Ahead of the Climate Summit, Alice Pauthier from I4CE discuss the major issues of the Summit and related events happening in New York: beyond raising ambition, finance will be on the agenda. She will be in New York with Ian Cochran to present and discuss outcomes of I4CE’s latest report on Paris Alignment, a subject that everyone talks about… without sharing a common understanding of what it is and implies.
On 23 September 2019 Antonio Guterres, the Secretary-General of the United Nations, is convening a “Climate Action Summit” in New York. This is not just another set of negotiations between diplomats:
- On the one hand, a large number of Presidents, Prime Ministers and other Heads of States from around the world will attend. And the expectations are high: the UN Secretary-General has called on Heads of Governments to announce how they will increase ambition and rapidly accelerate action to implement the Paris Agreement.
- On the other hand, the annual and concurrent New York Climate Week will present the latest progress made by businesses, the financial sector and non- profit organizations on climate change and ‘Paris Alignment’. The key question all will be asking is whether public and private actors are moving quickly enough from commitments to action in the fight against what increasingly is being seen as a ‘climate emergency’.
Two priorities for the Summit: raising national ambition and commitments to transformative change
Rewind to 2015: the Paris Agreement and the UN Sustainable Development Agenda have just been approved. In both, individual countries – and the visions and pathways they will follow to achieve ‘low-greenhouse gas (GHG) emissions climate-resilient development’ – are now at the heart of both action on climate, as well as sustainable development. Countries are increasingly asked to define long-term strategies on how to reach these goals and near-term action plans (NDCs or Nationally Determined Contributions) to be revised ‘upwards’ every five years. This new country-led process has placed the emphasis and priority on each country to find its contribution to international goals based on its own context and capacities.
Fast forward to today: progress has been made and the country-led process is increasingly being implemented. To date, 184 country Parties had produced the first round of near-term action plans (Nationally Determined Contributions or NDCs) and a smaller number of countries have defined long-term strategies. However, the verdict is clear – these documents when available, generally fail to provide clear guidance to economic actors. Perhaps more importantly, the UNFCCC and IPCC have both estimated that the ambition is far from what is needed to achieve the goals of the agreement.
Ahead of this Summit, António Guterres, the UN Secretary-General asked governments to present concrete, realistic plans on climate change and to ‘enhance’ (i.e. improve) their NDCs to achieve reductions in greenhouse gas emissions by 45 per cent over the next decade, and to net zero by 2050. These revised plans are highly anticipated as they could send strong – either positive or negative – signals to all economic actors on the evolutions of national economies and societies. The hope being that when the next round of NDCs are submitted in 2020 they will be closer to what is needed to rapidly mitigate and adapt to climate change.
Furthermore, since 2015 there is a growing consensus that long-term climate goals cannot be achieved through business as usual development. At the Summit nine interdependent tracks have been defined and will present coalitions and actions to support the “transformative change” needed in the areas of energy transition; infrastructure, cities and local action; industry transition; resilience and adaptation; nature-based solutions; climate finance and carbon pricing. These tracks are expected to lead to commitments with the strong involvement of governments at the highest level to put into place the policy and investment frameworks to support the necessary transformation of economies and societies. One topic to watch for will be announcements and commitments around financial regulation as work of the network of central banks (NGFS) is advancing, yet studies increasingly demonstrate that further progress is needed even in leading countries.
Decrypting climate and finance discussions: increasing climate finance with one hand while ‘aligning’ all financial flows with the Paris Agreement objectives with the other
While finance may not be the main topic of discussion at the New York Summit, the two finance-related aspects of the Paris Agreement will be on the agenda:
- Climate finance: First, the Climate Finance and Carbon Pricing track of the Summit led by France, Jamaica and Qatar and supported by the World Bank will focus on delivering on the commitment of providing USD 100 billion annually by 2020 for mitigation and adaptation in developing countries. While the Green Climate Fund is in the process of its first replenishment, the topic will be high on the political agenda – with a specific focus on the support from developed countries to developping countries in implementing and/or improving their NDCs.
- Alignment: Second, New York will also be an important ‘milestone’ for practitioners’ discussions on ‘Paris Alignment’ on the margins on the Summit. Article 2.1(c) of the Paris Agreement has created an additional mandate for all country Parties to make all domestic and international financial flows consistent with a “low GHG emissions and climate-resilient development” pathway. Since COP21, an increasing number of public and private financial institutions have taken the commitment to “align” with the Paris Agreement. But to date no overarching framework has been proposed to define what it means and implies in practice. I4CE has just launched a Discussion Paper proposing a framework that can be used by economic and governmental actors – including financial institutions – seeking to align strategies and operations with the Paris Agreement. Part of the joint project supported by the International Development Finance Club and the European Climate Foundation, the Climate Policy Initiative has released a first application of I4CE’s framework to development finance institutions.
At the Summit, This event is part of a series of workshops, which started at COP24 in Katowice and was followed by discussions sessions in June 2019 in Bonn bringing together think-tank experts, financial sector practitioners and other stakeholders to exchange on emerging research and approaches to date on the topic. The New York workshop aims to foster exchanges on the growing body of research, expertise and approaches on Alignment with the objectives of the Paris Agreement and more broadly the Sustainable Development Goals (SDGs).
The Summit will provide an opportunity to take stock, identify the key questions, points of convergences and potential divergences today as all actors move forward with their roadmaps and strategies for contributing to the achievement of the Paris Agreement objectives. And hopefully also help answer the enduring question: are we doing collectively enough?