Day One: World Climate Summit - Finance, skills
and the changing paradigm of leadership.
I walked past fleets of sparkling new aircraft on the
sun-blanched airstrip at Doha International Airport, and saw in the
hazy distance a skyline that scarcely existed when the first UNFCCC
Conference of Parties took place in Berlin 18 years ago. I'd
arrived for COP 18.
My first port of call was the third annual World
Climate Summit, which brought together hundreds of leaders in
business, finance and government to discuss their collective roles
in meeting the challenge of climate change. Among the distinguished
speakers was Christiana Figueres, Executive Secretary of the
UNFCCC; His Excellency Mr. Al Sada, Minister of Energy and Industry
for Qatar; and Connie Hedegaard, EU Commissioner for Climate
Action, and former host of COP 15 in Copenhagen, the yearned-for
watershed conference that was widely slammed as a failure.
Speakers at the Summit examined the role of public private
partnerships in delivering solutions to climate change most
cost-effectively, and discussed how to transform the global energy
mix to make it sustainable. The expected suggestions included the
importance of policy continuity, internalising externalities
through carbon pricing, and the role of public sector procurement
and incentive mechanisms to support scale-up and decrease
But there were some non-traditional ideas as well, which can be
broadly split into finance, skill building, and leadership.
Some financially focused suggestions included arrangements to
reduce the effective cost of capital. For example, creative
risk-sharing mechanisms can be used to de-risk investments through
mezzanine finance or concessional, first-loss investment
structures. The UK's Green Investment Bank was highlighted as a
pioneer in this space, and the World Bank's International Finance
Corporation is looking into it too. Another suggestion was
to access the $95+ trillion bond market by learning how to
securitise energy efficiency and renewable energy projects.
The role of sovereign wealth funds and pension schemes was also
explored as an additional source of finance. Low-carbon
infrastructure has a big price tag, and new source of money need to
be found since governments are skint, banks are cautious about
investment tenures longer than seven years (twelve years was common
pre-recession) and companies are selling assets and hoarding cash
to improve their balance sheets. Torben Moger Pendersen, CEO
Denmark, explained that since safe bond markets are providing
negative real rates of return and equities are too volatile,
renewable energy investments are a good option for pension funds.
They offer long-term capital investments with attractive rates of
return, provided that their major risk - continuous, certain,
long-term policy conditions - is mitigated through strong
The importance of skill building was also a recurring theme.
There is an urgent need to support technology transfer and
accompany it with capacity building since much of the globe's
future energy infrastructure will be built in the developing world.
Helping potential finance recipients learn how to access money
through mechanisms like the Green Climate Fund would be useful.
Helping to establish emissions trading schemes outside the EU and a
handful of other developed countries is also important, and is
being facilitated by the World Bank's Partnership for
Finally, Christiana Figueres moved to discuss leadership in her
closing remarks. Asked about her thoughts on potential US
re-engagement with the UN climate process, she insisted
that the climate change
challenge can't be approached with an out-dated notion of
limited leadership. The challenge can only be met with an
'omni-partnership' among governments, internationally and at all
levels domestically; the business community, who must recognise the
business benefits of climate action, especially around energy
efficiency; and the public, who must understand the human impacts
and potential benefits of action so that their governments and
businesses have a mandate to act. Just as the paradigm of knowledge
has shifted from a single source (Encyclopaedia Britannica) to one
where everybody's knowledge counts (Wikipedia), so must the
paradigm of leadership shift from the UN negotiating rooms to one
where action takes place at all levels, in all places.
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insights from the UN climate negotiations in Doha.