How to redirect capital towards a low-carbon and resilient growth

Date: December 8, 2.45pm until 4.15

Location: European pavilion – Brussels room

Organisers: GLOBE EU

According to the International Energy Agency, the world will need $1 trillion each year until 2050 to finance the transition to a low-carbon global economy. Some estimates run even higher: recent studies show that, by 2020, more than $5 trillion will need to be invested annually in green infrastructure to ward off climate change.

Public funding has played an important role in delivering on the global commitment of $100 billion climate financing annually by 2020. This commitment, in spite of efforts by the public sector to mobilize alternative sources, hasn’t fail to raise the immense amount of money needed unless financial support by the private sector is unlocked.
New and innovative sources of financing, as well as enhanced cooperation between public and private sector, are needed to spur the investments needed; for climate adaptation as well as mitigation. Financial regulations around the world, however, continue to spur investments in carbon intensive technologies. As long as climate policies and financial sector policies run separate trajectories, therefore, we weren’t be able to turn the tide.

The objective of this GLOBE EU side event was to understand the role played by the financial sector and the mechanisms of financial regulation. It sought to identify the changes necessary in regulation and recognize the need for voluntary action.

Regulatory change could include, for example, increased capital requirements for banks to reflect the risks of high-carbon investments; changes in the policies of credit rating agencies when determining environmental risks; and stricter accounting standards and rules concerning the disclosure of climate risks to the investors.