Our latest NewsletterJanuary 2023
Capturing the potential of carbon markets
At the recent Abu Dhabi Sustainability Week (ADSW), UN Climate Change High-Level Champions for COP 27 and COP 28, Dr. Mahmoud Mohieldin and Her Excellency Ms. Razan Al Mubarak reinforced the importance of innovative finance tools and nature-based solutions to advance the net zero agenda.
60% of the poorest economies are currently in debt distress or at high risk of it. Many of them are already suffering the worst impacts of climate change. Financing their way to a more sustainable, secure and economically stable future is a huge challenge. Nevertheless, mobilizing climate finance provides an opportunity to sustainable, resilient and inclusive development.
Speaking at the Africa Carbon Markets Initiative (ACMI) event, Dr. Mohieldin outlined how a global market for carbon that establishes carbon credits as a legitimate source of value could be a gamechanger for countries looking to finance climate-change mitigation and adaptation initiatives.
Launched at COP 27, ACMI aims to make climate finance available for African countries, expand access to clean energy, and drive sustainable economic development.
Led by a 13-member steering committee of African leaders, chief executives and industry specialists, the initiative promises to expand the continent’s participation in voluntary carbon markets.
Its ambition is to produce 300 million African carbon credits annually by 2030 (19 times the 2020 level), unlock USD 6 billion in revenue by 2030 and over USD 120 billion by 2050.
At its inception, USD 200 million was secured in advanced market commitments from global corporations while Kenya, Gabon, Malawi, Mozambique, Togo, Nigeria, and Burundi signed up to develop carbon activation plans.
Building on this at ADSW, ACMI announced an action program aimed at accelerating Africa’s participation in the global carbon market ahead of COP 28. This includes advancing market commitments with an ambition of up to USD 1 billion for the purchase of high- integrity African credits and launching carbon activation plans for multiple countries.
Boosting the supply of credits would enable much-needed sustainable investment in sectors ranging from renewable energy and clean cookstoves to agriculture and forestry.
Currently the nascent carbon credit market faces numerous challenges to growth in many parts of Africa. These include a lack of project developers capable of operating at scale, a complex regulatory landscape, inadequate methodologies for valuing and certifying credits, and concerns about integrity.
In the words of Joseph Nganga, Vice President, Africa, for the Global Energy Alliance for People and Planet (GEAPP) “Current levels of climate finance fall short of Africa’s needs. The continent requires USD 3 trillion to implement its aspect of the Paris Agreement, yet less than USD 20 billion was provided in total to Africa between 2016 and 2019. Voluntary carbon markets can play a crucial role in filling this finance gap, but its potential is far from being realised. The Africa Carbon Markets Initiative can help us achieve a more rapid and equitable energy transition for Africa, a transition that supports lives and livelihoods with clean, reliable energy while countering the existential threat of our time, climate change.”
ACMI was launched in collaboration with The Global Energy Alliance for People and Planet (GEAPP), Sustainable Energy for All (SEforALL), and the UN Economic Commission for Africa, with the support of the UN Climate Change High Level Champions.
Chile’s cities racing to zero
The Chilean Association of Cities (AChm) has signed an agreement with Local Governments for Sustainability, South America (ICLEI) to collaborate on initiatives which promote sustainable development and local climate action.
ICLEI is a strategic partner for cities in the Climate Champions’ Race to Zero and Race to Resilience global campaigns. Through this agreement ICLEI hopes to engage more cities in both campaigns and support them in implementing climate change mitigation and adaptation targets in line with the country’s Climate Change Framework Law (Climate Act).
Published in June 2022, Chile’s Climate Act includes a binding goal of net zero emissions by 2050 at the latest. Breaking away from traditional, centralized climate legislation, the Climate Act allows for greater participation of non-State actors (NSA) such as local and regional governments and the private sector thus creating a multi-sector response to the climate crisis.
In addition, specific NSA groups have been established to support the Climate Act including a Scientific Advisory Committee, highlighting the role of science in supporting the design and implementation of instruments created by the law and a National Council for Sustainability and Climate Change, composed of representatives from civil society, academia, and the corporate sector, among others.
AChm represents more than 340 cities in Chile and offers training and support on important issues of governance.
President of AChm and Mayor of Peñalolen, Carolina Leitao said: “ For us, alliances and networks are crucial in helping us consolidate our work supporting members and facing the climate crisis with concrete actions.
We signed this memorandum to help our members with their capacity building, better understand how to implement the Climate Law in Chile and create improved Climate Action Plans for our cities. We hope this alliance will reinforce the commitments of cities in Race to Zero and Race to Resilience and increase the connection between our local climate agenda and the global one.”
