makingit_16_pp20-21_razzouk_print 22/07/2014 11:02 Page 20
Assaad W. Razzouk considers how we are going to finance the transition to a green economy.
Where’s the money? According to the United Nations Intergovernmental Panel on Climate Change, the Earth is set to warm by 4 to 5 degrees compared with pre-industrial levels, warming that will wreak devastating effects on the planet and lead to massive destruction, loss of life and loss of subsistence for millions. In order to avoid this outcome, the International Energy Agency says we need US$1trn a year until 2050 to finance a transition to green growth and green lifestyles.
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ASSAAD W. RAZZOUK is a Lebanese-British clean energy entrepreneur, investor and commentator. He is Group Chief Executive and co-founder of Sindicatum Sustainable Resources, a global clean energy company headquartered in Singapore; a board member of the Association for Sustainable and Responsible Investment in Asia; and a board member of the Climate Markets and Investment Association.
Picture: istoc k / De
First, based on research by the Climate Policy Initiative, three-quarters of all climate financing already comes from the country it is spent in. We will need (and will have to get) funding from most countries, even very poor ones, though that’s not the same thing as saying we need it from their public purse: climate change is a global “commons” and requires every individual, company, and country to participate in its solution. Countries with little capacity to reduce emissions and adapt to climate impacts will nonetheless have a deep-pocketed private sector which can contribute. What matters is how the private sector can be made a full partner in the fight against climate change. The private sector already accounts for more than 60% of global climate finance and if we are to get to US$1trn in annual climate finance flows, it will have to account for the majority of funding.
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Where is this US$1trn going to come from?