The United Nations’ newly approved Green Climate Fund won’t get near its planned $100bn (€78.2bn) annual target in climate change investment, says a top climate change official at the World Bank.
“There won’t be $100bn in it, I wish there would but there won’t be,” said the World Bank’s Special Envoy on Climate Change, Andrew Steer. Speaking at the Investor Summit on Climate Risk in New York, he said: “We’re expecting $50bn of clean and climate investments coming out of that.”
The fund, the flagship climate investment vehicle agreed at the Durban talks last month and dubbed the “main global fund for climate change finance”, is supposed to channel cash for climate change mitigation and adaptation from developed economies to developing nations. RI coverage
Steer, who oversees the existing $6.5bn Climate Investment Funds initiative and who is a key figure in helping to mobilize climate financing, told delegates that the design of the new UN fund was key. “We don’t really know what it’s going to look like yet,” he said. It was a window of opportunity for the private sector and it was vital, he said, that its designers get the best possible advice from investors.
Steer also called for more green bonds to build on the $3bn of issuance in 44 individual offerings so far – saying they’re “the sort of thing we need to more of”.
Also speaking at the event was Bank of America Chairman Chad Holliday, who said investorswere “significantly underestimating” the impact of climate change – and the fact that climate investments “will pay off extremely well”. The former DuPont chairman and current Royal Dutch Shell director advised investors not to bet against technological breakthroughs in clean energy. He also said to be aware of the political impact of dramatic events such as the Fukushima nuclear crisis. Another speaker was Kevin Parker, global head of Deutsche Asset Management. He said: “Climate change is certain to be a major factor in investments for the foreseeable future—perhaps the biggest investment factor of our lifetimes.”
“As a matter of fiduciary duty, we must elevate our attention and action on this huge issue,” said Jack Ehnes, CEO of the $146bn California State Teachers’ Retirement System. “That means improving our own practices and making sure companies we own are doing the same.”
Bloomberg New Energy Finance released new research data showing a record $260bn in total clean energy investment in 2011, up 5% on 2010.
There was a 36% surge in total investment in solar power to $136.6bn, with the US overtaking China for the first time since 2008 in total clean energy investment.
“As fiduciaries, it is our job to make sure investors, businesses and policymakers are responding aggressively and creatively to the risks and opportunities associated with climate change,” said Anne Stausboll, CEO at CalPERS, the largest US pension fund.