most

investors – as well as consumers,

employees and governments – actively

ask for this information. In many cases,

this is already happening. We know,

for example, that transparency is

increasingly important to consumers,

particularly millennials. They want to

understand and trust the companies

behind the brands they buy, and they

want to know more about their purpose

and values.


So the business case is evident. And

thanks to the work of the Task Force on

Climate-related Financial Disclosures

(TCFD), convened by Bank of England

Governor Mark Carney and chaired

by Michael Bloomberg, we now have

a clear framework to help companies

consider and disclose climate changerelated

financial factors. As part of

the TCFD, we focused on developing

recommendations for voluntary,

consistent, financial reporting on climate

change. Importantly, we designed them

to be as practical as possible to adopt

in mainstream financial filings, across

sectors and geographies. Unilever was

one of the first companies to commit to

Access to comparable reporting

data promotes better pricing of climaterelated

risks and opportunities.

implementing the recommendations. We

are working towards their adoption and

urge others to do the same.

Of course, there are many other

things that businesses can do to tackle

climate change. For example, Unilever

has reduced CO 2

from energy in

manufacturing by almost two-thirds over

the past two decades and we have set a

bold target of being carbon positive by

2030, committed to sourcing 100 per cent

of our energy from renewable sources.

Not only is this the right thing to do, but

it benefits our shareholders, with lower

operational costs and greater resilience

in our energy supply. By proactively

cutting our greenhouse gas footprint, we

also reduce our exposure to increasing

environmental regulation and taxes.

To tackle climate change we need

continued leadership from governments,

cities, regions and, of course, businesses

to create a virtuous cycle of action and

ambition. Most of all, climate change is

no longer an environmental issue. It is

a profound issue of economic transition

and financial stability, as likely to be

on a G7 or G20 agenda as any other

geopolitical or macroeconomic concern.

As world leaders come together in

Canada and Argentina in 2018 to

address concerns around the global

economy, I hope that their endorsement

of the Task Force’s recommendations sits

high on their agenda.

FINANCE

61


FINANCE

CLIMATE

TRANSPARENCY

IN FINANCIAL

MARKETS

Remco Fischer,

UNEP Finance Initiative (UNEP FI)

62

One of the great challenges of the

next few decades will be to make

economic growth and social

development – and thus human welfare –

compatible with the stability and health of

the world we live in – or even conducive to

it. Achieving that requires nothing short of

greening capitalism: putting the marketdriven

energy, innovation and motivation,

which over the last centuries have forged

modern economies and raised hundreds

of millions out of poverty, at the service

of protecting the global commons. In that

ambitious context, the Financial Stability

Board’s (FSB) Task Force on Climate-

Related Financial Disclosures (TCFD)

and the recent publication of its Final

Recommendations Report now mark a

real and significant milestone of progress

(www.fsb.org).

The disclosure framework that the TCFD

provides, and the political impetus with

which it is provided, have the potential

to give an unprecedented boost to the

systematic integration of climate factors

into economic and financial decisionmaking.

They will boost the seriousness

with which investors and other

stakeholders consider the future viability

of business in their decision-making. They

will, of course, need to take into account

that tomorrow’s technology policy will be

radically diff erent from today’s as a result

of climate change.

Specifically, there are three core features

in the TCFD Framework that make it stand

out, and mark a new stage in the journey to

full disclosure of climate and environmental,

social and governance issues.

Firstly, it is true – as stated by

Mark Carney, Governor of the Bank

of England and FSB Chair – that the

recommendations were developed by

the market, and for the market. It is also

true that the TCFD’s work has been

undertaken explicitly under the auspices

of the financial regulatory community. This

is the first time that international financial


that they need it. As a result, the overall

disclosure practice by companies and the

ensuing availability of corporate data will

be improved.

Thirdly, meaningful assessments of the

financial risks and opportunities of climate

change can only be achieved in a forwardlooking

way, given how climate change

and its impacts are not static – quite the

contrary. Currently, for instance, we are

experiencing a world that is roughly 1˚C

warmer than in pre-industrial times. This

is characterised by still growing global

emissions, and a still fairly tepid global

landscape of public decarbonisation

targets and policies. By extension, the

financial risks and opportunities from

critical, and so promising in advancing

the robustness, ‘scrutinisability’ and

credibility of climate-related corporate

and investor disclosures.

In the same way as the TCFD framework

and the above features are necessary and

promising, so will be their implementation

by practitioners in the real world be

ridden with complexity. This particularly

applies to financial institutions. The

development of scenarios able to capture

relevant parameters, across technological,

policy and physical domains, and the

modelling of likely business outcomes

under various scenarios, will be complex

for companies in the real economy.

For financial institutions, however, the

FINANCE

This is the first time that

international financial regulators

are taking a stance, mandating and

endorsing work on the financial

repercussions of an environmental

issue.

regulators are taking a stance, mandating

and endorsing work on the financial

repercussions of an environmental issue.

There is no need to explain what this

new political impetus means for the

seriousness and determination with which

financial market actors are now likely

to approach the challenge of managing

climate-related risks.

Secondly, banks, insurers and investors

are themselves now considered to be

not only recipients of disclosures from

others, but also preparers of disclosures

themselves, to their own stakeholders.

Clearly, if investors are now expected

to provide transparency on the climaterelated

risks and opportunities that they

face, and be scrutinised accordingly,

they will take the climate disclosure

challenge far more seriously than before.

This implies that in the future they will be

more determined in obtaining climaterelated

data from companies in their

portfolios – in the formats and the quality

climate change do currently exist but are

limited. And so, if asked for corresponding

assessments, most actors would

accurately convey just that. The point,

however, is that current circumstances

are unstable and highly likely to change

radically in the coming years and decades.

If world leaders fail to increase their

decarbonisation ambition and eff orts,

the additional warming by 2, 3 or more

degrees would intensify the physical risks

to unprecedented, economically disruptive

levels, while keeping transition risks at

bay; if, on the other side of the spectrum,

leaders did take determined action to

mitigate climate change, the transition

risks would be significant while the more

dangerous physical risks would remain

manageable. So, no matter what, the

climate-impacted future will be diff erent

than the present.

That is why the strong emphasis in

the TCFD framework on forward-looking,

scenario-based assessments is so

exercise becomes daunting, since their

climate exposures are manifested in large

portfolios comprising at times innumerable

positions across virtually all sectors of the

economy.

It is the combination of a challenging

task ahead and a new determination

among leading financial actors to

tackle it that has allowed us as UNEP

FI to convene 17 leading banks from 10

countries in diff erent parts of the world

to collaboratively work towards a first set

of TCFD-compliant disclosures. Through

this working group of industry pioneers

we hope to cut through the complexities

at hand and to ultimately off er climate

disclosure guidance to the banking

industry at large. If a critical mass of banks

then follows and becomes systematic in its

appraisal, disclosure of, and response to,

climate-related risks and opportunities, we

might have moved the dial a little bit in the

ability of financial markets to become a

leading force in greening capitalism.

63


FINANCE

CARBON PRICING

IN THE PARIS

AGREEMENT ERA

Richard Zechter, Adviser - Climate

Finance, Climate Change Group at

the World Bank

As we respond to the huge policy

challenge of climate change, it is

clear that carbon pricing plays a

crucial role. In particular, it requires the

cost of greenhouse gas emissions to be

considered in financial decisions. This

levels the playing field between emissionintensive

and low-carbon economic

activities, triggering more investments in

low-carbon technologies.

In the 2017 State and Trends of Carbon

Pricing edition (forthcoming from World

Bank Open Knowledge Repository), we find

that carbon pricing initiatives are continuing

to spread. Significant progress has been

made over the past two years, including the

64

entry into force of the Paris Agreement and

the eight new carbon pricing initiatives that

have been implemented in national and

subnational jurisdictions. When the Chinese

national emissions trading system (ETS) is

launched – planned for the end of 2017 – it

will be the largest carbon pricing initiative

in the world. Developments in the Americas

have been particularly prominent, with six

new carbon pricing initiatives implemented

in this region since the beginning of 2016.

But more progress is needed to reach the

goal of the Paris Agreement: the coverage

of GHG emissions must expand, deeper

impacts on emission reductions need

to be triggered by raising carbon prices,

and the speed of these actions should

accelerate. The current level of carbon

prices is significantly lower than the level

that the High-Level Commission on Carbon

Prices found to be consistent with the

temperature goal of the Paris Agreement.

While 15 per cent of global GHG emissions

are currently covered by an ETS or carbon

tax, a much higher coverage combined

with international cooperation on climate

markets is essential to mobilise the large

volume of resources for a decarbonised

economy and to bring down the costs of

low-carbon technology.

The potential role for international market

mechanisms in reducing the cost of climate

change mitigation is crucial. Modelling

analysis undertaken in the 2016 State and

Trends of Carbon Pricing report has shown

that an international carbon market could

reduce the cost of delivering the emission

reductions identified in the current Nationally

Determined Contributions (NDCs) by

about a third by 2030. Negotiations are

now under way to develop the guidelines

Credit: Jutta Benzenberg, World Bank


to implement the Paris Agreement, with

country-level pledges to reduce GHG

emissions formalised through NDCs. Carbon

pricing plays a prominent role in many

of these NDCs, with 81 parties currently

planning or considering its use. Among

other functions, the Paris guidelines will

govern the operationalisation of cooperative

approaches to emissions mitigation under

Article 6, thereby shaping the way forward

for international market mechanisms and the

linking of domestic carbon pricing initiatives

under the new international climate accord.

In our report we also explore how the two

main modalities of international cooperation

– climate finance and climate markets – can

be used in an integrated approach to enable,

support and complement domestic policies

to stimulate the flow of resources. We focus

on the role that results-based climate finance

The potential role for

international market mechanisms in

reducing the cost of climate change

mitigation is crucial.

can play in piloting cooperative approaches

under Article 6 to help provide lessons for

the implementation of international market

mechanisms.

Without urgent action, climate

impacts could push an additional 100

million people into poverty by 2030. The

fundamental challenge is how to build a

sustainable global economy, where climate

change and other environmental threats

are met, while pursuing shared prosperity.

To succeed in tackling climate change we

must succeed at mobilising the required

investments, involving trillions of dollars

annually. An integrated policy response

will be needed that combines the full

range of climate change mitigation polices,

including domestic carbon prices, other

domestic policies, climate finance and

international market approaches.

FINANCE

We need to shift planned investments to

low carbon alternatives

and mobilise incremental

low-carbon investments

of $700 billion*

annually by

2030 to transition to a

low-carbon economy.

The $700 billion estimate is based on studies by

the IEA & IRENA, McCallum et al, and the World

Economic Forum, et al.

65


INNOVATION

8th Annual

Environment Ministers,

CEOs, and Mayors are

attending the 8th

Sustainable Innovation Forum

Climate Action, in partnership with UN Environment, is hosting the largest

business-focused event taking place during COP23.

The 8th Sustainable Innovation Forum is bringing together over 600 delegates

and 75+ world-class speakers for two days of sharing ideas, networking,

collaboration and deal making that will fast track the green economy.

The Forum provides a world class line-up of keynote speakers, panel

discussions, networking sessions, on-stage interviews, innovation spotlights,

Mayors’ breakfast briefings, and much more.

Hear from global sustainability leaders on the latest developments in clean

energy, decarbonising transport, sustainable cities, the circular economy,

climate finance and more.

Speaker highlights include:

• Jerry Brown, Governor of California and Special Envoy for States and

Regions

• Erik Solheim, Executive Director, UN Environment

• Environment and Energy Ministers from around the world, including:

Denmark, Poland, Ecuador, Norway, UAE, the Maldives, Luxembourg,

Estonia, Ethiopia, and more.

