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December 4, 2015

Editor’s letter: Climate change finance

At the time this magazine goes to press the world’s leaders of about 195 countries are meeting in Paris, where the future of the planet (no hyperbole here) is at stake.

Whatever comes out from the Conference of the Parties, or COP, will shape our future indelibly.

Ahead of the COP21 (there has been an annual one since 1992) I attended a panel event in London very appropriately called Last tango in Paris and organised by Castle Debates.

Chairing the discussion was Roger Harrabin, BBC’s environmental analyst. He highlighted how carefully orchestrated the US and China have been heading, hand in hand, to Paris – with pledges made in advance to commit to carbon emissions reduction targets.

That’s an optimistic sign for Harrabin: unlike in Copenhagen COP15, the two biggest polluters are determined not to pick up the blame for any failure in COP21.

But they are not alone. Some other 150 countries have also made pledges to seriously tackle climate change, and once and for all reach a global legally binding agreement.

In the panel discussion was Paul Ekins, professor of resources and environmental policy at University College London.

He also seemed to be optimistic and said there are grounds for hope, despite optimism being "a kind of unscientific feeling against the evidence which I don’t allow myself".

By evidence he might have meant the perceived record of failures in COP meetings, particularly the one in Copenhagen six years ago. Ekins, however, challenged that perception.

But to deconstruct the convention of Copenhagen as a failure, and to support his hope for Paris, going back to contemporary history was needed.

"So we started this game after the UN Framework Convention signed in 1992, with the Kyoto protocol," he said.

As Ekins reminded the audience, Kyoto was a legally binding protocol although that didn’t prevent Canada from withdrawing, once the country realised it might not meet the commitments.

Ekins also recalled how the world was divided in two after Kyoto, according to a principle of common but differentiated responsibility: the Annex I and the Non-Annex I countries, or industrialised versus developing countries.

And here it comes the challenge Ekins offered of Copenhagen’s negative perception. Among the promising things that happened in Copenhagen was that all countries recognised they needed to make commitments, not just the Annex I countries. The division was swept away, as Ekins said, including China, who as the world biggest emitter didn’t make any sense to be within the Non-Annex I.

Yet judging by the news coming so far from Paris, the divide seems to persist: industrialised countries, whose development owes to past and current emissions, and developing countries, who claim the right to pollute in order to support their progress.

At the panel was also Celine Herweijer, PwC partner at the firm’s sustainability and climate change advisory team.

In the run-up to Paris Herweijer noticed a different attitude among the business community, from just communiques to real action in terms of taking action to cut their carbon emissions.

She brought to the discussion an important issue: climate finance. Trillions of dollars a year will be required to transition to a low carbon global economy.

"Clearly is not going to come from the public purse alone," Herweijer said. Instead public-private partnerships will flourish to deliver the scale of investment needed to grow in a sustainable fashion. As she pointed out that’s a huge opportunity, rather than a burden.

Herweijer also noted a big uptake at PwC in business seeking advice to understand the risks if climate talks fail, and the target of limiting global warming to 2 degrees Celsius by the end of the century is not achieved.

But on a more positive note, it’s encouraging to see countries going the extra mile.

Take the Faroe Islands, for example. According to NORA Region Trends, by 2030 the North Atlantic archipelago aspires to become a totally green country, sourcing its entire energy demand from renewable sources.

Yes, they are tiny and the energy needs of their 50,000 islanders cannot compare with the millions of energy-hungry Chinese – yet change is made of a myriad of little actions like this one in the Faroes.


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