Having served as the executive secretary of the United Nations Framework Convention on Climate Change (UNFCCC) during the 2009 U.N. climate summit in Copenhagen, I am well aware of the hopes shared by world leaders seeking a common agreement this week in Paris. Indeed, expectations were similarly high in 2009.
There was tremendous hype and build-up for those talks, and while we were able to make significant progress, we failed to cross the finish line with a comprehensive deal. There are many reasons to believe that, like Copenhagen, a binding treaty is out of reach for Paris. However it is my belief that an agreement that is balanced and can be revised at regular intervals is attainable if a few basic challenges are overcome.
The first challenge is financing. At the Copenhagen summit, developed nations set a goal of mobilizing $100 billion per year for climate programs by 2020. While this funding was initially slow to come in, in recent years significant progress has been made. The Green Climate Fund was formally established by the UNFCCC in 2010 to collect and mobilize financial support, and multilateral development banks such as the World Bank have agreed to significantly expand their climate funding, bringing us closer to the $100 billion figure.
Secondly, the national climate pledges already made by over 185 countries are not enough to reach the goal of keeping global warming below the 2 degrees Celsius mark. Therefore, an agreement in Paris must include a system to increase the level of ambition of the target.
Another issue is that many countries have called for a broad review every five years to evaluate the progress of any agreement. An understanding of whether countries are meeting their commitments to finance, capacity building and technology has been deemed crucial by developing countries.
Lastly, and arguably the most serious sticking point, is the debate about the legal force of an agreement in Paris. While many developing countries favor a binding treaty, countries such as the United States and China are in favor of an accord based on domestic law and regulation.
These challenges will not be easily overcome, but there is significant momentum that indicates a deal is possible.
Yet with or without a binding global agreement, both developing and developed economies will need assistance building technical capacity and implementing the new standards which they have already agreed to in their national commitments. While some countries have estimated the costs of implementation, and some have differentiated what will be achieved domestically and what portion is conditional on international support, there is little mention yet on how these countries intend to attract the investment and what policies they will implement to incentivize that investment.
That is why it is essential that we begin now to look beyond Paris to identify platforms for knowledge sharing and capacity building that will help attract and secure financing of “bankable” green growth projects.
The reality is that the availability of finance is not a bottleneck. A recent study by the Climate Policy Initiative suggests that of the $71 trillion that is estimated to be managed by institutional investors in member-countries of the Organisation for Economic Co-operation and Development, at least $689 billion can be invested in renewable energy through corporate vehicles and about $257 billion directly to green projects.
What is missing, then, are projects and financial vehicles that are structured in ways that meet the risk and reward expectations of investors. What good is billions of dollars in financing being made available by multilateral banks and other sources if there are not enough technically viable proposals to take advantage of the money?
That is why organizations like the Global Green Growth Institute (GGGI), of which I serve as the director-general, are working as a bridge between multilateral financial institutions and local, regional and national leaders to mitigate the financial and technical challenges of implementing green growth strategies.
Country-level coordination and collaboration is essential to build the capacity of countries to deliver on their commitments by leveraging innovative financial solutions and to overcome the policy challenges necessary to mainstream green growth in their national, sub-national and local planning, financing and institutional frameworks.
When it comes to climate talks, perfect is truly the enemy of the good. If the private sector, national and local governments, multilateral institutions and technical experts can come together to address a few fundamental challenges now — regardless of the outcome of the Paris summit — we can help move a workable framework forward that ensures that the 2 degree Celsius target seems less formidable to both developing and developed economies.
De Boer is the director-general of the Global Green Growth Institute and was the executive secretary of the United Nations Framework Convention on Climate Change from 2006 to 2010.