There will also be an exclusive Mayor’s ‘BreatheLife Cities Roundtable’, in

collaboration with ICLEI and UN Environment. This breakfast event aims

to mobilise cities and individuals to protect our health and planet from the

effects of air pollution.

Delegates are representing national and regional governments, the private

sector, the UN, NGOs, academia, responsible investors, development banks,

sustainability entrepreneurs and more.

The Forum is taking place at the heart of COP23 and the negotiations –

conveniently located steps away from the ‘Bula Zone’, at the

Climate Action Domes.

66


67

INNOVATION


INNOVATION

MISSION

INNOVATION:

ACCELERATING

THE TRANSITION TO

A CLEAN ENERGY

ECONOMY

Patrick Child, Deputy Director-

General – DG Research & Innovation,

European Commission, and Mission

Innovation Steering Committee Chair

Remarkable strides have been

made over recent years in driving

down the costs of clean energy

technologies. From onshore wind power

to solar energy, from electric car batteries

to LED lighting, costs have plunged

dramatically across the board. These

successes are testament to the power of

innovation. By coupling sustained public

investment in research and development

with business leadership, fledgling ideas

are brought into the mainstream. Despite

these successes, many promising clean

energy solutions are not yet market-ready

and capable of competing with fossilfuel-based

energy. In brief, the pace of

innovation falls significantly short from what

is required, considering the scale of energy

system transformation needed.

Mission Innovation aims to reinvigorate

global efforts in this regard. Launched at

COP21 in Paris in November 2015, it is a

global initiative of 22 countries and the

European Commission (acting on behalf

of its member states). Member countries

collectively account for more than 80 per

cent of the world’s total public financing of

clean energy research and development.

By joining Mission Innovation, member

countries recognise a critical reality:

68


we need to accelerate the development

of clean energy solutions to match the

urgency of tackling climate change. Quite

simply, for fossil fuels to remain in the

ground, we need to accelerate to the point

where clean energy is cheaper than coal,

gas or oil.

Each Mission Innovation member

determines the means for advancing

the common goals and pursues them

independently. But since the inaugural

ministerial meeting in June 2016 (MI-1),

countries have clearly established dynamic

cooperation in a spirit of joint ambition.

Beyond the quantitative goal to double

clean energy R&I investments, we have

launched a number of initiatives to boost

the impact of these investments. This

includes the setting-up of collaborative

networks and partnerships around clean

energy innovation.

One of the most exciting projects

launched over the last year is the so-called

Innovation Challenges. These are global

calls to action aimed at accelerating

research, development and demonstration

Mission Innovation members share

common goals and seek to double

public clean energy research and

development investment over

five years, to develop and scaleup

breakthrough clean energy

technologies and to achieve substantial

cost reductions in the process.

(RD&D) in technology areas where

Mission Innovation members believe

increased international attention would

make a significant impact in our shared

fight against climate change. The seven

Innovation Challenges are ambitious. They

will stretch the boundaries of clean energy

scientific know-how and include goals

such as creating intelligent electricity grids

and generating storable solar fuel from

sunlight. They cover the entire spectrum

of RD&D, from early stage research needs

INNOVATION

69


INNOVATION

Bill Gates of the Breakthrough Energy Coalition and Carlos Moedas,

European Commissioner for Research Science & Innovation

Credit: IISD/Francis Dejon (enb.iisd.org/energy/mi/2016/1jun.html)

assessments to technology demonstration

projects. They aim to encourage increased

engagement from the global research

community and provide opportunities for

new collaborations between participating

countries and investment prospects for the

private sector.

Although much progress has been

made, the global clean energy economy

is still in the early stages of a multibillion

dollar shift. Mission Innovation

and the clean energy transition provide

a compelling opportunity for investors,

as can be seen by initiatives such as Bill

Gates’ Breakthrough Energy Coalition.

We know from past experience (in areas

such as space, technology and medical

research) that public investment in

research leads to creation of businesses

driven by private capital. Through

Mission Innovation, we have political

momentum. With the skills, resources,

experience and vision of leading

investors and industry, together we can

take clean energy innovation from the

laboratory to the market place.

At its second Ministerial meeting

(MI-2) in Beijing in June 2017, Mission

Innovation joined forces with the World

Economic Forum. This new collaboration

facilitates engagement between Mission

Innovation activities and World Economic

The seven Innovation Challenges

will stretch the boundaries of clean

energy scientific know-how.

Forum members and partners. At the

outset, attention is focused on selected

Innovation Challenges – areas that are

most promising for greater public–private

cooperation to help develop and unleash

new technologies into the market.

The European Commission (EC)

currently chairs the Mission Innovation

Steering Committee, a position it will

hold up to the 3rd Ministerial meeting

(MI-3), which is to be co-hosted by

the EC, Denmark, Finland, Norway and

Sweden in 2018. Taking place in Malmö

and Copenhagen on 23-24 May, the

meeting aims to build on the political

momentum generated at MI-2 in China.

Private sector engagement in clean

energy innovation will be a key theme

of MI-3. By bringing Ministers from all

Mission Innovation countries to the table

alongside leading clean energy investors

and captains of industry, we will be able

to leverage the high-level political will

and private sector leadership needed to

drive ambitious, real-world clean energy

policies and actions.

70


CATALYSING CLIMATE

INNOVATION IN

DEVELOPING

COUNTRIES

INNOVATION

Anabel Gonzalez, Senior Director,

Trade and Competitiveness Global

Practice, World Bank Group

The world is undergoing a clean

technology revolution, and small

and medium enterprises (SMEs) in

developing countries will play a crucial

role, transforming technology advances

in climate sectors into commercial

applications for local markets. The

World Bank Group (www.worldbank.

org) and others are supporting SMEs

in this important work with financing,

proper regulatory environments, technical

assistance, and international cooperation.

As climate SMEs scale and deploy new

innovations, developing countries will not

only increase their climate resilience and

economic eff iciency, but also enhance

national competitiveness with job

creation and investment in many of the

most dynamic sectors of the 21st century.

Investment needs in green sectors for

developing countries will be immense,

with huge opportunities for local firms.

The International Finance Corporation,

a member of the World Bank Group, has

estimated that US$23 trillion in climatesmart

investment opportunities exist in

selected emerging markets, and a World

Bank report, Building Competitive Green

Industries, showed that up to 25 per cent

of climate investments in developing

countries are available for local

SMEs. Advances in renewable energy,

efficiency, climate-smart agriculture

and clean water create opportunities

for companies to address development

challenges with cleaner, more climatefriendly

technologies and practices.

Local SMEs play an essential role

in scaling climate innovations for

developing countries, and more needs

to be done to support them. SMEs are

a crucial ingredient for commercial

innovation, but they face barriers in

developing countries that are particularly

acute in climate sectors. For example,

many climate technologies have

Jonathan Coony,

Global Lead, Green Competitiveness,

World Bank Group

Table 1. What makes green sectors different?

Need of last mile delivery

Green enterprises deliver physical

products to market

Capital intensive

Green enterprises have high upfront

capital needs

High dependency on policy support

Green enterprises are highly dependent

on regulatory regimes and the public

sector more generally

Green enterprises take longer to

reach profitability

Green enterprises, on average, have

longer “gestation” periods before they

reach profitability and the steep part of

the enterprise growth curve

Source: Innovations for Scaling Green Sectors report, infoDev, 2017

71


Credit: Safi Organics

INNOVATION

Workers at Safi Organics in Kenya use biochar made from

agricultural waste to make a soil conditioner

capital-intensive hardware that requires

extensive physical testing before launch.

In addition, to account for their positive

externalities, climate technologies can

be heavily dependent on policy support

whose variability can impede steady

company growth. Table 1 summarises

these barriers.

When SMEs do not play an active role

in commercialising new climate-related

products and services for their countries,

successful climate innovation lags. No

one understands local market conditions

better than local companies, and without

the application of this knowledge poor

technology choices will be made and

scaling will be hindered. SMEs are

essential to identify and adapt relevant

technology advances with innovation in

locally relevant business models that put

those advances to use.

Fortunately, a number of models

are emerging to address the barriers

SMEs face, so that local firms grow in

rapidly expanding climate sectors. The

World Bank recently released a report,

Innovations for Scaling Green Sectors,

that analysed the success and failure

of SMEs to scale climate innovations in

developing country markets. It proposed

a framework of how these companies

Local SMEs play an essential

role in scaling climate innovations for

developing countries, and more needs

to be done to support them.

can be supported, as shown in Table 2.

The World Bank Group is putting

these principles into action with its

infoDev Climate Technology Program

(CTP), supported by the governments

of the United Kingdom, Denmark, the

Netherlands, Australia and Norway. The

CTP has launched a network of Climate

Innovation Centers in seven developing

countries that directly support climate

SMEs to commercialise and scale their

innovations. A second generation of

Climate Innovation Centers is under

development.

At COP22 in Marrakech, the World Bank

expanded its work in this area with the

launch of the Climate Business Innovation

Network (CBIN), in partnership with the

Moroccan government. The CBIN crowds

in a range of local and global stakeholders

from the public and private sector to bring

comprehensive support to the entire

innovation ecosystem for climate sectors

in developing countries, with particular

focus on local SMEs.

Many companies supported by the

CTP are already making a difference in

the climate sectors of their countries. In

Ghana, Gloria Asarea Adu and Marigold

Adu lead Global Bamboo, a company

selling briquettes from bamboo that

preserve forests, reduce emissions and

decrease health risks by reducing smoke.

In Morocco, another CTP-supported

company, eLum, is using innovative

artificial intelligence software to optimise

energy management between solar

panels, battery systems and the grid

to reduce both electricity bills and

emissions. And in Kenya, Safi Organics

72


Table 2. Opportunities and innovations for scaling green sectors

Opportunity

Business model

innovations

Examples

• Mobile-enabled PAYGO financing mechanism has fostered the development of green subsectors such as

SHS.

• Bundled service combines related product offerings and builds forward and backward integration for

products and services to offer packages of solutions.

• Credit history facilitation for low-income customers through initial sales and monthly payment history

allows customers to upgrade and access credit for other purposes and from other finance providers.

INNOVATION

Enabling

technology

platforms

Market creation

and de-risking

mechanisms

Speciality

financing

instruments for

green businesses

Technology and

business model

transfer

Strategic

partnerships

• Technology that allows for rapid credit appraisal of potential low-income consumers is being piloted.

• Technology platforms / MNOs that enable payments and collections (such as Safaricom’s M-PESA for

payments).

• Technology platforms / MNOs that enable payments and collections (such as Safaricom’s M-PESA for

payments).

• Convergence and combination of multiple technology-backed services has enabled an overall drop in

costs such as smart meters, mobile money and low-cost solar for SHS.

• Quality certification programmes that establish quality standards and best practices provide clarity in the

marketplace for consumers and ensure that poor quality products do not spoil the market for green products.

• Trade and industry associations can provide services such as policy development and analysis, training,

codes of practice, industry promotion, networking, conferences and industry updates.

• Development of robust data metrics that allow investors interested in green enterprises to measure the

economic, social, and environmental performance of their investment are important tools to drive sector

development.

• Speciality financing mechanisms that invest in early stage green enterprises such as World Bank

Group’s climate venture facilities (CVFs), growth stage low-cost debt and working capital facilities, and

instruments that provide mitigation of local currency and interest rate risk for green enterprises, can drive

green subsectors.

• Specific efforts to transfer technology or business models from one country to another can potentially

enable scale.

