Not nearly enough money is flowing into low-carbon investments to meet the goals of the Paris climate accord, according to a U.N. report released yesterday.
Since 2014, when the U.N. Environment Programme created the U.N. Environment Inquiry to study ways to make the global financial system less reliant on fossil fuels, central banks, regulators and the private sector have noted more and more that climate change poses an economic threat to the world.
But investors are moving too slowly to protect the Earth, the Environment Inquiry said yesterday, when it issued a report that took four years to produce.
“Over the four years of the Inquiry's operations, we have seen reform of the global financial system gather pace as banks, investors and regulators realize they must step up — not just to protect people and the planet, but their bottom lines,” said Erik Solheim, head of U.N. Environment, in a statement.
Still, the inquiry said, “current financial flows are still nowhere near enough to deliver the trillions of dollars needed” to meet the Paris deal.
By most estimates, adapting to climate change will cost governments trillions of dollars.
World Bank President Jim Yong Kim and International Monetary Fund Managing Director Christine Lagarde told finance ministers in Washington, D.C., in the fall that trillions of dollars will be needed to rebuild from natural disasters associated with climate change (Climatewire, Oct. 16, 2017).
Nations could raise trillions of dollars by eliminating fossil fuel subsidies, they said.
“Sustainable finance is certainly starting to get contagious,” the report reads. But that contagion is not spreading fast enough, and investors continue to plunge their money into investments tied to fossil fuels, according to the Environment Inquiry.
“Clearly, some capital is flowing to the new economy that we need,” it said. “But far more is continuing to support the old economy.”
Reprinted from Climatewire with permission from E&E News. E&E provides daily coverage of essential energy and environmental news at www.eenews.net.