Writer: Patricia Carbonell, Communication Coordinator, Revolve Media
There is no denying that global warming is occurring and that this change is having significant and growing effects on the economy and on society as a whole. The contribution of countries to climate change, and their capacity to prevent and cope with its consequences, varies enormously and the role of local and regional governments is key to achieving the objectives of the Paris Agreement.
This year at the 23rd United Nations Climate Change Conference of the Parties (COP), to take place in Bonn from 6-17 November 2017, leaders should be making substantial progress towards fully implementing the Paris Agreement, in particular with regard to aspects related to climate financing.
With this ambition, members of the European Committee of the Regions (CoR) – the EU’s assembly of local and regional governments – came together from 9-12 October in Brussels during the European Week of Regions and Cities and called for adequate mechanisms for climate finance, reiterating the importance of integrating a multi-level, multi-stakeholder governance approach and committed to strengthen relations with cities and regions outside Europe’s borders to advance the climate agenda.
During the CoR plenary session the European Commissioner for Energy and Climate, Miguel Arias Cañete reaffirmed EU leadership for upcoming UN climate talks as local governments adopt positions on climate finance and said:
“we must make good progress on the implementation of the Paris agreement and reach a consensus on its work programme by the 2018 deadline. The world can continue to count on Europe for global leadership. We will work with all our partners to ensure COP23 is a success, including the many cities, regions and businesses that continue with ambitious climate action.”
EU’s assembly of cities and regions has recently commissioned a report on climate finance. It identifies existing schemes at the EU and international levels, draws faced obstacles and ways to overcome them. Access the full report on ‘Financing climate action: opportunities and challenges for local and regional authorities.
The CoR believes that EU local and regional authorities have ample scope to improve their investment capacity (and to attract outside investment). The CoR considers the European Commission could strengthen the percentage of the budget devoted to actions to combat climate change and environmental sustainability to projects that aim for a greater degree of involvement of local and regional authorities so that they can share their successful experiences and develop their capabilities.
Under the current budget period, the EU is committed to deploy 20% of the EU budget for the 2014-2020 period to climate action. The CoR proposes a series of mechanisms aimed at mobilising private investment and exploiting the full opportunities for innovation and development arising from the gradual transition towards a new economic and financial model.
The principles of “climate justice” should be a fundamental aspect of international commitments to ensure that human rights-based investments are being provided and help communities most vulnerable to climate change, including the creation of a climate of cooperation between public and private actors, in line with objective 17 of the United Nations Sustainable Development Goals.
For example, EU legislative proposals should be accompanied as a matter of course by climate impact assessments and an assessment of how they will contribute to the Paris Agreement objectives. The idea is to position climate change and sustainability issues as a dominant cross-cutting trend across all funding programmes so it increases awareness of risks and opportunities, readiness to act and provide financial management capacity. It is also important to recognise that better informed decisions would enable investors to move towards more sustainable investments.
The EU has various laudable initiatives in the area of climate finance in progress that is helping to position it in a leadership position to solve climate issues. The European Commission is addressing important recommendations to improve the efficiency of on-going EU initiatives. Among these are the need to establish a common European taxonomy flanked by guidelines for investors and a specific labelling system based on appropriate performance indicators, providing a simple and concise assessment of the quality of assets. This would contribute to free up resources for private investments, with a reduction in capital requirements for institutions that grant loans for sustainable investment and climate-related purposes.
The Commission addresses the need for a more ambitious and forward-looking approach to reduce industrial emissions of greenhouse gases in a cost-effective way. It addresses the necessity to amend the current regulation and to assess special measures such as setting a minimum carbon price, increasing the prices for emissions, or re-assessing the idea of a European carbon tax.
Other instruments such as green bonds and collective guarantees have proved to facilitate financing. They can be developed by local and regional authorities in cooperation with national and European institutions. Rapporteur Marco Dus (IT/PES) said:
“It is not political will that European cities and regions are lacking but tailored financing mechanisms and the technical capacity to access them.”
Marco Dus calls for creating new ways, such as with green bonds and collective guarantees, to finance climate action locally. Member of the Vittorio Veneto Municipal Council in Treviso concluded:
“Along with the need for additional financial mechanisms tailored to local governments, it is essential that subsidies to economic activities with high environmental impact are gradually phased out and disappear completely by 2035.”