• Matchmaking of foreign businesses or technology with local businesses is being piloted to help

successful green businesses and business models to scale out.

• Choosing the business partner and area of collaboration has enabled many green enterprises to

operationally scale their businesses both in their home countries and expand outside to cover a larger

customer base.

• Partnerships for building customer awareness and for customer financing help green businesses in

market building and reaching potential customers.

Source: Innovations for Scaling Green Sectors report, infoDev, 2017

promotes climate-smart agriculture by

converting agricultural waste into carbonnegative

soil conditioner. The company

founder, Samuel Rigu, has already

expanded production capacity from five

to 25 tons per month and has a vision

for Safi Organics to grow to the point of

reaching 38 million farmers across Africa.

In these and many other cases,

companies are helping their countries

respond to climate challenges with a

pro-growth approach. Without these

SMEs, the new clean technology

advances being seen around the

world would not be adapted to local

circumstances for deployment and

scale-up.

However, more still needs to be done

to build on these successes. We need

to strengthen the crucial link that local

SMEs represent in scaling the innovations

essential for developing countries to

address climate change. The historic shift

to greener and cleaner economies is

proceeding apace at the global level, but

we must ensure that developing countries

take part in this process.

The World Bank Group is eager to

partner with others to expand the work

that makes local SMEs a key player in

this transformation. In doing so, we can

bring the clean technology revolution

to developing countries so they can not

only address climate threats but also

drive growth through job creation and

investment in highly dynamic markets.

73


INNOVATION

INNOVATIVE

TECHNOLOGIES

PROVIDE THE

ANSWER TO

CLIMATE CHANGE

Dr Roland Busch, Chief Technology

Officer and Member of the Managing

Board of Siemens AG

Follow me on Twitter @BuschRo

74

On sunny days some residents in

Brooklyn generate more electricity

from the solar panels on their roofs

than they can consume. Fortunately as

members of the Brooklyn Micogrid project,

they can trade this electricity with their

neighbours on a blockchain platform. While

helping to reduce their community’s carbon

emissions, these residents also benefit

through lower energy bills. And with plans

to install battery storage, should a big storm

hit, this Brooklyn community won’t be left

in the dark.

Every time a severe storm strikes,

the issue of climate changes raises its

head. There is a growing acceptance

that the effects of climate change

are happening now and not in some

distant future. This year alone several

extreme weather events have damaged

infrastructure, caused economic losses

and put lives at risk. Business as usual is

no longer an option. Like the residents of

Brooklyn, governments, companies and

communities need to act.

Digitalisation can make the energy

transition happen

If we want to limit global warming to 2°C

as outlined in the Paris Agreement, then

renewable sources will have to play a

bigger role in meeting energy needs. The

progress made is encouraging. Who would

have thought 10 years ago that renewables

would be as competitive as fossil fuels, not

to mention the positive effect on job creation.

Given the scale and their intermittent nature,

digital technologies will be a key enabler to

increasing the share of renewable energy

generation. Innovative technologies are

already available today for grid integration,

stability, demand management and storage.

Governments will need to bring forward

policies for electricity markets and carbon

pricing to foster long-term investment.

Switching to electric power also offers

enormous potential to decarbonise our

economy, from heating for buildings,

to power for industrial processes and

transportation. Public transport in many

cities, such as metros and trams, already

operate as electrified systems. While

road transport is still heavily reliant on

combustion engines, several automotive

companies recently committed to

producing more hybrid and electric

vehicles. Meanwhile Siemens has been

working on an innovative solution to

electrify freight transport, known as

eHighway, with demonstration projects

in Germany, Sweden and California.

Energy efficiency measures, like building


Brooklyn Microgrid participants can sell excess solar power to their neighbours on the TransActive

Grid blockchain platform from LO3 Energy. Siemens provides microgrid control solutions.

INNOVATION

Copyright LO3 Energy

automation systems or energy monitoring

are compelling ways to reduce energy

consumption and thereby emissions,

through their cost saving benefits.

Cutting carbon through

connected cities

Responsible for 80 per cent of CO2

emissions, cities have a fundamental role to

play. The first step in tackling emissions is to

have a clear strategy. The City Performance

Tool (CyPT), developed by Siemens,

assesses the impact of technologies in

the building, energy, and transport sectors

on GHG emissions and air pollutants, and

the CAPEX and OPEX required. Many

cities have used the CyPT tool to design

strategies to reduce emissions and found

that investing in green technologies also

creates job opportunities.

Integrating distributed renewable

energy sources, like the Brooklyn

Microgrid, is an effective way to cut

emissions, boost resilience and meet

energy demands. The IEA estimates that

by 2050, rooftop solar panels could supply

almost one third of a city’s energy needs.

Copyright: Siemens Press

In 2015, Siemens pledged to

become the world’s first major carbonneutral

industrial enterprise by 2030.

As previously mentioned, electrified

transport can significantly cut emissions.

But the bigger opportunity comes from

using IoT technologies to integrate sectors.

Connected buildings and electric vehicles

can interact with power grids to consume,

store or supply electricity as required.

Integrated transport systems combined

with innovative mobility services can

encourage uptake of public transport.

Open IoT operating systems, like

MindSphere can help cities to take

advantage of these opportunities by

securely connecting their infrastructure to

the cloud and leverage their data.

Data insights coupled with the ability of

systems to speak to each other can help

The eHighway is an innovative solution

for electrified road freight transport.

cities tackle issues like congestion and

air pollution and to better manage energy,

water and other services in innovative

ways. Singapore, for example will be

piloting MindSphere to become a fully

integrated urban ecosystem.

The business case for climate action

More and more companies are taking

action to green their footprint and enjoying

the benefits, such as lower costs through

energy efficiency measures, as well as new

business opportunities. In 2015, Siemens

pledged to become the world’s first major

carbon-neutral industrial enterprise by 2030.

The business case is clear: out of the €100

million investments in energy-efficiency

technologies, we expect annual savings of at

least €20 million. Our environmental portfolio

helped customers and partners reduce their

CO2 emissions by 521 million metric tons.

That’s around ten times New York’s annual

carbon-dioxide output. And it generated

revenues of €36 billion in 2016.

While governments have an important

role to play by establishing the requisite

frameworks and policies; businesses,

communities and cities cannot afford to

delay action. Our vulnerability to climate

change can carry a very high price tag.

Whereas investing in green technologies

can create jobs, lower costs and improve

quality of life. So what are we waiting for?

75


© Jean Revillard / Rezo.ch

INNOVATION

Existing clean technologies and

processes are profitable and could

divide by two the energy consumption

of the world and therefore the CO 2

emissions.

76


1000

INNOVATION

PROFITABLE

SOLUTIONS

TO SOLVE

CLIMATE

CHANGE

Dr Bertrand Piccard, Psychiatrist and

Explorer, Initiator and Chairman of

the Solar Impulse Foundation

When I was flying with my solar

plane over the Atlantic Ocean,

I remember looking at the sun

that was giving energy to my four electric

motors and their huge propellers. There

was no noise, no pollution, no fuel… and I

could fly for ever. At one moment I thought,

“This is science fiction, I’m in the future.”

And then I realised, “No, it’s completely

wrong, I’m in the present. This is what the

technologies of today already allow me to

do. It’s the rest of the world that is in the

past, with old and ineff icient devices.”

A rough estimation shows that existing

clean technologies and processes could

divide by two the energy consumption

of the world and therefore the CO 2

emissions, if only they were implemented.

Thousands of them are available

everywhere, for everyone to use, but

who knows about them? They are often

hidden in start-ups or research labs. So

few people realise how profitable, for

both the industry and the planet, they

have become! They create jobs, generate

profit and boost economic growth.

I have always said that protection of the

environment would become a reality only

if it requires no financial or behavioural

sacrifices. Who would renounce driving

their car or heating their house because

of sea levels rising in 20 years’ time? The

truth is that today, even if climate change

didn’t exist, building clean and eff icient

infrastructures would make sense. They

represent the greatest industrial market

ever, with the introduction of electric

mobility, fully insulated constructions,

heat pumps and LED lighting, smart grids

and modern industrial processes. And

77


© Jean Revillard / Rezo.ch

INNOVATION

for the protectors of the environment, a

clean growth is certainly better than the

dirty status quo we have today. That’s a

win-win situation.

An encouraging sign of this is the rapid

expansion of the green bond market,

which doubled to almost US$83 billion

after the signature of the 2015 Climate

Agreement. Investors are beginning

to take into account the threats – slow

growth trap, low interest rates – of being

addicted to fossil fuels. Investing in these

new solutions is the next driver of real

economic development.

But to reach the objectives set in Paris and

keep global warming below the 2 degree

mark, public and private sector investment

in clean energy needs to reach at least US$1

trillion per year by 2030, starting now, as

shown in the New Climate Economy 2015

report. Although US$1 trillion per year might

seem a huge amount, we need to consider

this a profitable investment rather than an

expensive cost. So the more we invest, the

more we will earn.

Yet, we keep setting goals and objectives

for 2050, 2040, 2030 at best. I hate this,

because it is too far away – no one feels

accountable or responsible for such a distant

target! Decision-makers need to focus

on solutions and shorter-term achievable

goals as part of their roadmaps for action.

An ambitious legal framework would pull

innovative products to the market instead of

leaving everybody in uncertainty.

78

Last year Solar Impulse completed

the first solar flight around the world,

demonstrating that clean technologies

can make a plane fly perpetually with no

fuel. Today the second part of my vision

has started: selecting 1000 profitable

solutions to protect the environment by

COP24. I will then personally go around

the world again, to deliver those same

solutions to governments, companies

and institutions, and we shall of course

also make them available for everyone to

access and use.

Things have been rapidly falling

into place. Several partners have

extended their support to the Solar

Impulse Foundation (www.solarimpulse.

com) to create the World Alliance for

Efficient Solutions. We have entered into

close collaboration with a number of

international institutions, states as well

as cities over the world. We have already

gathered more than 500 members

bringing solutions that are designed to

be both profitable and environmentally

friendly. In parallel, we are growing a

network of independent experts who will

assess the solutions from a technical and

financial standpoint.

This is my new challenge and I do

need all of you for that: demonstrate that

solutions to solve climate change not only

work, but are profitable and can improve

the quality of life on Earth; that they are

‘logical’ rather than simply ‘eco-logical’.

Together we can make what was

possible in the air, possible on the ground.

We need to start telling ourselves, and our

political leaders, that clean solutions are

profitable, and that change is possible, not

only in 2050, but already today.

© Jean Revillard / Rezo.ch

Join us!

We want to find 1000 profitable

and clean solutions to help

governments, companies

and institutions meet their

environmental targets by adopting

more ambitious policies. If you are

working on innovative solutions,

seeking how to use them in your

daily lives or are keen to invest,

we invite you to take part in our

next big adventure! Visit www.

solarimpulse.com


DECARBONISING

THE ENERGY SECTOR

ENERGY

Climate Action’s Adam Wentworth spoke with Dr Christoph Frei,

Secretary General of the World Energy Council, on why innovative

policies are key to driving progress.

Is there a model for how national

governments can create the right set

of sustainable energy policies?

There is no doubt that the energy sector

worldwide is undergoing a dramatic

transition in which governments are playing

their part. Many attribute this transition

to the need to prevent, or at least plan for

the potential impact of, climate change

whilst enabling access for billions more

new energy users and this in a context of

dramatic innovation fuelled by electrification

of final demand, decentralisation and

digitalisation. The drive to reduce

greenhouse gas emissions has certainly

been a critical stimulus to the development

of new technologies such as solar and

wind, which are becoming increasingly

competitive with traditional energy systems

based on fossil fuels and nuclear.

