5 Ways to Mobilize Private Investment to Tackle Climate Change
One day after the momentous inauguration of the Green Climate Fund (GCF) earlier this month, World Resources Institute (WRI), Ministry of Strategy and Finance of the Republic of Korea and Korea Capital Market Institute co-hosted the Climate Finance and Private Sector: Investing in New Opportunities conference. More than 250 people—drawn from Korean and international business, finance, government and civil society communities—came to share their experience, discuss opportunities associated with climate-friendly investments, and provide insights to the GCF as it begins its operationalization process.
Photo courtesy of Shutterstock
Climate change mitigation and adaptation investment needs are urgent, significant and growing. The world will need to devote trillions of dollars into clean energy, sustainable transport and other green infrastructure to limit global temperature rise to 2 degrees C and prevent the worsening effects of climate change. Private sector investment will be critical to achieving the type of low-carbon, climate-resilient growth necessary to secure a sustainable future.
The event featured four plenary discussions in addition to keynote speeches. Each session delivered important insights about the role that the GCF can play in mobilizing private investment. Here are the main messages that event participants shared:
1. The Vision: The GCF Can Be a Bridge to a Lower-Carbon, Climate-Resilient World.
Tackling climate change will need a new growth model that focuses on quality of economic growth. Climate and economy need not be trade-offs. Addressing climate change does not have to be a story of costs and burdens, but a story of investment and inclusive growth, jobs and resilience.
There has never been such a strong business case for action. Risks are rising and climate impacts are already being felt around the world. The paradigm of the past is not only under increasing pressure, but is actually already giving way. The new paradigm—the low-carbon, resilient, high-profitability paradigm—is slowly emerging, but has not yet taken hold across the world.
The private sector has a significant role in the new paradigm, but public finance is required to catalyze massive private investment. The GCF can play a key role in establishing this new growth model and, through its Private Sector Facility, encouraging the private sector to invest in sustainable development. By engaging both the public and private sectors, the GCF can help nudge the world onto a lower-carbon, resilient development path.
2. Many Opportunities Exist, but Not All Are Being Realized.
Event attendees heard from “first mover” corporate leaders who have already invested in climate-relevant activities in order to capitalize on a business opportunity. They pointed out that the business agenda is not about climate change; if it is not related to pure economics there will be no investments.Increasingly affordable solar photovoltaics or a number of opportunities in the supply chain—lithium-ion batteries for hybrid and electric vehicles, for example—make business sense and allow “first movers” to develop a valuable competitive edge in the market.
Yet there are still several existing opportunities that businesses have not capitalized on. Energy efficiency, for example, can deliver big climate benefits while reducing costs, yet it is not happening at the scale needed. Energy efficiency is like low-hanging fruit, according to one panelist, but it is almost as if it is hanging below eye-level, so it is often overlooked.
The GCF can help overcome barriers to realizing these opportunities by helping address credit risk perceptions, providing financing and by finding ways to aggregate a number of small transactions to reduce overall transaction costs.
3. Public and Private: In Step and Synchronized
Climate change is a challenge that needs both public and private intervention. The private sector is very good at identifying opportunities, maximizing profit and managing risks. Working with the private sector allows public institutions to multiply the number of partners to work with, thus enabling scale. But the public sector must empower the private sector to invest in climate-relevant activities and products. They can do this by creating enabling environments and enacting conducive policies that encourage investment, such as renewable energy targets or energy efficiency standards. The GCF can also help address structural issues by promoting climate-friendly policies in member countries. Fossil fuel energy subsidies, for example, make it difficult for renewable energy investments to compete, and they discourage energy-efficiency investments. The GCF presents an opportunity to create a real partnership between the public and private sectors to fund low-carbon, resilient development.
This partnership should be based on clear principles on the use of public funds to prevent moral hazard, including avoiding distorting markets and preventing prolonged dependence on the GCF. Given that public resources are scarce, the GCF needs to seek “bang for buck.” A key question is, how can we minimize financial support from the GCF while maximizing investment from the private sector? Innovation has a role to play, but an appropriate balance between the new and the tried-and-true needs to be found so that the GCF can start quickly, scale up rapidly, and deliver results.
