Since the UN’s Paris Agreement was made in December of 2015, significant progress has been made towards raising the financing required to achieve its goal of restricting global temperature rises to under 2 degrees from pre-industrial levels.
However, in an article for the International Chamber of Commerce (ICC), S&P Global Ratings’ Head of Environmental and Climate Risk Research, Mike Wilkins, notes that significantly more climate financing will be required to meet the Paris Agreement’s goal – especially in regard to infrastructure financing. Wilkins explains that the 22nd annual UN climate change summit (COP22) in Marrakesh is the time and place to ensure a roadmap is set in place towards achieving countries’ climate financing pledges, as well as capital markets’ role in promoting a green economy.
Wilkins notes that green bonds – bonds whose proceeds contribute to sustainable investments – have already played a critical role in climate financing, and have grown in issuance by over 50% globally as of November 2016, compared to 2015 levels. Additionally, the first sovereign governments will begin issuing green bonds in 2017, beginning with France’s €3 billion green bond early next year. This major leap in sustainable financing shows capital markets’ and governments’ commitment to the Paris Agreement and reducing climate change. Yet Wilkins notes that continued financial commitments will be needed if countries are serious about meeting the Paris Agreement’s goals.
The full article can be read here.