Focused, innovative, well-designed

energy policies are the key to tackling

continued uncertainty and dynamic

changes, if the goal of a sustainable

energy future is to be achieved, as

identified in our 2016 World Energy

Council Energy Trilemma report presented

at last year’s Clean Energy Ministerial.

The quest to finance the transition to a

more sustainable energy system remains

an issue that keeps energy leaders and

policymakers busy at work, while there

is a growing acknowledgement that

adaptation to new resilience challenges,

new digital solutions and smart innovation

as well as regional interconnection will

be key parts of the solution. If we are to

The one thing, above everything

else, that is keeping energy leaders

awake at night is the impact of

digitalisation.

successfully meet the Trilemma goals of

security, sustainability and equity, leaders

need to come up with innovative policies

and look beyond the energy sector, which

will require changes to the economy,

to our transportation, manufacturing,

construction and agricultural sectors.

The forecasts for growth in the

renewable energy sector have

confounded many expectations. Do

you think the current high levels of

capacity can continue?

We have seen a dramatic increase of

unconventional resources and no less

dramatic technology improvement in the

renewables space over the past decade,

in particular, driven by wind and solar.

In 2015, the share of renewable energies

in total global power generation was

23 per cent, exactly the same figure as

in 1970. This is going to change within

the next 45 years. In our latest World

Energy Scenarios report, which sets out

three potential pathways for the energy

sector to 2060, we see a strong increase

in the share of renewable energies. The

share being up to two third by 2060 –

depending on the respective scenario.

In other words, most of the new power

generation will be covered by renewables,

with the use of coal as a prime energy

source in decline.

What are the main issues renewable

energy will face once it becomes a

mainstream energy source?

Renewables such as solar, wind and

hydropower now account for about 30 per

cent of the total installed power generating

capacity and 23per cent of total global

electricity production and will continue to

grow. However, more progress is urgently

needed to scale up action on energy

efficiency. Given the intermittency of energy

from renewable sources, we have to rethink

the system from one where supply follows

demand to one where demand follows

supply. This will be enabled by progress

in demand response, sector coupling,

smart grids and ultimately an internet of

things in energy, all different features of

79


ENERGY

In the past 45 years, the average

rate of decarbonisation has been

around 1 per cent per year. To keep

temperature rises below 2°C, this

needs to be 6 per cent, per year.

the digitalisation in energy. With a less

concentrated, more material intense and

more decentralised nature of the system

issues such as recycling of (scarce)

materials will also become more important.

Are there any sectors in particular

which are facing real challenges in

being able to make the transition to a

low-carbon future?

Transitioning global transport currently

forms one of the hardest obstacles to

overcome in an effort to decarbonise

future energy systems. Take Germany

for example: Between 1990 and 2016,

a reduction in CO 2

emissions of 24 per

cent was achieved, but the transport

sector contributed 0 per cent to this

development. However, according to our

scenarios work, globally, we will see an

increase in the electric vehicle share of

the light-duty vehicle fleet from 2.5 to 2.7

times by 2060. Different scenarios show

oil’s share in transport decreasing from the

92 per cent it is at today to between 78, 67

and 60 per cent.

Advances in second and third

generation biofuels make substantial

headway in all three scenarios, ranging

from 10, 16 and 21 per cent. In addition,

two of our scenarios see rapid penetration

of electric and hybrid plug-in vehicles

globally, which reflects 26 to 32 per cent

of the light-duty vehicle fleet in 2060.

We have recently seen France and the

UK announcing the end of diesel and

gasoline by 2040, the German Parliament

having discussed a similar measure

possibly before that. Most importantly,

China’s Government is considering such

measures and this would be a game

changer for transport if it went ahead. The

world’s largest vehicle market would then

march to a tipping point and pull others

to follow.

80

The World Energy Council has just

finished its World Energy Week and

Executive Assembly. Were there any

clear themes on sustainability which

emerged from the discussions?

Decarbonisation is only part of the transition

story. Electrification of final demand

combined with decentralisation and

digitalisation define an incredible space

of innovation in terms of technology and

business models. Our 2017 World Energy

Trilemma report assesses decentralisation

and its potential impact on backbone

infrastructure and discussions at the World

Energy Week highlighted the related

uncertainties and raise questions about

solidarity, cyber security, and competition

between incumbents and new players.

The research behind our Energy

Trilemma report this year, has attempted

to gauge the potential impact of the

energy transition, and in particular,

decentralisation, on the wide range of

energy systems that exist in different

countries around the world. Renewables

and digital innovation open-up

opportunities for new entrants who can

compete to provide prosumers with an

array of new services, act as aggregators,

deliver new forms of supply and system

support products, and compete with

existing assets.

Implications and opportunities differ

greatly in developed countries with

established transmission infrastructures,

compared with developing and emerging

countries where access to energy is still

a major obstacle to be overcome and

where rural entrepreneurs offer solutions

in a space that previously was simply left

in the dark.

What is the World Energy Council’s

role in promoting responsive and

responsible leadership?

The Council is the largest global network

of energy leaders and practitioners

dedicated to delivering a sustainable

energy system for the greatest benefit of

all. Originally intended as an organisation

to manage a gathering of energy experts,

we have evolved into one of the world’s

most influential energy organisations with

our leadership dialogue focused on the

energy transition.

We continue to deliver on our original

goal by organising the world’s largest allenergy

event, the World Energy Congress.

In addition to global and regional

Energy Leaders Summits and Ministerial

Roundtables as well as national dialogues

aimed at supporting policymakers,

experts and industry leaders as they

seek solutions to shape and successfully

master the transition.

The Council also publishes authoritative

studies – our World Energy Scenarios,

Trilemma, Issues Monitor and innovation

work – to help further the vision of a

sustainable energy future and promote

responsive and responsible leadership.

As the UN-accredited global energy body,

we work with governments, agencies

and companies to help inform policy

development and strategic decisionmaking

and planning.

Are there any new technologies

or innovations in energy which

are exciting you, or could be

transformative in the future?

If the Grand Transition is driven by

a combination of factors including

decarbonisation, electrification of final

demand, decentralisation, digitalisation and

resilience to new physical risks such as

extreme weather, cyber or the energy water

food nexus, a number of specific innovation

areas capture particular attention.

The one thing above everything else

that is keeping energy leaders awake at

night is the impact of digitalisation on

the future of the energy system. New

business models and digitalisation will

define momentum on a path of innovation

which will change the way we produce

and use energy in industrialised and

developing worlds; and how the resulting

transformation will drive new realities and

priorities in global energy governance.

We see a world where big data,

machine learning, and artificial


Dr Christoph Frei, Secretary General

of the World Energy Council

ENERGY

81


ENERGY

intelligence enable automated system

analytics and instant demand response

is very different from the analogue

world where many leaders started

their careers. Predictive maintenance

and supply chain management can

dramatically decrease outage times

and offers entirely new opportunities

in traffic and congestion management.

We also see a world in which the

internet of things and blockchains

will enable direct and low-cost

transactions between parties and

between appliances is fast approaching,

with at its core precisely recorded

transactions in unfalsifiable ledgers

that also open new possibilities for

supply chain tracing and product

labelling by fabrication origin, materials

used or emissions caused. Blockchain

is an issue that is currently on the

top of Energy Leaders’ list of critical

uncertainties.

Other areas of critical interest are

storage and e-mobility as these have great

potential to accelerate decarbonisation

82

in transport, or new platform business

models as these have the potential to

leverage existing assets in new utilisation

areas – think of fridges or electric boilers

combined with electric storage services.

Last but not least, mobile banking

supported by cloud technology is already

today enabling micro-leasing schemes for

rural households in the developing world

and revolutionising opportunities also in

the energy access space.

These new technologies and business

models will not only change the way

we operate the energy system but will

revolutionise the potential for a sharing

and leasing economy in energy.

Do you have any aspirations for what

COP23 can, or should, achieve?

Do you have a key message to

attendees?

The UN Climate Change Conference

(COP23 Fiji) in Bonn comes at a time

when it is no longer sufficient to maintain

the momentum. In the past 45 years,

the average rate of decarbonisation has

been around 1 per cent per year. To keep

temperature rises below 2°C, this needs

to be 6 per cent, per year. This requires

a revolution, not an evolution. Another

way of trying to put a value on the rate

of decarbonisation is to look at fossil

reserves. We currently have an equivalent

of 2,800 Gt CO 2

in proven reserves of

coal, oil and gas, but to not exceed the

2°C target, we could only emit 1,000 Gt of

CO 2

. Behind these figures hides potential

for geopolitical tension, which has to

be overcome. The Paris Agreement got

us one third of the way to meeting the

temperature change target and we see

many countries introducing concrete steps

post-Paris.

We now need to take the next leap

in closing the ambition gap, delivering

on implementation and accelerating

on innovation. The world is now on

a trajectory where only a climate of

innovation will allow us to navigate the

way to a truly sustainable energy future

for the greatest benefit of all.


Let’s create a world

that runs entirely on

green energy.

A decade ago, as DONG Energy, we started transforming

from a black to a green energy company. Today, as Ørsted,

we have become a global leader in offshore wind. In 2017,

we succeeded in driving the cost of offshore wind below

that of new coal and gas power. By 2023 we will no longer

use coal and have reduced our CO 2 emissions by 96%

compared to 2006.


ENERGY

INTEGRATING

RENEWABLES

INTO OUR

ENERGY

SYSTEMS

Credit: Renewables 2017 Global Status Report, Paris, REN21 Secretariat

Wind Power Works, Rio do fogo,

Rio Grande do Norte, Brazil

84


Christine Lins,

Executive Secretary of REN21

When REN21 was founded in 2004,

the future of renewable energy

looked very diff erent from what

is possible today. No one imagined back

then that nearly 60 per cent of newly added

power capacity would be renewablesbased

– but that is what we see today. No

one imagined that tens of millions of homes

and businesses would add solar PV to

their rooftops so rapidly. No one imagined

that China would go from being a minor

player to a global leader in less than ten

years. No one imagined that emerging

economies and developing countries would

attract nearly 50 per cent of global annual

renewable energy investment, totalling

US$250 billion by the end of 2016.

Today, we can categorically state that

the worldwide diff usion and uptake of

renewable energies has outstripped all our

expectations. The expansion of renewable

energy technologies has been driven

by a changing global policy landscape

that has drawn investments and created

attractive markets. In turn, economies of

scale and technology advances have led

to decreasing costs and fuelled sustained

growth in the sector.

A handful of countries have led the way,

developing innovative policies that have

driven much of the change witnessed over

the past decade. The challenge now is

how to integrate high shares of renewables

into the energy system. Today, the

‘Energiewende’ model – the transition to a

sustainable economy based on renewable

energy and energy eff iciency – is inspiring

many countries around the globe.

While power systems have always

had to accommodate variability in both

supply and demand, the growing adoption

of variable renewable energy (VRE) is

changing how power systems are planned,

designed and operated. The variability

of output from solar and wind power

requires more flexibility from the rest of

the power system, including generating

resources, distribution networks and even

electricity consumers. The myth that fossil

and nuclear power are indispensable to

provide ‘baseload’ electricity supply when

the sun is not shining or the wind is not

blowing has been shown to be false.

In areas where demand is growing

(notably in developing economies), there is

an opportunity for new and less-established

power systems to grow in concert with

higher shares of renewable generation,

as more flexible systems are developed.

85

ENERGY


ENERGY

Credit: ABENGOA

A solar parabolic trough plant

in Solana ,Arizona, USA.