4. The GCF Must Carve Out its Own Niche.
The GCF was established at the 2010 climate negotiations in Cancun to be the premier channel for climate finance. The international community wanted a new kind of institution with a new kind of governance to address climate change challenges. But it was never meant to be the only institution in this space. The GCF is the new kid on the block – and it needs to play with others while defining its niche.
To determine the most effective role for itself, the GCF should take a hard look at existing institutions—such as the Global Environment Facility or the Climate Investment Funds—and identify what works and what does not in the context of climate finance. When asked to describe the ideal aspirations of the GCF in a few words, panelists spoke of ambition, leadership, partnerships, impact—in short, a game-changer. Establishing a clear, value-added role is the only way to ensure that the GCF becomes the game-changer it’s intended to be.
5. The GCF Can Act as a GPS for the Climate Investment Community.
There are very large pools of institutional capital, but insignificant amounts are currently going into green investments. Partly this is due to lack of familiarity on the part of fund managers. Partly it is natural inertia: It is easier to make short-term money investing in the familiar rather than investing in a long-term green project such as solar power installations in the developing world. But money must flow to climate-relevant investments if we are to contain global temperature rise.
What will this take? Speakers mentioned:
Project pipeline: There are simply not enough viable, commercially competitive, climate-relevant projects out there to fund, so project development is needed. The GCF’s Readiness Facility can help in pipeline development.
Upside: Investors have to see the benefits to them, so projects must be commercially viable. This can be especially challenging in newer or smaller markets. The GCF’s Private Sector Facility can help provide concessional financial support.
Downside: Investors may be scared off by a project’s potential risks, such as uncertain financial viability, technical performance or mid-course policy changes. The GCF’s Private Sector Facility can help absorb some of these risks by providing tailored mitigation instruments and mechanisms—many of which are already available.
Ecosystem: For any new asset class, an ecosystem of players—fund managers, credit rating agencies, and benchmark indices—is needed. This does not yet exist for green infrastructure. With its presence and some early successes, the GCF can spur the development of such an ecosystem.
Becoming a Major Force in Climate Finance
The GCF has the potential to become a powerful force in unlocking private sector finance—if it takes the necessary steps to become a game-changer. The unique strength of the GCF should be its ability to intervene holistically and help investors navigate the complex climate finance landscape. By mobilizing and more effectively deploying climate finance—from both public and private sectors—the GCF can play a pivotal role in helping the world mitigate and adapt to climate impacts.
Visit EcoWatch’s CLIMATE CHANGE page for more related news on this topic.
EcoWatch Daily Newsletter
By Arkilaus Kladit
My name is Arkilaus Kladit. I'm from the Knasaimos-Tehit tribe in South Sorong Regency, West Papua Province, Indonesia. For decades my tribe has been fighting to protect our forests from outsiders who want to log it or clear it for palm oil. For my people, the forest is our mother and our best friend. Everything we need to survive comes from the forest: food, medicines, building materials, and there are many sacred sites in the forest.
Map of the Knasaimos traditional lands.
- New Player Begins Clearing Rainforest for World's Largest Palm Oil ... ›
- Indonesia Forest-Clearing Ban Criticized as 'Government Propaganda' ›
- Forest Loss in Papua New Guinea Increases Domestic Violence ... ›
By Farah Aqel
Overthinkers are people who are buried in their own obsessive thoughts. Imagine being in a large maze where each turn leads into an even deeper and knottier tangle of catastrophic, distressing events — that is what it feels like to them when they think about the issues that confront them.