ICLEI is a global network of more than 2500 local and regional governments committed to sustainable urban development. Active in 125+ countries, it influences sustainability policy and drives local action for low emission, nature-based, equitable, resilient and circular development in line with the Paris Agreement.
Executive Director of ICLEI Argentina Ms. María Julia Reyna said: “We believe this memorandum is the first step to achieving our goal of supporting sustainable urban development which is both environmentally responsible and socially inclusive. We hope it will reinforce the position of local and regional governments as drivers of this trajectory and that our cooperation and experience inspires them to integrate sustainable mobility, energy transition, circular economy and nature-based solutions into their governmental agendas”.
New philanthropic fund offers key to unlocking climate finance
The World Economic Forum, supported by more than 45 partners recently launched the Giving to Amplify Earth Action (GAEA), a global initiative to fund and grow new and existing public, private and philanthropic partnerships (PPPPs) to help unlock the $3 trillion of financing needed each year to reach net zero, reverse nature loss and restore biodiversity by 2050.
Current funding is slow and inadequate, and a new approach is needed to get capital flowing. It’s hoped philanthropic giving through initiatives like GAEA can address this.
Klaus Schwab, Founder and Executive Chairman, World Economic Forum said: “We are at a tipping point in our efforts to put the planet back on track to meet our climate ambitions. To reach the speed and scale required to heal the Earth’s systems, we need to unlock not only private capital and government funds, but also the philanthropy sector as a truly catalytic force to achieve the necessary acceleration.”
Philanthropic financing for climate mitigation has risen in recent years, but still represents less than 2% of total philanthropic giving, estimated at $810 billion in 2021. Greater philanthropic funding for climate and nature will support, not detract from, existing social priorities. As recently noted by Rajiv Shah, President, The Rockefeller Foundation: “Climate change poses a singular threat to humanity … we must directly confront climate change, even as we redouble efforts in our traditional program areas: health, power, food, and equity.”
Over the next 12 months, supported by McKinsey Sustainability as a knowledge partner, GAEA will work with founding members to build momentum around three clear objectives: Convene leaders from the public, private and philanthropic sectors to identify and target climate and nature solutions; pilot and refine funding models that can support PPPP intervention and scale up and replicate successful approaches to new sectors, regions and actors.
COP 27 Sharm el-Sheikh Implementation Plan – call for inputs and opportunities to engage
To support the implementation of the Sharm el-Sheikh Implementation Plan and the decisions from COP 27, Parties, observers and other non-Party stakeholders are invited to submit inputs to various calls for submissions. We would like to take the opportunity to highlight some of the upcoming deadlines where the High-Level Champions are encouraged to support the effective participation of NSAs.
Sharm el-Sheikh Mitigation Ambition and Implementation Work Programme
At COP 27, the Sharm el-Sheikh Mitigation Ambition and Implementation Work Programme was operationalized. As with the global stocktake, Parties encouraged the High-Level Champions to support the effective participation of non-Party stakeholders in this work programme. As one of the initial steps, Parties, observers and other non-Party stakeholders are invited to submit by 1 February suggested topics aligned to the scope of the work programme to be discussed under the work prorgamme’s global dialogues in 2023.
In the run-up to the conclusion of the first global stocktake at COP 28, views on the approach to the consideration of the outputs component of the first global stocktake can be submitted until 15 February. Guidance on how to provide submissions is available here. Also, inputs for the third technical dialogue to be held during the 58th Subsidiary Body sessions in June in Bonn can be submitted until 6 March. Further details can be found here.
As a reminder, the full list of decisions from COP 27 can be found here and a list of all calls for submission resulting from COP 27 can be found here. Guidance on how to submit inputs are available here and all stakeholders are encouraged to take advantage of these opportunities. Watch this space for further details and information on additional opportunities to engage!
For more news from across the Race to Resilience and Race to Zero Communities, check out climatechampions.unfccc.int and Marrakech Partnership for Global Climate Action/UNFCCC.
In Case You Missed It
- A new report from the International Renewable Energy Agency (IRENA), in cooperation with UN Climate Change, underscores that long-term energy scenarios are vital for moving the global energy system to a clean, sustainable and renewable-based future. The report looks at how governments are aligning – and misaligning – their energy policy goals and climate goals by comparing their long-term energy strategies (LTES) with their scenario-based long-term low-emission development strategies (LT-LEDS). The report also suggests ways to increase coherence between energy and climate policies. It aims to complement the UN Climate Change’s synthesis report on LT-LEDS.Portugal has signed an agreement to swap Cabo Verde’s debt for investments in an environmental and climate fund that is being established by the archipelago nation off West Africa’s coast. Such “debt-for-nature” swap deals are emerging in other countries and are part of attempts to resolve a dilemma faced by world leaders on how and who will foot the bill for actions taken to reduce the impact of climate change. Cabo Verde, which is already suffering from rising sea levels and significant biodiversity loss due to increasing ocean acidity, owes around €140 million ($152m) to the Portuguese state and over €400m ($434m) to its banks and other entities. Portuguese Prime Minister Antonio Costa said that initially, €12m (~$13m) of debt repayments to the state scheduled until 2025 will be put in the fund, and ultimately “the entire amount of debt repayments” will end up there, allowing Cabo Verde to invest in energy transition and the fight against climate change. “This is a new seed that we sow in our future cooperation. Climate change is a challenge that takes place on a global scale and no country will be (environmentally) sustainable if all countries are not sustainable,” Costa said during a state visit to Cabo Verde.