It is already possible to avoid lock-in of

traditional baseload generation by using VRE

to provide low-cost, clean energy access

and while avoiding costly investments in

traditional, and less flexible, generation and

grid infrastructure. And this is good news for

the climate as renewable resources have low

greenhouse gas emissions.

Discussion about 100 per cent

renewable energy is also gaining

prominence. It is further fuelled by the

growing evidence that renewable energy

when paired with energy efficiency is in

many cases the most cost effective option

today. In order to reach 100 per cent

renewable energy a systems approach

to energy – where the generation and

use of renewable energy is looked at

from a cross-cutting perspective – needs

to be adopted. This includes looking

at supporting infrastructure such as

transmission and distribution networks,

balancing supply and demand measures,

energy efficiency measures and sector

coupling, as well as a wide range of

enabling technologies. The inclusion

of social participation, in the form of

universal energy access, socio-economic

co-benefits and the empowerment of

marginalised social groups and local

communities is also part of the approach.

Renewable energy coupled with

innovative approaches present myriad

benefits that set them apart from their

86

traditional counterparts. They draw

on local resources, can be installed

quickly in centralised or decentralised

configurations and, unlike traditional

systems, are not hampered by a lack of

existing infrastructure. They do not emit

greenhouse gases or other pollutants

during generation and generally require

little water to operate. Due to their

decentralised nature, they can also

improve system security in the face of

extreme events due to climate change. In

the power sector VRE is now the lowestcost

source of newly constructed power

generation available in many parts of the

The growing

adoption of

variable renewable

energy (VRE) is

changing how

power systems are

planned, designed

and operated.

world, thanks to rapidly declining capital

costs and zero fuel costs.

REN21’s latest Renewables Global

Futures Report documents an

overwhelming consensus that renewable

power will dominate in the future. The

key lesson for integrating large shares

of variable renewable generation is to

ensure maximum flexibility in the power

system. A shift away from the traditional

‘baseload thinking’ in power system

planning and operations will facilitate

optimal integration of growing shares of

VRE while providing on-demand, reliable

and affordable electricity.

There is broad consensus among the

world’s leaders that we need to work

together to mitigate climate change.

Increasingly countries are on a pathway

to decarbonise their energy sectors, and

more and more corporations are joining

them in this endeavour by subscribing

to ambitious renewable energy targets.

As VRE resources and other enabling

technologies – including storage, demand

response and efficiency improvements

– continue to achieve more favourable

cost and performance characteristics, the

incentive to deploy them will continue to

increase. The resulting changes will move

both new and existing power systems

further towards a model of flexible, clean,

renewable generation. This is good news

for our climate.


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ENERGY

AFRICA’S

RENEWABLE

ENERGY:

CHALLENGES AND

OPPORTUNITIES

The geographical spread of renewable energy

resources in Africa gives each region a comparative

advantage that can be used for its benefit... However,

despite the enormous potential, many of these resources are

not fully developed.

88


Dr Amani Abou-Zeid, Commissioner

for Infrastructure and Energy at the

African Union Commission (AUC)

Africa has vast renewable energy

resources including hydro, solar,

wind, geothermal and biomass,

spread throughout the continent.

Hydropower worth about 12 per cent of

the world’s technically feasible potential

is found in Africa, and could generate

over 1,800TWh/yr of electricity. Though

available in most parts of the continent,

huge hydropower resources are located

in central, eastern and southern regions of

Africa. The continent’s largest hydropower

site with a capacity of well over 30,000

MW, the Grand Inga project, one of the

African Union’s flagship projects, is found

in the Democratic Republic of Congo.

Geothermal energy is predominantly

found in the east African region, and its

potential is estimated at over 15,000 MW.

Solar and wind energy resources are

found throughout the continent; however,

the Sahara desert and other arid areas

off er excellent locations for diff erent

types of solar energy development. A

huge variety of biomass resources are

distributed in all regions, with the reserves

of woody biomass alone estimated at over

70 billion tonnes.

The geographical spread of renewable

energy resources in Africa gives each

region a comparative advantage that

can be used for its benefit, as well as

promoting synergy with the rest of the

continent, providing reliable least-cost

energy. However, despite the enormous

potential, many of these resources are

not fully developed. According to the

International Renewable Energy Agency

(IRENA), Africa’s installed capacity from

renewable energy in 2016 was 38.3GW,

which was about 2 per cent of the global

renewable energy installed capacity of

2,008GW. The African Union Commission

(AUC), working closely with regional

economic communities, member states

and development partners, has designed

programmes aimed at promoting the rapid

development of African renewable energy.

This requires the participation of public

sector, private sector and civil society,

including community-based initiatives

and small and medium-sized enterprises

(SMEs). One of the critical areas to

address to pave the way for diff erent

actors is the energy market structure.

The AUC, in cooperation with regional

economic communities, power pools,

specialised pan-African organisations and

member states, is working to develop a

continental energy market that enhances

eff iciency and competitiveness; and support

private sector participation to complement

public sector resources. A Strategy and

Action Plan for the harmonisation of policy

and regulatory frameworks have been

developed and adopted by the specialised

ENERGY

The Olkaria II Geothermal

Power Station in Kenya

89


ENERGY

Technical Committee of Ministers

responsible for the sector.

The Action Plan is structured into

three terms: short (3-5 years: 2017-2021),

medium (6-8 years: 2022-2024) and

long (9-14 years: 2025-2030). To ensure

the development of regional electricity

markets in Africa, the Plan supports

policy and legislative instruments, as

well as other measures to be taken at

the national, regional and continental

levels. A continental electricity market will

create opportunities where each region,

through its power pool, can place its most

competitive energy into the market. It

will also enhance the reliability of supply,

as well as enabling interdependence

of different regions for reserve margins

and peak support, by making use of

such elements as different time zones,

differences in peak time, hydrological

seasonality, and intermittency of resources

such as wind and solar.

To develop the renewable energy

resource on the continent, the AUC is also

focusing on the infrastructure development

that will enable the interconnection of all

regions through high voltage transmission

lines. Key transmission corridors linking

regions and connecting generation

resources to demand centres have been

identified under the Programme for

Infrastructure Development for Africa

(PIDA). These transmission corridors are

at various stages of implementation under

the coordination of the AUC and NEPAD

Planning and Coordination Agency (NPCA).

One of the challenges facing the

African continent is low access to modern

energy services, with more than 600

million people lacking connections to

90

The Grand Inga project in the Democratic Republic of Congo is Africa’s largest

hydropower site with a capacity of well over 30,000 MW

electricity. To address this challenge

through renewable energy resources, AUC

is also developing specific interventions

for specific types of renewables. The

Commission’s small hydropower,

bioenergy and solar energy programmes

aim at benefiting local communities for

domestic as well as productive uses.

These programmes are the focus of

Renewables planning

To take full advantage of the

opportunities that renewable

energy resources in Africa present,

it is necessary to ensure that:

• The harmonisation of the

regulatory frameworks is

implemented, and member

states and power pools that

require support are assisted.

• Missing links in the

interconnection of electricity

networks across the continent

are fast-tracked to completion.

• Innovation is embraced, both

in technology and business

models, in order to accelerate

the rate of energy access using

renewable energy resources.

• Development of decentralised

systems is encouraged, along

with the introduction of business

models that embrace different

players in the energy market –

including SMEs and non-state

actors.

policy guidelines, building capacity

and designing appropriate frameworks

for adoption by member states. The

AUC is currently developing technical

and commercial regulatory models

for micro and mini grids that member

states can adapt to suit their specific

requirements. The Commission is also

building a collaboration network with the

Regional Centres for Renewable Energy

and Energy Efficiency to strengthen the

flow of information and dissemination

of continental programmes to the areas

where they are most needed. This network

will also encourage peer learning among

the centres.

In addressing policy and strategy

concerns affecting renewable energy in

Africa, it is important to address specific

challenges that are unique to various types

of renewables. In the case of geothermal,

the risks are present in the upstream

stage development during surface studies,

exploration drilling and appraisal drilling.

These make it difficult for member states

to attract private investment in the sector;

and the few investors that undertake this

mark up their prices significantly. The

AUC, together with development partners

including the DFID, kfW, New Zealand,

Power Africa and Germany, have designed

the Geothermal Risk Mitigation Facility

(GRMF) to support private and public

developers during the upstream phase.

The GRMF provides grants for feasibility

studies, exploration drilling and appraisal

drilling. In addition GRMF supports capacity

development for developers through

technical training. Since its establishment

in 2012, GRMF has supported 27

developers, both private and public, over

four application rounds and has awarded

grants worth US$97 million. Building on

this experience, the AUC has developed

Africa Geothermal Drilling Code, adapted

from New Zealand, and has set up a

Regional Geothermal Centre of Excellence

based in Kenya, which is a leading light in

geothermal development in Africa.

In the case of small hydropower

development, the starting point is

mapping of the resource to establish

the actual potential and identify sites to

which developers can be directed. Further,

capacity development for technicians to

carry out operation and maintenance of

the plants is crucial. The AUC is designing

a programme to address these issues,

starting in 2018.


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ENERGY

ARE INDIA’S

RENEWABLE

ENERGY

TARGETS

OVER

AMBITIOUS?

92


Leena Srivastava,

Vice Chancellor of TERI University

India ratified the Paris Agreement just

over a year ago. A cornerstone of

India’s commitment towards climate

action is its acknowledged ambitious

target on renewable energy. Starting with

a relatively modest target of 20GW of

renewable energy by 2022 (announced in

2008), India rapidly scaled up this ambition

to 175GW (in January 2015)! Undoubtedly,

the rapid progress on renewable energy

technologies and the trend of rapidly

declining international prices, combined

with the growing demand for, as well

as shortages of, energy gave India the

confidence that this would be a win-win

commitment for the country.

As part of its pledges under the Paris

Agreement, India has said that it will

produce 40 per cent of its energy through

non-fossil sources by 2030 – placing the

renewable energy target in that year in the

vicinity of an estimated 300GW.

So, how is India faring in meeting

its ambitions? On the positive side, the

continuing ambitious pronouncements

of the government are keeping the

industry excited. The lowest solar power

bid that the country saw in May 2017 was

Rs2.44/unit – significantly lower than

coal thermal prices of around Rs3.20

per unit and a solar power bid of Rs2.97

in February of the same year. Earlier

in October 2017, the bid price for wind

power projects in the country saw tariffs

fall to Rs2.64 per unit. No surprise then

that there seems to be a rethink on coal

power generation in the country.

On the negative side, however, the

initial euphoria on the renewable energy

sector in the country is being tempered,

if not already leading to anguish. There

are several reasons for this. First, the

extremely low discovery prices for solar

and wind power in certain places are,

in turn, leading to extremely aggressive

ENERGY

The extremely low discovery

prices for solar and wind power in

certain places are leading to extremely

aggressive negotiation by procurers in

other locales.

93


ENERGY

100

80

Figure 1: India’s 2022 renewable energy target

20 GW

Utility scale

solar projects

Capacity (InGW)

60

40

20

0

5 GW

10 GW

60 GW

40 GW

40 GW

Rooftop

solar projects

Ultra mega park

solar projects

Source: ET Energyworld

Small Hydel Projects Biomass Wind Solar

Source of renewable energy

Driven from the highest level of

government, all actors sought to align

themselves quickly to the needs of the

sector.

negotiation by procurers in other locales

as well, pushing developers to lower

prices, even below their winning bids!

In some instances, existing contracts

have been reopened for re-negotiation.

