How can existing climate finance sources be scaled up in innovative ways to help mitigate loss? During today's OnPoint, Barbara Buchner, senior director of the Climate Policy Initiative and the head of the secretariat for the Global Innovation Lab for Climate Finance, discusses post-Paris opportunities for financing climate resiliency. Buchner talks about the critical financing elements that remain undefined following last December's historic climate agreement.
Barbara Buchner: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Barbara Buchner, senior director of the Climate Policy Initiative and the head of the secretariat for the Global Innovation Lab for Climate Finance. Barbara, it's wonderful to have you back on the show.
Barbara Buchner: Thank you so much for having me here again.
Monica Trauzzi: Barbara, heading into the Paris climate meeting, climate finance was one of the most critical items that needed to be addressed. Access to funding is seen by many as the pathway forward to achieving some of the goals of the Paris Agreement. What remains uncertain or undefined, post-Paris, on finance that could have a direct impact on the success of the agreement?
Barbara Buchner: Well, first of all, I do want to stress that I think the Paris Agreement gave a really strong signal to governments and businesses that it's time to decarbonize the economies, their supply chains and their business models, basically. So I think that signal that came out of Paris is really strong in order to really change the pathway of our economies, which is the very positive.
At the same time, as you said, there's still some open issues, and I think what we really need to do, also, to keep the momentum after Paris is to make sure that the move from the diplomacy and from the successes in Paris to reimplementation on the ground. I think there is a number of issues which are both related to how we translate the nationally determined contributions, the indices, the national plans that countries have ... into reinvestment plans and concrete deals on the ground, again, but there's also some issues around still -- still open around what counts as climate finance, you know, what counts as mobilized private finance, what is actually -- what is it that countries are currently still count against their targets, the goals, the financing goals that they have committed to doing in Copenhagen.
Monica Trauzzi: And you've often pointed out the difference between political benchmarks on finance versus what's actually needed to support --
Barbara Buchner: That is true.
Monica Trauzzi: -- resilience. How different are those two numbers?
Barbara Buchner: Well, I think, you know, let me maybe just start from most recent numbers. So the latest ... global landscape for climate finance, what we find is that in 2014, global flows that target climate change actually achieved $391 billion. That's global flows, you know, looking at all -- basically, a snapshot of what are all the public and private flows, domestic flows, that are currently happening, and that is more than has ever been counted, so it's more money than ever is flowing towards a climate action, which is very positive news. But if you then compare that of what's needed in order to get us on the 2 degrees pathway, again, which has been stressed by Paris, we actually see that it's only a fraction of that. So what the International Energy Agency says is that you need about $1 trillion per year up till 2020 just in the energy sector if you want to get towards 2 degrees target. So that's a big gap, still, that we need to fill with concrete action.
And I think maybe just on the other point that you said, that is the global -- that is really the 2 degrees pathway. If you look at what is -- and currently, what countries have committed to in their funding goals, that is, the $100 billion that developed countries have committed to -- basically to channel to developing countries by 2020 a year, and what we see there in the recent study is that we have about $62 billion in 2014 that we have been able to track -- again, there are still lots of issues around the tracking and the methodologies, so there is also gap in that context. But I think the $100 billion, for me, is a start point. It's not an end point. It's really the first thing you need -- you really need to go beyond in order to get us on a low carbon pathway.
Monica Trauzzi: There are several important finance-related meetings happening this spring, one of which is the UNFCCC's Standing Committee on Finance forum that's being held in Germany at the beginning of April. What are you hoping will be addressed and achieved there?
Barbara Buchner: I do hope that we will build on the success of Paris. ... At least, I think, the open issues have been put on the table, and so I do hope that this meeting, the standing committee meeting -- and will be -- part of that will be attending the meeting -- will really help to come up with a clear pathway of how we can address some of the open issues, what are the decisions that are being needed, and how can we really make sure that we actually go towards understanding what is that money on the ground and how can we scale it up.
Monica Trauzzi: Are there existing sources that you can point to that can be scaled up in an innovative way to help mitigate loss?
Barbara Buchner: Well, again, just coming back to our figures, we do see that the public sector is still the key engine behind the overall climate architecture, so I think it's important to point out that the public sector has really been able to stimulate additional action, and private sector now, however, is the dominant source. So if you really want to scale up climate action, we need to make sure that we use public money and public policies most effectively to unlock additional private investments and really use each of the different parts to development finance, institutions, the different climate funds that are available, use them all most effectively to really align different public and private sources, both international and domestic.
I think "domestic" is the other key word here. What we see in our work is that about 74 percent of overall flows are domestic, which means that they originate and are spent in the same country, and that just shows that there's really a preference for investors for environments that they're perceived to be stable and less risky. So what we really need to do, also, to scale up action and, you know, around the world is to make sure that the policy frameworks are right and that the incentives are right in the countries.
Monica Trauzzi: Secretary Kerry's pledge in Paris was viewed very positively. Are you concerned that a Republican administration potentially coming into office here in the United States could shift the path of the U.S.'s pledge on adaptation and GCF funding?
Barbara Buchner: Well, I do think the U.S. has, over the last years, played a really important role in kind of getting us to the point where we are, and certainly, around the world, I think everyone is concerned is always looking at what is happening in the U.S. -- and this year is a key year for that one -- but I do hope, really, that all the work that has been built up through the current administration or the previous ones will continue and will really help us to get the funding to the places that's most needed, and I think the GCF is a really important vehicle to make sure that we will get some concrete action on the ground in emerging economies.
Monica Trauzzi: All right, we'll end it right there. Thank you so much for coming back on the show.
Barbara Buchner: Thank you so much, Monica. Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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