CliFin: Climate Finance Series
Clifin: Climate Finance to Avoid Climategeddon
The world is probably on the brink of climate change catastrophe. Financial institutions must eventually be part of the solution rather than enablers of the problem. CliFin, or climate finance, refers to any financial service, instrument, vehicle, or regulation designed to mitigate, or adapt to, the effects of climate change.
It appears legislative bodies are finally moving to take dedicated climate change action, due in no small measure to recent research. In 2018, the Intergovernmental Panel on Climate Change (IPCC) published a special report predicting the ecological effects of human activity. In this report, the IPCC finds that ecosystems have already been altered by climatic change. If global temperature rise continues at its current rate, the planet will be 1.5ºC warmer than pre-industrial levels between 2030 and 2052 (Intergovernmental Panel on Climate Change, “Executive Summary”). With predictions like these, what can the financial world do to mitigate climate change? READ MORE…
Clifin: Asset Management and Climate Change
The coming few years will be a time of rapid change in asset management engagement in ESG climate change issues. Although many firms are adopting more progressive practices to address climate change, most of the largest groups are slow to act, despite experiencing pressure from their customers and campaigners. These firms still trail more progressive entities like Aviva Insurance, BNP Paribas, HSBC Global Asset Management and Walden Asset Management. As investment management companies with control over sizeable share holdings, the decisions of large firms like BlackRock and Vanguard are significant for future climate change developments because the carbon footprint of major corporations outstrip those of individuals. READ MORE…
Ethics Review of Green Bonds
Among climate finance instruments, green bonds have a positive future. There should be greater efforts to address concerns about the transparency and accountability of green bonds issuers and to measure the impact of this method of climate financing. READ MORE…
Clifin Case Study: The European Green Deal
This CliFin Case Study of The European Green Deal is the fourth part of SPI’s CliFin (Climate Finance) Series. The European Green Deal (EGD) was first publicised in 2019 when President of the European Commission Ursula von der Leyen committed to the goal of European climate neutrality by 2050. She called the announcement Europe’s ‘man on the moon’ moment. In December 2019, the Commission set out the EGD for the EU and its citizens, calling climate action ‘this generation’s defining task.’ A number of reports and press releases in the first months of 2020 have provided further detail on the EGD: its institutional mechanisms and the intermediate goal of 50-55% cut in emissions by 2030 (compared to 1990 levels). The EGD is by no means the first comprehensive ‘deal’ to address climate change. Columnist Thomas Friedman first used the term ‘Green New Deal’ in 2007, and the UK Green New Deal Group released its report in 2008. More recently, the plan for a Green New Deal has received significant attention in the American context. READ MORE…
Ethics Analysis: Fossil Fuel Divestment
As issues go, fossil fuel divestment is front and center for investors. If world leaders fail to enact effective environmental policies to slow down the effects of climate change, an estimated 200 million people will become climate migrants. The long-held belief that action by individuals, not corporations, is the solution to stopping climate change is proven false by the current COVID-19 pandemic. In a time when people across the world are driving less, going out less, and using less energy, the reduction of global carbon emissions is not enough to end climate change and create a sustainable future for the world.
The Green Climate Fund Lacks Procedural Justice
The Green Climate Fund’s vital role as an agent of distributive justice in the Pacific is impaired by procedural injustices.
The Pacific Islands region is home to twenty Pacific Small Island Developing States (PSIDS), all at the forefront of climate-related disasters. In 2020 alone, 71 people perished in climate disasters and economic losses from cyclones. Flooding cost the region close to US$1 billion[1]. As climate disasters become increasingly common and expensive, climate finance will be a vital resource for the Pacific Islands region to develop necessary climate adaptation and resilience measures. Climate finance in the Pacific has been funded more and more by multilateral climate funds, with the largest multilateral climate fund being the most-commonly sought after in the Pacific – the Green Climate Fund (GCF).
The GCF has been a boon to the region, labelled as a “timely saviour”[2] by PSIDS countries when the fund was established in 2010. Since being established, the GCF has invested in 29 climate adaptation and mitigation projects worth US$818 million for Small Island Developing States (SIDS) specifically[3]. However, while the GCF has broadly been an excellent source of climate funding, it comes with considerable issues unique to the Pacific Islands region. In the Pacific, the GCF has: READ MORE…
The First of Its Kind: The European Union (EU) Carbon Border Tax Levy
The EU has discovered how to police carbon emissions beyond its borders. In July 2021, the group proposed a levy officially designated as the Carbon Border Adjustment Mechanism (CBAM).[1] CBAM is part of the EU’s “Fit for 55” policy package, which aims to reduce net greenhouse gas emissions 55% below 1990 levels by 2030. This is a milestone target for achieving climate neutrality by 2050, as set forth in the 2019 European Green Deal. [2] READ MORE…