New Energy Realities: Building A Resilient And Low-Carbon Future by Samuel –
Today has been my first experience at COP22 and I’m really excited to join my colleagues: Charlotte, Vicky and Jennifer after scaling over some challenges that delayed me at home. I must admit COP22 holds a lot of interesting but insightful and educative sessions to its participants.
Being fortunate to observe the incredible discussions on the New Energy Realities: Building A Resilient And Low-Carbon Future session gave me the opportunity to be informed on the Global Climate Finance Trends by Abyd Karmali – Managing Director, Climate Finance Bank Merrill Lynch.
According to Mr. Karmali there are efforts and commitments to engender the low-carbon future initiative through
- Decarbonisation of energy sector at pace
- Decarbonisation beyond power – technologies that have to be brought to scale to meet global targets.
- Energy productivity revolution – have to move from 1.3% energy improvement efficiency (year on year) to 3%.
- Fossil Fuel Optimisation.
However, such initiatives are bottlenecked by some challenges:
- 50 – 70% of NDC investment required by NDCs by 2030. Exposure is very low in emerging markets, needed capital and investment flows.
- Fossil Fuels aren’t going away. In order for the FF economy to meet 2-degree target will still require 2 trillion per year. Financial institutions get flack for maintaining some financing in fossil fuel economy. But then how do we live with the transition given the need to be prudent in deploying fossil fuels to keep within carbon budget? Food for thought!
Mr. Michael Wilkins, Managing Director of Environment and Climate Risk Research made important contribution to the discussion as he highlighted the possible challenges, that might manifest in the transformation of energy sector, to financial institutions.
These challenges include:
- Lack of a coherent financial reporting framework
- Challenge for investors, creditors and underwriters to effectively use existing disclosures in their financial decisions.
- Regulators struggle to use existing financial disclosures to determine whether financial systems might be vulnerable to climate-related risks.