Incheon government has been very active in fighting climate change by actively participating in global reduction in GHG emissions as well as providing platforms where countries can gather to discuss climate change issues. Other than hosting the GCF and other international organizations, Incheon government plans to reduce city-wide emission by 30% by 2020.
Since the inception of the GCF, the World Bank Group has been sharing its experience in climate finance operations. In July, the World Bank, which serves as the interim Trustee to the GCF, was accredited as an implementing entity with intermediary functions to the GCF.
This year is a critical year as the international community negotiates the international agreements that will help the world address the urgency of limiting the global average temperature increase to 2 °C above pre-industrial level.
As climate change affects us all, all countries face the challenge of how best to place their economies and societies on a low-carbon, climate-resilient development path. Both public and private financial institutions have a critical role to play in channeling short and long-term financing to investments to support implementation of such pathways.
The World Bank Group counted around US$12 billion in climate finance for 2014, around 20% of the total funds. The group has been continuously increasing the funds for climate change. From green bonds that the World Bank Group issues, there are new products to support development finance on climate change.
In the recent Climate Finance Ministerial Meeting which took place earlier in the month in Peru, World Bank announced that it would, provided support of its Governors, grow climate finance by a third, from 21% to 28% of annual commitments by 2020. If financial capacity is maintained at today’s level in real terms, this means reaching $16 bn/year public finance.
The expansion will contribute to the overall funding promise made by developed countries to finance $100 billion per year by 2020. The increase will also help to support restoration of degraded forests, renewable energy, and enhanced water security, among other initiatives.
Understanding the importance of catalyzing private sector investment in mitigating climate change and expanding climate finance, IFC, a member of the World Bank Group, and the largest global development institution focused exclusively on the private sector in developing countries has the following 3 focuses: i) renewable energy – direct investment in FY14 has reached over US$1 billion with a total project size of US$8.8 billion, ii) resource efficiency and iii) innovation finance – issue of green bonds.
Since 2005, IFC has committed more than US$13 billion in climate related investments with US$11 billion in long term financing. In FY14, 117 climate related projects were approved with total of US$2.5 billion.
As one of the World Bank Group vice presidents put it, ‘failure to address climate change threatens to roll back decades of development pose a serious threat to our shared prosperity’.
I hope this forum will provide stakeholders from across the financial community with the opportunity to discuss innovative ways to catalyze climate finance that will ensure sustainable investments consistent with a low-carbon, climate resilient future.