Ruminating<p>According to the late Susan Nolen-Hoeksema, a professor of psychology at Yale University, <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5796420/" target="_blank">ruminating</a> involves replaying a problem over and over in your mind. We ruminate by obsessing over our thoughts and thinking repetitively about various aspects of a past situation.</p><p>It usually involves regret, self-loathing and self-blaming. Rumination is associated with the development of depression, anxiety and eating disorders. </p><p>People prone to such patterns of thought may, for example, overanalyze every single detail of a relationship that breaks up. They often blame themselves for what has happened and are overcome with regret, with typical thoughts being: </p><p>- I should have been more patient and more supportive. </p><p>- I have lost the most perfect partner ever. </p><p>- No one will love me again.</p>
Worrying<p>Worrying is wanting to predict the future. It involves negative thoughts about things that might and might not happen.</p><p>- They'll not like me in the interview; they'll not give me the job. </p><p>- I haven't heard back from other employers. How long will I be unemployed?</p><p>These thoughts are energy-draining and distressing. They could happen to anyone under stress. But when you reach the point where your thoughts and worrying are preventing you from doing what you want to do — from living your life to the fullest — then you should take action.</p>
Catch Yourself Overthinking<p>Reuben Berger, a psychotherapist at the university hospital in the western German city of Bonn, recommends several practical steps that you could employ in your daily routine when you catch yourself worrying or ruminating.</p><p>One effective remedy, says Berger, is the <a href="https://www.uofmhealth.org/health-library/uf9938" target="_blank">thought-stopping technique.</a></p><p>"When the negative thoughts come or ruminations start, you say to yourself: 'Stop!,'" he says, adding that it is more effective when you actually say the word out loud.</p><p>He even recommends having a rubber band around your wrist to ping against yourself while saying the word. Adding a visual component by imagining a stop sign also makes the technique more powerful, he says.</p><p>The main idea here is conditioning yourself to stop the loop of worrying (making future predictions) or rumination (obsessing over past events).</p><p>Berger says the technique could take up to two weeks to take effect and that it needs to be practiced every day. "Consistency is very important," he says. </p>
Thoughts Are Just Thoughts<p>Another way of dealing with negative thoughts often used in modern therapy is realizing that thoughts aren't facts, says Berger.</p><p>He says it is important when we think something to ask: Is that real? Did that really happen? What is the worst thing that could happen?</p><p>Flight anxiety is one example where untrue thoughts are accepted as facts. Although air travel is the safest way to get around, people suffering from fear of flying accept their thoughts and fears as reality, then act upon them by refusing to fly.</p>
Mindfulness<p>Berger also recommends the use of mindfulness techniques, in which attention is paid to experiences in the moment without judging them, as a way of reducing worrying.</p><p>"Mindfulness helps you to distance yourself from your thoughts and to be more present in the moment," he says.</p><p><a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3432145/#R2" target="_blank">Several studies</a> have shown that mindfulness has a positive impact on reducing stress-related behaviors such as rumination and worrying, as focusing on the moment makes anxiety about other problems impossible.</p><p>Mindfulness can be practiced during routine activities by paying attention to your body and your surroundings. For instance, when you leave for work in the morning, you can focus on sensing the breeze, listen attentively to birds, feel the gravel under your feet and monitor your breath. </p>
Trick Your Brain Into Happiness<p>People plagued by obsessive thoughts do not always choose healthy ways like mindfulness to distract from them, however.</p><p> Dr. Edward Selby, a psychologist at Florida state university, has shown in a study that people try to avoid rumination by engaging in a range of uncontrolled behaviors, such as binge eating and substance abuse.</p><p>But he says that a much better way to overcome such distress is by distraction and shifting attention away from problems that are obsessing us.</p><p>There are many activities that can be used to distract from rumination, he says, and people should choose the one that works best for them. Here are some examples:</p><p>- Listen to music</p><p>- Read a book</p><p>- Take a hot shower</p><p>- Dance or exercise </p><p>- Talk to a friend (not about the problem)</p><p>- Watch a movie</p><p>- Mindfulness meditation</p>
Changing the Perception of Events<p>The way people perceive a situation largely influences their emotions and behavior. It is not the situation itself that determines how they feel, but rather the way they interpret it.</p><p>Reframing negative thoughts can lead to positive emotions and, subsequently, healthier behaviors — including a reduction in damaging overthinking and worrying.</p><p>Cognitive behavioral therapy (CBT) is currently a gold standard in psychotherapy. CBT aims to change the way people think and act. It largely involves challenging unhelpful beliefs or attitudes such as overgeneralization — thinking "I always fail at public speaking" when you have had one bad experience in front of an audience, for example — or "catastrophization," i.e., imagining the worst possible outcome to a situation. </p><p>A psychotherapist can teach people how to implement such thought-changing techniques into their lives. Techniques vary depending on their issues and goals.</p>
Solutions Are at Hand<p>Try to find ways of avoiding worrying, rumination and overthinking that make you feel most comfortable.</p><p>Incorporating any routine in your life when you're stressed isn't an easy task, but you can do it! If you feel overwhelmed, you can always seek professional help. </p><p><em>If you are suffering from serious emotional strain or suicidal thoughts, do not hesitate to seek professional help. You can find information on where to find such help, no matter where you live in the world, <a href="https://www.befrienders.org/" target="_blank">at this website.</a></em></p>
- Should 'Eco-Anxiety' Be Classified as a Mental Illness? - EcoWatch ›
- Online Therapy Is Showing How to Expand Mental Health Services ... ›
- How to Stay Healthy at Home During the Coronavirus Lockdown ... ›
Researchers at the Department of Energy's Argonne National Laboratory have discovered a cheap, efficient way to convert carbon dioxide into liquid fuel, potentially reducing the amount of new carbon dioxide pumped into the atmosphere.