As a result of such factors, financial

institutions have become wary of

renewable energy projects and are not

enthusiastic about lending support to

them. The market is thus beginning

to see a number of winning bidders

seeking to sell their projects even before

starting work on them.

The poor state of the centralised

grid infrastructure as well as the poor

financial health of the renewable energy

procurement entities (the distribution

companies) has further eroded the

confidence of financial institutions on the

risks, and the financial viability, of such

projects. Unfortunately, the government’s

attempts to address these bottlenecks

seem to be too little and too late for some

of these projects.

The solar rooftops programme in the

country is not taking off at the desired

speed, for many reasons ranging from

practical problems on the ground from

taxation structures, to multiple uses of

roof space, a weak confidence in systems

and performance as well as a reluctance

on the part of distribution utilities to

support this scheme.

Preparation on the supporting

environment is often inadequate to allow a

timely delivery of desired outcomes – be it

related to buy-in from state governments,

land acquisition, strength and modernity of

the grid infrastructure, presence of market

actors along the value chain or indeed

the capacities that exist within policy and

regulatory bodies to quickly and effectively

deal with emerging challenges.

And finally, the ability may be lacking

to cope with the rapidly evolving

technological solution space and the

capability to be able to look at integrated

systemic solutions.

Despite the daunting difficulties, it is

also a fact that India will still have a much

larger renewable energy capacity in

place by 2022 than it would have without

such ambitious goals. It has proved to

the world that when political ambition

exists then outcomes will follow willy-nilly.

The pressure to deliver on the ambition

combined with the need to keep tariffs low,

in a price sensitive economy like India’s,

has forced it to adapt global innovations

as well as to innovate itself on things such

as the reverse bidding process for price

discovery. Driven from the highest level

of government, all actors sought to align

themselves quickly to the needs of the

sector and challenges are being addressed

as they emerge.

Could India have done things differently?

Yes, it could have ensured a more systemic

planning and roll-out of activities; it could

have built capacities in the policy and

regulatory bodies, institutions and other

stakeholders first; it could have examined

and refined the various laws that would

have enabled a smooth implementation of

rooftop solar systems; and it could have

sought to strengthen and modernise its

grid infrastructure, among other measures.

But a sequential approach of this kind

would not have guaranteed a problem-free

transformation of the economy towards

greater renewables, nor would it convey the

sense of urgency with respect to climate

action that India is succeeding in doing –

for its own populations and the world.

94


CATALYSING

AFFORDABLE,

RELIABLE AND

EFFICIENT

ENERGY IN

THE U.S.

ENERGY

As an international leader in energy

technology, development and

delivery, the U.S. is not just making

promises about clean energy and energy

efficiency, we are acting on them - and

our actions are proving that you can drive

economic growth while also upholding

environmental stewardship.

Energy productivity is an important

driver of economic prosperity in America.

Since 1970, the size of the U.S. economy

has tripled and energy productivity has

more than doubled. That means for every

kilowatt hour and gallon of gasoline

we consume we are getting twice as

much economic output. Consumers are

also dedicating a smaller percentage of

household spending to energy than at any

other time on record. This has occurred

through decades of scientific innovation

and entrepreneurship. The Department of

Energy’s (DOE’s) 17 National Laboratories

have played an important role in this

scientific innovation, helping to improve

the efficiency of many products and saving

money for their users.

One such example is refrigerators.

Today, refrigerators use about a quarter

Daniel Simmons, Acting Assistant

Secretary, Office of Energy Efficiency

and Renewable Energy (EERE), U.S.

Department of Energy

The energy America is producing

today is not only more efficient, but

also more affordable and cleaner than

ever before.

95


ENERGY

of the energy they used in 1980, while

being bigger, having more features, yet

costing half of the price. Another example

is lighting. Between 2008 and 2015, DOE’s

early-stage research on LED lighting

helped contribute to costs dropping

nearly 90 per cent. This rise in efficiency

has led to a massive increase in market

adoption of these lights, going from under

100,000 bulbs to more than 200 million

A-type bulbs in the country. Over 270

patents have resulted from DOE research

and development and have contributed

to more than $2.8 billion in U.S. energy

savings to date. We want positive changes

in energy efficiency like these to continue.

The energy America is producing

today is not only more efficient, but

also more affordable and cleaner than

ever before, whether that be energy

from coal, oil, natural gas, nuclear, or

renewables. For example, the hydraulic

fracturing revolution has cut oil prices

in half and made natural gas three times

less expensive than it was a decade

ago. Levelised costs for wind and

The DOE is eager to continue

work with our international partners

on policies that will expand access

to affordable, reliable, and efficient

energy to promote economic growth

and energy security.

solar technologies have also declined

substantially in recent years, leading to

increased renewable penetration in many

parts of the country.

Meanwhile, air quality is improving

dramatically. According to the

Environmental Protection Agency (EPA),

from 1970 to 2016, U.S. GDP grew by

253 per cent; vehicle miles traveled

increased by 190 per cent; overall energy

consumption increased by 44 per cent; yet

total air pollution (or criteria pollutants) fell

by 73 per cent.

With the modern technology we have

access to today, our country, and the

world, have an immense amount of clean

energy resources to choose from. Over

the past three decades, the U.S. coal fleet

alone has dramatically reduced emissions

of air pollutants: Since 1970, Nitrogen

Oxides (NOX), Sulfur Dioxide (SO2), and

airborne particulates (PM) emissions

(per kWh of electricity generated) have

decreased by 85 to 93 per cent.

The Department’s Clean Coal

Technology program laid the foundation

for many commercially successful coal

Comparison of Growth Areas and Emissions, 1980-2016

96


ENERGY

Between 2008 and 2015, DOE’s

early-stage research on LED lighting

helped contribute to costs dropping

nearly 90 per cent.

technologies that have significantly

reduced air pollution and improved the

environment—making today’s stateof-the-art,

coal-fired power plants

have a much smaller environmental

footprint. For a new pulverised coal

power plant, the implemented pollution

controls reduce NOX by 85 per cent,

SO2 emissions by 98 per cent, and PM

by 99.9 per cent, when compared to

an older plant that does not have these

pollution controls.

We also recognise the vital role

of nuclear as a carbon dioxide-free

technology. DOE is a world leader in

advanced nuclear energy technologies

research. This fall, the International

Atomic Energy Agency designated two

of our national labs, Oak Ridge National

Lab and Idaho National Lab, as an

International Centre based on Research

Reactors. This designation makes the

U.S. one of only four countries identified

for unique capabilities and excellence in

nuclear energy research. Nuclear energy

is one of the most affordable, reliable, and

clean energy sources on Earth, so it’s

important that we utilise this resource to

its fullest capability.

Clean coal and nuclear are just

two sources to our country’s diverse

energy mix. DOE remains committed

to a comprehensive energy strategy

to ensure we are utilising all of our

abundant, American energy resources,

including coal, nuclear, natural gas,

oil, and renewables. We hope our

international partners will also undertake

this same strategy to ensure energy

affordability, security, and reliability

throughout the world.

International cooperation is critical

to achieving our goals. Last month, I

participated in the U.S.-China Energy

Efficiency Forum in Denver, Colorado,

where more than 150 U.S. and Chinese

leaders and experts exchanged

information on energy efficiency

technologies, policies, and programmes.

I discussed the Administration’s

commitment to international leadership

on energy issues.

U.S. Secretary of Energy Rick Perry

has made it a point that the U.S. wants to

strengthen our international partnerships.

At the Clean Energy Ministerial in Beijing,

Africa Oil Week in South Africa, and

other trips abroad, Secretary Perry has

emphasised that he continues to believe

we have extraordinary opportunities to

be partners on the climate and clean

energy issues. He has also authorised

crude oil and LNG exports to several of

our international partners, increasing jobs,

economic stability, and national security

across the globe.

The DOE is eager to continue work with

our international partners on policies that

will expand access to affordable, reliable,

and efficient energy to promote economic

growth and energy security. I am confident

that the U.S. will continue to serve as

an example to the rest of the world on

how to achieve economic, energy and

environmental goals simultaneously,

and I look forward to being a part of this

ongoing effort.

97


TRANSPORT

DECARBONISING

SHIPPING -

A CHALLENGE

FOR ALL

98


Kitack Lim, Secretary General of

the International Maritime

Organization (IMO)

Addressing the complexities of the

climate change challenge requires

a comprehensive and collaborative

approach. No stakeholder can work on

this alone. The global community has

recognised this in the Paris Agreement

and in the United Nations Sustainable

Development Goal (SDG) 13. These

bring nations into a common cause to

undertake ambitious efforts to combat

climate change and adapt to and mitigate

its effects, with enhanced support to assist

developing countries to do so.

As part of the United Nations system,

the International Maritime Organization

(IMO) is fully committed to limiting and

reducing greenhouse gas emissions

from shipping. The approach taken by

the IMO’s membership and its other

stakeholders is based on building

consensus and collaboration. These have

been key to driving change at IMO.

It is not possible to work towards

decarbonising the maritime sector by

working in silos. Shipping and the maritime

sector are an essential component of world

economic growth, with an impact across

many stakeholders. Billions of people rely

on shipping as the most cost effective and

fuel efficient way to transport the essential

raw materials, commodities and consumer

goods that industries and communities

need and want.

So when we consider IMO’s responsibility

to make sure that shipping has a minimal

negative impact on the ocean and

atmospheric environment, it is clear that

we need to work closely with government,

business, city ports, local authorities, other

agencies, civil society groups and the

communities that shipping serves.

At a global level, IMO’s decision making

process is characterised by pragmatic,

realistic, workable, cost effective and well

balanced decisions, in the formulation of

which the views of all nations are taken

duly into account. IMO has already adopted

mandatory energy efficiency measures to

reduce greenhouse gas emissions from

ships, applicable to more than 96 per cent

of the world’s merchant fleet by tonnage.

The mandatory Energy Efficiency Design

Index requires new ships to be built to

be more energy efficient. And older ships

must undergo a process to produce a Ship

Energy Efficiency Management Plan.

To support the implementation of these

measures, at regional and national level,

IMO promotes collaboration through

its Integrated Technical Cooperation

Programme (ITCP), which serves to assist

governments that lack the technical

knowledge and resources needed to operate

a shipping industry successfully. The ITCP

includes innovative major programmes

specifically related to energy efficiency.

The Global Maritime Energy Efficiency

Partnerships Project (GloMEEP) was

launched in 2015 in collaboration with the

Global Environment Facility and the United

Nations Development Programme. Under

GloMEEP, 10 developing countries have

committed to taking a lead role in creating

the national policies, strategies and the

legal framework to effectively implement

TRANSPORT

Consensus and collaboration have

been key to driving change at IMO.

99


TRANSPORT

IMO member states have pledged

to produce a comprehensive strategy

for reducing greenhouse gas emissions

from ships.

IMO’s energy efficiency regulations. So

far more than 400 people have been

trained in national, regional and global

workshops, and information tools and

training packages have been developed to

further support developing countries in the

implementation of IMO’s energy efficiency

provisions.

A second global project, funded by

the European Union, has established

a network of five Maritime Technology

Cooperation Centres (MTCCs) in Africa,

Asia, the Caribbean, Latin America and

the Pacific. Through collaboration and

outreach activities at regional level,

the MTCCs will help countries develop

national maritime energy efficiency

policies and measures, promote the

uptake of low carbon technologies and

operations in maritime transport and

establish voluntary pilot data collection

and reporting systems.