- French bank BNP Paribas has pledged to reduce the money it has outstanding with the oil extraction and production industries to less than one billion euros ($1.1 billion) by 2030, an 80% decline from its current balance of five billion euros. The lender said it stopped financing oil projects back in 2016, but this latest commitment will accelerate the pace at which it reduces outstanding financing for oil extraction and production as part of its efforts to curb carbon emission and meet climate goals.
- NATO has hosted its first Industry Symposium on Climate Change and Capabilities, which brought together over 150 representatives from NATO Allies and industry. The participants discussed how NATO’s ambitions on climate change and security can be taken into account in the development of new capabilities. Among the issues discussed was the development of sustainable fuels for capabilities in the air, land, and maritime domains.
- Businessman Bill Gates has invested in an Australian climate technology start-up that plans to reduce the methane emissions of cow burps. Perth-based start-up Rumin8 is working on a dietary supplement – synthetically replicated from red seaweed – which stops the creation of the gas. It announced in a statement that it had raised $12m in a funding round led by Breakthrough Energy Ventures, which Mr Gates founded in 2015. Methane is the most common greenhouse gas after carbon dioxide. Livestock such as cows, goats and deer produce methane when their stomachs are breaking down hard fibres like grass for digestion. University studies have shown that feeding cows seaweed could significantly cut their methane emissions. The investment firm is also backed by Amazon chief executive Jeff Bezos, and Chinese entrepreneur and Alibaba co-founder Jack Ma.
- The OPEC Fund for International Development is providing a US$120 million loan to Panama to support the country’s climate action, adaptation, resilience and mitigation policies. The “Panama Support Programme for the National Climate Change Policy” aims to mitigate, contain and reverse the effects of climate change, helping Panama to achieve its long-term climate change commitments aligned with the Paris Agreement. The OPEC Fund is partnering in the project with CAF – Development Bank of Latin America, which is supporting the programme with an additional US$320 million sovereign loan. While Panama is considered a carbon negative country with almost no contributions to global emissions, it is highly vulnerable to the impacts of climate change. Natural disasters and extreme weather events including floods, droughts, tropical cyclones, tsunamis and recurring tropical climate patterns El Niño-La Niña have caused significant losses in recent years. In response, Panama aims to accelerate the transition towards inclusive, sustainable, low carbon and climate resilient development.
Keeping up with the Champions
Dr. Mahmoud Mohieldin recently participated in the Annual Regional Management Meeting of the Regional Office for the Near East and North Africa of The Food and Agriculture Organization (FAO). During his keynote address “From COP27-COP28: Implementing climate action in agriculture and food systems”, Dr. Mohieldin highlighted the importance of the Sharm-El-Sheikh Adaptation Agenda – the first global agenda to accelerate adaptation action and finance, launched at COP 27 by the COP27 Presidency and the High Level Climate Champions.
He outlined four outcomes of the Agenda relating to agriculture and food systems to be attained by 2030. These include: a 17% increase in climate resilient, sustainable agriculture yields and a reduction of farm level GHG emissions by 21%; halving the share of food production lost and per capita food waste (relative to 2019); healthy alternative proteins to capture 15% of the global meat and seafood market and the global consumption of fruits, vegetables, seeds, nuts and legumes to increases 1.5 times.
Mark your calendar
- Science Sessions for Arctic Frontiers 2023: 30 January – 2 February
- Global Ocean Biodiversity Initiative Symposium 2023: 1-2 February
- UN General Assembly Briefing on Science-Based Evidence in Support of Sustainable Solutions: 7 February
- 2nd WASAG International Forum on Water Scarcity in Agriculture, 7-10 February
- Fifth International Marine Protected Areas Congress (IMPAC5), 3-9 February
- World Government Summit 13 -15 February
- World Ocean Summit & Expo 2023, 27 February – 1 March
- One Forest Summit 1-2 March
- Commission on the Status of Women 6-17 March
- Monaco Blue Initiative 19-20 March
- UN 2023 Water Conference 22-24 March
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