- Jet Fuel From Sugarcane? It's No Flight of Fancy - EcoWatch ›
- What Role Can Biofuels Play in Reducing Greenhouse Gas ... ›
A 4,000-year-old ice shelf in the Canadian Arctic has collapsed into the sea, leaving Canada without any fully intact ice shelves, Reuters reported. The Milne Ice Shelf lost more than 40 percent of its area in just two days at the end of July, said researchers who monitored its collapse.
- Stunning Photos Show Huge Crack in Antarctic Ice Shelf - EcoWatch ›
- Manhattan-Sized Iceberg Breaks off Antarctica - EcoWatch ›
- Where Has All the Ice Gone? - EcoWatch ›
The coronavirus cases surging around the U.S. are often carried by kids, raising fears that the reopening of schools will be delayed and calling into question the wisdom of school districts that have reopened already.
- How Other Countries Reopened Schools During the Pandemic ... ›
- Until Teachers Feel Safe, Widespread In-Person K-12 Schooling ... ›
- Teens and Tweens Are Fastest COVID-19 Spreaders, New Study ... ›
- Young Children May Have Higher Coronavirus Levels, Raising ... ›
- COVID-19: What Experts Think About Reopening Schools - EcoWatch ›
By Michael Baker, Amanda Kvalsvig and Nick Wilson
On Sunday, New Zealand marked 100 days without community transmission of COVID-19.
Deaths From COVID-19 Per Million Population<img lazy-loadable="true" src="https://assets.rebelmouse.io/eyJhbGciOiJIUzI1NiIsInR5cCI6IkpXVCJ9.eyJpbWFnZSI6Imh0dHBzOi8vYXNzZXRzLnJibC5tcy8yMzU0ODIyOS9vcmlnaW4ucG5nIiwiZXhwaXJlc19hdCI6MTY0MjkzMDc1OX0.7Yp1h1hokihlMJUurDukGmq-Y8NJB0V-07O1ukEjGt0/img.png?width=980" id="0fe6a" class="rm-shortcode" data-rm-shortcode-id="6bce85a610aee18e2f4f1c1caca7b8a0" data-rm-shortcode-name="rebelmouse-image" />
<div id="77fff" class="rm-shortcode" data-rm-shortcode-id="ce7b34f8986d3d36bee5d4d83ac0822c"><blockquote class="twitter-tweet twitter-custom-tweet" data-twitter-tweet-id="1292270210238447616" data-partner="rebelmouse"><div style="margin:1em 0">COVID-19 Update There are no new cases of COVID-19 to report in New Zealand today. It has been 100 days since t… https://t.co/Cz55ixGZUz</div> — Unite against COVID-19 (@Unite against COVID-19)<a href="https://twitter.com/covid19nz/statuses/1292270210238447616">1596936201.0</a></blockquote></div>
Getting Through the Pandemic<p>We have gained a much better understanding of COVID-19 over the past eight months. Without effective control measures, it is likely to continue to spread globally for many months to years, ultimately infecting billions and killing millions. The proportion of infected people who die appears to be <a href="https://www.medrxiv.org/content/10.1101/2020.05.03.20089854v4" target="_blank">slightly below 1%</a>.</p><p>This infection also causes serious <a href="https://www.bmj.com/content/370/bmj.m2815" target="_blank">long-term consequences</a> for some survivors. The largest uncertainties involve <a href="https://www.nature.com/articles/d41586-020-02278-5" target="_blank">immunity to this virus</a>, whether it can develop from exposure to infection or vaccines, and if it is long-lasting. The potential for treatment with antivirals and other therapeutics is also still uncertain.</p><p>This knowledge reinforces the huge benefits of sustaining elimination. We know that if New Zealand were to experience widespread COVID-19 transmission, the <a href="https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3310086/" target="_blank">impact on Māori and Pasifika populations</a> could be catastrophic.</p><p>We have previously described critical measures to get us through this period, including the use of fabric face masks, improving contact tracing with suitable digital tools, applying a science-based approach to border management, and the need for a dedicated national public health agency.