IMO is also promoting collaboration

with the private sector. The Global Industry

Alliance to Support Low Carbon Shipping,

known as the GIA, has been launched in

2017 under the auspices of the GloMEEP

project to bring like minded private

sector players together with a common

objective of making the shipping industry

greener. So far, 16 maritime private

industry champions (including shipowners

and operators, classification societies,

engine and technology manufacturers

and suppliers, big data providers, oil

companies and ports) have signed up. The

GIA will collectively identify and develop

solutions that can support overcoming

barriers to the uptake of energy efficiency

technologies and operational measures in

the shipping sector.

These barriers have been identified

as technical, financial, institutional and

human element related. Overcoming

them requires novel approaches, blue sky

thinking, and working together through a

collaborative and common approach. All of

this collaboration, from capacity building

to research projects to innovation, will

support IMO’s regulatory work to reduce

shipping’s negative impact on the ocean

and the atmospheric environment.

Steps are already being taken towards

considering further measures to address

greenhouse gas emissions from ships. The

mandatory collection and reporting of fuel

oil consumption data for ships of 5,000

gross tonnage and above will begin from

2019. This will provide a firm statistical basis

for an objective, transparent and inclusive

policy debate in IMO’s Marine Environment

Protection Committee (MEPC), the forum

where all environmental matters relating to

shipping are discussed.

IMO member states have pledged to

produce a comprehensive strategy for

reducing greenhouse gas emissions

from ships. An initial strategy is set to be

adopted in 2018, to be revised by 2023,

benefiting from statistical information from

mandatory reporting. Collaboration and

consensus will push forward this initial

greenhouse gas strategy.

The momentum driving this process is

evidenced by the extensive participation

and commitment shown in the meetings

of the Intersessional Working Group on

Reduction of GHG Emissions from Ships.

The first meeting in June reported to the

MEPC 71 session in July 2017; the second

in October worked to develop the initial

strategy; and the third meeting in spring

2018 is expected to come up with the draft

initial strategy, for adoption by the MEPC

72 meeting in April.

I am confident that IMO Member States

will deliver on this. And I believe that by

continuing to promote collaboration at all

levels we can be positive about not just

agreeing a strategy, but acting on it too.

100


ACCELERATING

THE TRANSITION

TO ELECTRIC

VEHICLES

TRANSPORT

Credit: Bloomberg

Global passenger electric

vehicle sales will hit about

1 million in 2017.

101


TRANSPORT

Colin McKerracher, Head of

Advanced Transport at Bloomberg

New Energy Finance

The global automotive industry

is entering a period of profound

transformation. The combination

of supportive policy and improvements

in lithium-ion battery technology have

enabled electric vehicles to gain a toehold

in a market that has been dominated by

the internal combustion engine for over a

hundred years. Meanwhile, tightening fuel

eff iciency regulations and urban air quality

concerns are putting increased pressure on

automakers to improve the rest of their fleet.

Global passenger electric vehicle sales

will hit about 1 million in 2017, up from one

hundred thousand just a few years earlier.

There are now almost three million electric

vehicles on the world’s roads. But before

we get too excited about this progress, it is

worth bearing in mind that the global fleet

of all cars is around 1 billion. Reductions

in emissions from road transport will be

a key part of meeting climate targets, but

an average vehicle is on the road for 12-15

years, creating significant lock-in to our

current transport system. So, just how far

can EV adoption go and what would this

mean for energy and automotive markets?

Lithium-ion battery prices per kilowatthour

dropped 74 per cent between 2010

and 2016 and their energy density is

improving by around 5 per cent per year.

This puts electric vehicles on a path

towards being fully cost-competitive with

their internal combustion counterparts,

a point that will be reached in diff erent

countries from 2025 onwards. In response,

automakers around the world are ramping

up the number of electric models they

off er – there are 150 diff erent plug-in

hybrids and pure electrics available today,

and this is set to rise to over 240 by 2021.

Groups like VW, Daimler, Volvo and Nissan

have made aggressive plans to electrify

their vehicles over the next 10 years.

China is pushing the hardest here.

China’s 2025 auto plan calls for internal

combustion sales to flatline and EVs to

make up all vehicle sales growth over the

next seven years. Its recently introduced

‘new energy vehicle’ quota requires

automakers to sell a set percentage of

electric or fuel cell vehicles, which it will

ratchet up over time. China is doing this

not just to reduce oil imports and improve

urban air quality, but also for industrial

policy reasons. As the vehicle mix shifts,

China wants to position its domestic

automakers to leapfrog established

international brands. A thriving, globally

competitive auto sector is a major source

of employment, investment and innovation.

Nobody wants to see their national

champions left behind.

A view to 2040

Each year at Bloomberg New Energy

Finance, we publish a comprehensive

global Electric Vehicle Outlook, in which

we look at all the technology, policy and

economics factors that could influence

EV adoption over the next two decades.

In this year’s report, we concluded that 54

per cent of the world’s vehicle sales would

be electric by 2040, with Europe, China

and the U.S. the largest EV markets. Some

countries will get there much sooner. In

Norway – the leader on EV adoption –

sales are already above 40 per cent and

the government is aiming fully to phase

out traditional vehicle sales by 2025.

Our forecast would mean 530 million

electric vehicles on the road in 2040, or

around a third of the total fleet. This is a

dramatic change from today and would

require significant scale-up in the battery

manufacturing supply chain, in materials,

and in charging infrastructure. This many

EVs would displace around eight million

barrels per day of oil demand, and would

increase global electricity demand by

around 5 per cent. The power system can

Credit: Bloomberg

accommodate the additional demand, but

smart-charging systems will be needed

to ensure vehicles are not contributing to

demand during peak periods. CO 2

emissions

would also fall. Even with power generation

emissions in diff erent countries factored

in, EVs still have a lower CO 2

footprint per

kilometre driven and this gap is set to widen

further over time as the amount of renewable

power generation grows.

So what holds back further adoption?

Charging infrastructure is still a major

barrier, particularly in urban areas with

limited off -street parking. Low average

vehicle purchase prices and power grid

issues in emerging economies also play a

role. Supply constraints for key materials

like cobalt, lithium and graphite could still

slow down the declines in battery cost

seen in recent years. Governments will

need to recoup some of the lost revenues

102


TRANSPORT

from fuel taxes levied on gasoline and

diesel, while consumers will need to adjust

how they refuel their vehicles.

Accelerating the transition

Of course, there are several factors that

could cause things to move much faster.

Our analysis is based mostly on economics

and current technology trajectories, but

a step-change in battery density or an

improvement in charging technology

options would hasten the transition.

National governments in the U.K., France,

the Netherlands, Norway and even India

have indicated that they want to phase

out internal combustion engine sales

altogether. While these targets typically

lack specific measures, they show just how

quickly the landscape is changing. In the

world’s largest cities, urban dwellers are

becoming increasingly concerned with

poor air quality and could force municipal

governments to move even faster than their

national counterparts. Policy has a big role

to play here.

On top of all this, new mobility business

models such as ride hailing and car

sharing are gaining traction around the

world. Some customers are opting to

buy kilometres of mobility rather than a

vehicle of their own. Autonomous vehicles

are set to debut in the 2020s and would

accelerate this trend. At high utilisation

rates, electric vehicles have much lower

costs per kilometre and could be ideal for

these types of applications.

The automotive sector will change more

in the next 10 years than it has in the last

50. We are heading towards a cleaner

transport system, with benefits for the

environment and for consumers around

the world – but much work remains to be

done.

New mobility business models

such as ride hailing and car sharing are

gaining traction around the world.

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TRANSPORT

A CONTINUED

COMMITMENT

TO GREEN

INNOVATION

The automobile industry has a

storied tradition of adapting to

an evolving market and new

consumer tastes. Today, changes in

the global environment are causing a

transformation in the way we think about

cars and individual mobility. The BMW

Group has long been an industry leader in

implementing green technologies, and is

continuing to move the industry towards a

greener future. Climate change and global

warming require immediate action by the

private sector to decarbonise and electrify

production. The BMW Group already offers

a wide variety of future mobility concepts

and has a diverse selection of electrified

vehicles in its product portfolio, such as

the BMW i and iPerformance series.

But the BMW Group’s climate strategy

goes beyond just finished cars. Its vision

for the future of individual mobility is

spearheaded by an ambitious concept

called ACES – Autonomous, Connected,

Electrified, and Shared. This concept is

already being implemented in the entire

life cycle of BMW vehicles – from design

104

to production to ownership to recycling.

Rather than just creating a sustainable

end product, the BMW Group strives to

be responsible at each and every step.

Most importantly, the BMW Group is living

proof that responsibility does not have

to negatively impact profitability. On the

contrary, the BMW Group has discovered

the potential to reduce energy costs while

increasing production and boosting profits.

One important element of BMW’s

corporate strategy has always been

to manage its energy consumption to

promote sustainability, while at the same

time enhancing profitability. Now, BMW

Energy Services, established in 2015 has

stepped up to become a game changer

in the energy business with its innovative

energy solutions and new digital business

models. For example, through the joint

venture Digital Energy Solutions that was

founded in 2015 together with Viessmann,

BMW Energy Services has established

service offers that are based on BMW

Group competencies and technologies in

the area of e-mobility, connected charging

infrastructure, battery storage systems and

energy management.

A further example for energy

management innovations that comprises

energy and mobility is the BMW

Speicherfarm Leipzig, a large scale battery

storage farm built on the premises of the

BMW Group plant in Leipzig. The first of its

kind, it consists of up to 700 BMW i3 2nd

life and new batteries that are intelligently

warehoused as spare parts with a total

power equaling 100,000 km in electric

range. This battery storage farm will

help to optimise the plant’s local energy


consumption regarding CO2 and cost but

will also offer flexibility to the electric grid

via demand side management from 2018

onwards.

For over 100 years now, the BMW Group

has learned to lead by example. BMW

tops the industry when it comes to green

technology and CO2 emissions reduction.

The Dow Jones Sustainability Index once

again featured the BMW Group at the top

of its rankings and as the best automaker

of 2016. BMW plans on continuing its

dedication to clean production and

cleaner vehicles.

One of BMW’s long term visions is to

increase the share of alternative energy

used in production to 100 per cent in the

coming years. Currently, about 51 per cent

of energy needs are through renewable

energy, with power coming from sources

like a biogas plant in Rosslyn, South Africa,

and a brand new photovoltaic facility at

our plant in Shenyang, China.

To date, the BMW Group has already

sold more than 100,000 electric vehicles

and plug-in hybrids and now aims to

achieve this same figure in 2017 alone.

In this way, the BMW Group is helping

to reduce greenhouse-gas emissions

and improve air quality. The BMW Group

reduced CO2 emissions of its newly

sold vehicles in Europe by around 41

per cent between 1995 and 2016. Our

European vehicle fleet (EU-28) had an

average fuel consumption of 4.6 l of

diesel /100 km or 5.6 l of petrol per 100

km and average CO2 emissions of 124 g

/km (internal calculation). Our goal is to

reduce CO2 emissions by at least 50 per

cent between 1995 and 2020. Catering to

our new urban lifestyles is another key

to transforming the future. DriveNow and

ReachNow, car-sharing services owned

by the BMW Group, offer per-minute car

rental in cities.

The BMW Group is helping foster an

important shift in individual mobility –

away from private ownership of vehicles

with combustion engines toward shared,

electric, and digitalised solutions. As the

climate changes, so does our industry.

At the BMW Group, we proudly take

on the challenge of innovating in a

sustainable way. As we decarbonise

the private sector and transform our

economy for the future, the BMW Group

will continue to excel at delivering quality

automobiles and the sheer driving

pleasure it has built its reputation on.

The BMW Speicherfarm Leipzig is a large scale battery storage farm built on

the premises of the BMW Group plant in Leipzig, Germany.

