In line with the Paris Agreement and fighting climate change, the European Commission on December 12 announced a series of initiatives for a modern and clean economy at the One Planet Summit in Paris.
The Commission participated in the One Planet Summit, hosted by the French President Emmanuel Macron, in Paris where it presented its new Action Plan for the Planet, which includes 10 transformative initiatives for a modern economy and a fair society. They are all reflected under the 10 political priorities of the Juncker Commission.
European Commission Vice-President for Energy Union Maroš Šefčovič said the global transition to a clean and modern economy requires true leadership, which two years after the historic Paris Agreement, the European Commission continues to provide. “By intensifying work at the city level where a large part of the low carbon transition happens; By driving innovation and research in technologies of the future; By empowering European youngsters so they master the skills to shape their own climate-fit future; And by making sure that no region in Europe, and no country in the world is left behind. Let’s invest in our planet,” Šefčovič said.
The Paris Agreement sends a clear signal to capital markets and investors – public and private – that the global transition to clean energy is here to stay. Recognising that the Paris Agreement is a key element for the modernisation of the European industry and economy the Commission said the EC sees it as an opportunity for EU businesses to maintain and exploit their first mover advantage when fostering renewable energy, energy efficiency, and competing on the development of the clean technology market globally.
The EU is leading by example and is creating an enabling environment that accelerates public and private investment in innovation and modernisation in all key sectors. “We are making this transition to a modern and clean economy taking account of the differences in the energy mix and economic structures across the EU. Beyond updating and strengthening its energy and climate legislation, the EU aims at developing enabling measures that will stimulate investment, create jobs, empower and innovate industries and ensure that no citizen, worker or region is left behind in this process,” the Commission said in a press release.
“Europe needs around €180 billion in additional yearly investment to power the transition to clean energy and reach our 2030 Paris agreement targets,” Vice-President for the Euro and Social Dialogue, Financial Stability and Financial Services Valdis Dombrovskis said. “This effort will require both public and private investors to fully play their part. Europe’s financial sector should be given the opportunity to lead this effort worldwide. To do that we are ready to put in place the foundations for sustainable and green finance to reach its true potential,” he added.
For his part, Climate Action and Energy Commissioner Miguel Arias Cañete reminded that the Paris Agreement is a global pledge to hand over a healthier planet to future generations. “Now, the time has come to show we will honour this pledge. Europe’s commitment to this Agreement is irreversible and non-negotiable. We played a leading role in brokering the deal exactly two years ago. And we continue to lead through ambitious, enabling climate policies and increased support the most vulnerable,” he said. “From innovative green financing to new partnerships with other countries, investors, cities, states and regions and civil society, Europe is showing the way when it comes to turning the Paris Agreement into action,” Cañete added.
The initiative for the Summit in Paris on December 12 came from Macron at the G20 Summit in Hamburg in July 2017, following the announcement by the United States administration that it would be pulling out of the Paris Agreement.
Macron hopes will give fresh impetus to the fight against global warming, despite US President Donald Trump‘s rejection of the Paris climate accord.
France has organised the Summit together with UN Secretary General António Guterres and World Bank President Jim Yong Kim. The European Commission was one of the key partners.
The Summit brought together actors who are engaged in making the modern and clean economy a reality, and those who have the capacity to financing climate action. Over 1000 delegates participated the Summit, which will continue on December 13 with various side-events.
Global Covenant of Mayors & World Bank team up
Meanwhile, at the One Planet Summit in Paris, the Global Covenant of Mayors for Climate & Energy and World Bank Group announced a new partnership to provide technical and financial assistance to 150 cities across the world undertaking aggressive climate action programs.
The World Bank’s investment of $4.5 billion will ensure cities battling the increasing threats of climate change have the funding necessary to implement sustainable initiatives and climate resilience programmes, the Bank said, adding that the partnership will help countries leverage the private sector by developing bankable business plans, structuring public-private partnerships to crowd in private sector investment, monetizing increases in land values, and designing and implementing credit enhancement mechanisms to allow commercial financing to cities.
The partnership brings together the largest global alliance of cities committed to tackling climate change with the world’s leading development institution to design and structure climate resilient investments and to catalyze new sources of capital to finance them in cities across the globe.
The lending will occur over the next three years under the umbrella of the World Bank’s City Resilience Program (CRP), and will draw on resources from IFC and MIGA to provide financial and technical assistance to 150 cities, including current and future Global Covenant cities, to drive climate ambitions forward and upwards and build greater resilience to climate and disaster risks.
The partnership will be inclusive and open to the full spectrum of investors, from multilateral development banks and international financial institutions, to institutional investors, private investors, and local commercial banks.
Ultimately, this collaboration between the Global Covenant of Mayors and the World Bank will help ensure cities realize the investment potential of their climate action commitments, and will have the ability to contribute to their government’s NDC investment plans in order to meet their Paris Agreement targets.
“Cities are preparing today for the risks of climate change by increasing their resiliency and sustainability – and the World Bank’s financing will help them do more of this work,” said Michael R. Bloomberg, UN Secretary-General’s Special Envoy for Cities & Climate Change and Co-Chair of the Global Covenant of Mayors. “The fight against climate change is being led by cities and communities and it’s essential they have the funds to continue it.”
The World Bank Group President noted that as the force of natural disasters intensifies, “we need to better plan and build more resilient cities. “We are proud to partner with the Global Covenant of Mayors to do just that. With the World Bank’s investment of $4.5 billion in cities, we can support local leaders to protect people from the impacts of climate change”.
EBRD to help finance climate action
Also, the European Bank for Reconstruction and Development (EBRD) has teamed up with a leading group of mayors from around the world to speed up and increase the delivery of finance and support for climate action across dozens of cities.
At the One Planet climate summit in Paris on December 12, EBRD President Suma Chakrabarti unveiled the Green Cities Climate Finance Accelerator, launched together with the Global Covenant of Mayors for Climate and Energy (GCoM).
The GCoM is an international alliance of close to 7,500 cities and local governments united in their goal of promoting action to combat climate change and the move towards a low-emission and climate-resilient society.
Under the new partnership, the EBRD and the GCoM are seeking to drive climate action in up to 60 cities, including many that have not been a focus for climate support so far.
The EBRD will provide over $500 million in “first mover” financing aimed at leveraging additional third party contributions for the development and implementation of city action plans and projects worth a total of $1.5 billion.
The initiative was launched in the presence of Šefčovič, who co-chairs the GCoM with Bloomberg at an event hosted by Paris Mayor Anne Hidalgo.
Speaking at the launch in Paris, Chakrabarti said that, in order to achieve results in climate action in cities, “the EBRD will bring its deep and specific expertise in working with cities and financing their projects.”
Chakrabarti also made it clear that this new initiative can be applied broadly across different geographies. “The structure and specific targets of this financing accelerator provide a working operational model which can be replicated with other financial institutions across regions of the world and built-up to a global scale,” he said.
The EBRD also intends to invest up to $100 million in “Amundi Planet – Emerging Green One”, a fund designed to become the world’s largest green bond fund and the first exclusively dedicated to emerging markets.
Following approval by its Board of Directors, the EBRD plans to invest in up to 5% of the fixed-income fund, which to date has raised already more than $1.2 billion of committed investor interest.
“Amundi Planet – Emerging Green One” was set up by Amundi, the leading European asset manager, in partnership with the International Finance Corporation (IFC), a member of the World Bank Group. It is the first fund focusing on investing in green bonds issued by private sector financial institutions.