</p><p>Maintaining elimination depends on adopting a highly strategic approach to risk management. This approach involves choosing an optimal mix of interventions and using resources in the most efficient way to keep the risk of COVID-19 outbreaks at a consistently low level. Several measures can contribute to this goal over the next few months, while also allowing incremental increases in international travel:</p><ul><li>resurgence planning for a border-control failure and outbreaks of various sizes, with state-of-the-art contact tracing and an upgraded alert level system</li><li>ensuring all New Zealanders own a <a href="https://www.nzma.org.nz/journal-articles/mass-masking-an-alternative-to-a-second-lockdown-in-aotearoa" target="_blank">re-useable fabric face mask</a> with their <a href="https://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=12354409" target="_blank">use built into the alert level system</a></li><li>conducting exercises and simulations to test outbreak management procedures, possibly including "mass masking days" to engage the public in the response</li><li>carefully exploring processes to allow <a href="https://blogs.otago.ac.nz/pubhealthexpert/2020/06/16/preventing-outbreaks-of-covid-19-in-nz-associated-with-air-travel-from-australia-new-modelling-study-of-alternatives-to-quarantine/" target="_blank">quarantine-free travel</a> between jurisdictions free of COVID-19, notably various Pacific Islands, Tasmania and Taiwan (which may require digital tracking of arriving travellers for the first few weeks)</li><li>planning for carefully managed inbound travel by key long-term visitor groups such as tertiary students who would generally still need managed quarantine.</li></ul>
Building Back Better<p>New Zealand cannot change the reality of the global COVID-19 pandemic. But it can leverage possible benefits.</p><p>We should conduct an <a href="https://blogs.otago.ac.nz/pubhealthexpert/2020/06/11/five-key-reasons-why-nz-should-have-an-official-inquiry-into-the-response-to-the-covid-19-pandemic/" target="_blank">official inquiry into the COVID-19 response</a> so we learn everything we possibly can to improve our response capacity for future events.</p><p>We also need to establish a specialized national public health agency to <a href="https://blogs.otago.ac.nz/pubhealthexpert/2017/12/20/the-havelock-north-drinking-water-inquiry-a-wake-up-call-to-rebuild-public-health-in-new-zealand/" target="_blank">manage serious threats to public health</a> and provide critical mass to <a href="https://blogs.otago.ac.nz/pubhealthexpert/2020/02/05/a-preventable-measles-epidemic-lessons-for-reforming-public-health-in-nz/" target="_blank">advance public health generally</a>. Such an agency appears to have been a key factor in the success of Taiwan, which avoided a costly lockdown entirely.</p><p>Business as usual should not be an option for the recovery phase. A recent <a href="https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12353555" target="_blank">Massey University survey</a> suggests seven out of ten New Zealanders support a green recovery approach.</p><p>New Zealand's elimination of COVID-19 has drawn attention worldwide, with a description just <a href="https://www.nejm.org/doi/full/10.1056/NEJMc2025203" target="_blank">published</a> in the New England Journal of Medicine. We support a rejuvenated World Health Organization that can provide improved global leadership for pandemic prevention and control, including greater use of an elimination approach to combat COVID-19.</p>
- U.S. Coronavirus Cases Top 2 Million as All 50 States Start ... ›
- World Tops 10 Million Coronavirus Cases, 500000 Deaths - EcoWatch ›
- New Zealand Government Wins Battle Against Coronavirus ... ›
- Pressed on Surging Covid-19 Cases and Test Shortages, Trump ... ›
- U.S. Passes 4 Million Coronavirus Cases - EcoWatch ›
- U.S. COVID-19 Death Toll Passes 130,000 Amid Surge in Cases ... ›
- U.S. Coronavirus Cases Top 2 Million as All 50 States Start ... ›