Based on our own BMW Energy

Cloud, we provide holistic energy

solutions to our customers that

encompass mobility and energy.

BMW Energy Services thereby acts

as an enabler of the BMW Group’s

electrification strategy.

Dr Joachim Kolling, Head of BMW Energy Services

TRANSPORT

105


CITIES

The Capibaribe Park project, in Recife, Brazil, will connect over 94,000 sq

metres of green space, walkways and bike paths along the Capibaribe River.

RESILIENT CITIES:

GOOD FOR THE

CLIMATE AND

GOOD FOR

BUSINESS

106


Investing in

sustainable, resilient

communities pays off,

but unilateral action

is not enough. We

need to build bridges

between the public

and private sectors

to design, fund, and

implement resilient

city solutions.

One of the key messages

from business and local

government leaders speaking

at the Resilient Cities 2017

congress in Bonn.

Gino Van Begin, Secretary General

of ICLEI – Local Governments for

Sustainability

At the Resilient Cities 2017 congress in

Bonn earlier this year, the discussions

focused on how to turn local climate

adaptation and resilience plans into reality

– a reflection of the current state of play in

the field. Over the past 10 years, ICLEI (www.

iclei.org) has seen a steady increase in the

number of local governments assessing their

climate risks, developing local strategies, and

more recently, seeking to implement their

plans through integrated sustainable and

resilient actions.

Take Recife, Brazil, which has developed

the ‘Recife 500 Years, the City we Want’

master plan for comprehensive sustainable

urban development. The plan includes

the Capibaribe Park project, which is also

part of the ICLEI Transformative Actions

Program. The park will connect over 94,000

sq metres of green space, walkways and

bike paths along the Capibaribe River,

providing recreational and commercial

benefits. By reducing motorised transport

and restoring ecosystems, the project will

decrease urban emissions by an estimated

8,000 tons of CO 2

per year while mitigating

the impact of climate hazards including

heat waves and flooding.

Recife is not alone. Over 1,510 adaptation

actions by cities, towns, and regions have

been reported to the carbonn® Climate

Registry (cCR), a global reporting platform

with over 1,000 registered entities. In

a subsample of 267 actions reported

by 132 subnational governments in 35

countries, at least 77 per cent were aligned

with national-level goals and the Paris

Agreement, and over half addressed both

mitigation and adaptation.

When implementing these actions,

however, local governments often face

institutional barriers from financial and

governance systems whose regulations

and cultures are themselves not adapted

to enable resilient urban development. The

Capibaribe Park project budget is US$94

million, part of the US$620 million needed

for the Recife 500 Years master plan.

Municipal funding is not enough. Urgent

support is needed from public and private

partners to help subnational governments

finance and implement integrated climate

action in innovative ways.

What does this look like? One aspect

is reforming the global financial sector

and reducing the perception that local

adaptation investments are high risk and

low reward. In 2014, a mere 7 per cent of

global climate finance went towards climate

adaptation, and most was inaccessible to

subnational governments. More favourable

legislative and regulatory conditions are

needed along with appropriate financial

intermediaries at the subnational level.

Guidance is also needed for project

preparation and governance. ICLEI and

other members of the Cities Climate

Finance Leadership Alliance are building

capacity in these areas to help local

governments develop bankable projects

and bolster public and investor confidence.

Another aspect is cultivating

relationships with private sector partners

built on mutual interest and trust.

Copenhagen, Denmark and Oslo, Norway

are illustrative cases. Both cities are

working with insurers to pool resources

and expertise – such as in risk modelling

and asset pricing – in order to reduce the

risk from extreme weather and maintain

affordable insurance rates. Speaking

at the first-ever Insuring Resilient and

Sustainable Cities Summit at Resilient

Cities 2017, Oslo noted that after a period

of trust building, the municipality and

CITIES

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CITIES

insurance partners found a way to share

information for their mutual benefit. When

local officials are better informed of their

risk, they can take preventative measures

that reduce damage and the need for

insurance payouts.

As risk managers, risk carriers

and major institutional investors, the

insurance sector is a natural partner to

help cities assess and avoid risks, and

invest in resilient infrastructure. Yet, as the

previous example shows, even here work

is needed to build effective public-private

partnerships. ICLEI has teamed up with

UNEP Principles of Sustainable Insurance

initiative (UNEP PSI) in the largest

collaboration between the insurance

industry and cities to drive a long-term

global action agenda. Our goals for 2018,

captured in the ‘Bonn Ambition’, are to

create ‘insurance development goals

for cities’, develop city-level sustainable

insurance roadmaps, and organise

dialogues between insurance industry

CEOs and mayors, including at the 2018

ICLEI World Congress. Early endorsers of

the Bonn Ambition include Munich Re,

the G7 Climate Risk Insurance Initiative

(InsuResilience), Patricia Espinosa

(UNFCCC) and the Mayors of Bonn,

Germany; Iloilo City, Philippines; and

Honiara City, Solomon Islands.

Defining the real costs and long-term

benefits of climate resilience is important

to foster public-private partnerships.

According to Swiss Re, global economic

Mayors meet to discuss the local implementation of the Paris Agreement and 2030

Sustainable Development Agenda during Resilient Cities 2017 in Bonn, Germany

losses from disasters in 2016 totalled

US$175 billion. Cities with resilient urban

infrastructure systems and services

suffer less damage and fewer interrupted

business days from natural disasters.

Low carbon and resilient solutions like

green buildings deliver efficiency gains

while contributing to long-term adaptive

capacity. This may be why Puerto Rico

is interested to ‘build back better’ after

Hurricane Maria with renewable energy

that reduces vulnerability to power outages.

Considering that 60 per cent of urban areas

in 2030 have yet to be built, there is a huge

opportunity for all cities to choose similar

resilient development pathways.

Resilience gains are not all about

avoided costs. Adaptation projects also

generate direct and indirect revenue.

Copyright: ICLEI 2017

From the sample of adaptation actions

mentioned previously, the number

one co-benefit was ‘improved urban

livelihoods’. Fifth was job and business

creation, followed by energy security

and supporting a green urban economy.

Increased property values and supply

chain security were also reported.

The UNFCCC COP23 under the Fiji

Presidency, hosted in Bonn’s Rheinaue

park – a beautiful example of ecosystembased

adaptation with far-reaching socioeconomic

benefits – is the perfect venue

to discuss resilient, low carbon solutions.

ICLEI is engaged in a full programme

showcasing climate action by cities, regions

and small island states that contribute to

nationally determined contributions and the

global ambitions of the Paris Agreement.

ICLEI AT COP 23

Summit | Dialogues | Pavilion

ICLEI is organising the Climate

Summit of Local and Regional

Leaders. The City of Bonn and

the State of North Rhine-

Westphalia are co-hosts.

We invite you to join us at the

Cities & Regions Pavilion and

look forward to partnering with

leaders from all sectors toward

the realisation of a low carbon,

climate resilient urban future.

Follow the action at

citiesandregions.org

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DELIVERING

CITIES

CONCRETE

CLIMATE

ACTION IN

CITIES

Bosco Verticale in the Porta Nuova district of Milan, Italy

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CITIES

Mark Watts,

Executive Director of C40 Cities

Shanghai skyline

The shift towards a zero carbon

economy is now irreversible and

the lives of all the people on our

wonderful planet are going to be improved

as a result. That’s not to take progress for

granted – we are very definitely at the

mission-critical stage of needing to ramp

up action to prevent run-away climate

change. Global emissions really do need

to peak by 2020, and we are nowhere near

on track right now. The fact that the federal

government in the United States is not

going to be with us for the next three years

is undoubtedly a huge setback. But I am

confident we are going to get there, not least

because non-state actors have stepped

up to take leadership, and in particular the

mayors of the big cities that C40 represents.

At the C40 Mayors Summit in Mexico City

in December 2016 we launched Deadline

2020, the first significant route map for

achieving the Paris Agreement, outlining

the pace, scale and prioritisation of action

needed by C40 member cities over the

We need to ‘bend the curve’ of

the emissions graph so that instead of

an anticipated 35 per cent increase,

emissions peak in 2020 and then start

to fall sharply.

next five years and beyond. A key finding

of the report is that while achieving the

ambition of the Paris Agreement to limit

global temperature rise to below 1.5˚C will be

incredibly tough, it is still technically possible.

But by the end of 2020 each of the 91 cities in

the C40 network will have in place a climate

action plan that is consistent with limiting

the global temperature rise to stay below the

1.5˚C threshold. If all cities globally followed

this example, then they could deliver 40 per

cent of the emissions savings needed to

achieve the Paris Agreement goals.

Importantly, Deadline 2020 shows that the

remaining global carbon budget – the total

amount of emissions humans can risk putting

in the atmosphere and still keep global

temperature rise below 1.5˚C – is about 400

gigatonnes for the rest of the 21st century. Of

this, C40 cities are allocated 22 gigatonnes.

At present, C40 cities emit 2.4 gigatonnes

per year, so if they carried on at that rate the

whole budget will be used up in less than

a decade and by 2060, C40’s 91 cities alone

will have used up the entire world’s carbon

budget for the rest of this century.

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Mayors are currently

much better placed to

deliver collective global

climate action than any

other set of political leaders.

CITIES

If C40 cities are really to lead on delivering

the Paris Agreement then we need to see a

surge in climate action in the next few years.

We need to ‘bend the curve’ of the emissions

graph so that instead of an anticipated 35

per cent increase, emissions peak in 2020

and then start to fall sharply.

Every single city needs to take radical

action to move to a new low-carbon

development path, with wealthier cities

taking 70 per cent of actions between now

and 2020; and lower income cities rapidly

shifting to a low carbon development

model so standards of living increase while

emissions go down. There is no time to

waste; indeed, in our model, 90 per cent of

all the action C40 cities need to take to put

the world on a climate-safe path needs to

have happened by 2030.

Deadline 2020 outlines what will need to

have happened in cities in order to achieve

these ambitious emissions reductions:

• By 2020, nearly all C40 cities will have

started building smart grids and energy

storage, drastically reducing energy

wastage.

• By 2025, 75 per cent of buses in C40

cities will be electric or other zero

carbon, and every part of the city will be

supported by mass transit, so we shall all

be breathing cleaner air, enjoying quieter

roads, and finding it easier to get around.

• All new development will be transitoriented

by 2030 and no mayor will be

giving planning permission for new,

sprawling suburbs that can only be

accessed by car.

• At the same time, waste pricing

mechanisms will discourage the throwaway

society.

This sounds like a huge transformation

– and it is. But delivering on the Paris

Agreement is in every city’s self-interest.

We already know from the work of the

New Climate Economy that getting onto

a low carbon development pathway will

improve living standards faster and embed

stronger and more sustained economic

growth than the high carbon alternative.

City leadership on climate change is

essential, not least because the pledges

made by presidents and prime ministers

thus far would put the world on a

path to between 2.5 and 3 degrees of

warming, even without President Trump

reneging on the US’s commitments.

That figure is well within the zone that

would spell disaster for large parts

of the world and many of the world’s

largest cities.

Even as mayors, governors and

business leaders are prepared to forge

ahead, national commitments need to

become more ambitious: if all are united

on this issue we can make change that will

resonate for generations.

The leadership of cities and mayors is

critical and it’s the mayors in office right

now who hold in their hands the power to

put the world on a low carbon path. Mayors

are currently much better placed to deliver

collective global climate action than any

other set of political leaders. They are already

convinced that we will build a much better

world if we can constrain global temperature

rise to below 1.5˚C – and they are acting

upon it.

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