I firmly believe that the engagement of the business sector in fighting climate change is crucial.
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The financial response to climate change, essential for a new climate deal, “the oil that will make the machinery run”, said Executive Secretary of the UN Framework Convention on Climate Change, Yvo de Boer, speaking at Bali on Friday.
Mr de Boer stated that economic and financial instruments form an important part of the solution to climate change, and described the financial component of the debate as “the key to success as we move into the future.”
Investments of around $20 trillion will be needed by 2030 to meet the world’s hunger for energy, he added, with more than half of that demand coming from developing countries. Much of this investment, he stressed, will need to come from the private sector. “What we will need is intelligent financial engineering that will blend public and private money in a clever way and make money go where it hasn’t gone before”, he said.
The International Energy Agency (IEA) is predicting an increase in energy demand worldwide of 50 per cent by 2030, with much of that coming from countries with emerging economies such as China and India. Investment decisions made now will have long term consequences, will ultimately determining the greenhouse gas concentrations in our atmosphere for decades to come. Ensuring a shift towards more climate friendly investments will be crucial to a successful climate policy.
A strong focus in talks were also on providing incentives for developing countries to limit their growth of greenhouse gas emissions, as well as recognizing the efforts those countries were already making in that area.
Developing countries, Mr de Boer added, would need incentives to alter the course of an “investment super tanker.” Those incentives would need to be agreed as part of post-2012 climate change deal under the auspices of the UN for which negotiations need to be launched at Bali.
