World Bank, National Leaders Deliver Climate Finance Pledges at Macron Summit
Without any official standing in the world’s diplomatic battle to restore climate stability by ending the use of fossil fuels, French President Emmanuel Macron’s one-day One Planet Summit in Paris still provided a stage yesterday for a flurry of hopeful commitments from national governments, international institutions, and private companies.
Macron’s stated reason for inviting world leaders to the City of Light was to “encourage private investors to fill the annual [financing] gap of US$210 billion needed to meet the requirements of the Paris agreement,” the Washington Post reports. More than 50 government leaders and heads of state accepted the French leader’s invitation.
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Conspicuously absent from the invited guest list was Donald Trump, who in June announced that his country would abandon the climate accord reached in the French capital two years ago.
“The (U.S.) withdrawal—to be totally fair with you—created a huge momentum to me to create a counter-momentum,” Macron told American CBS News in an interview. “If we decide not to move and not change our way to produce, to invest, to behave, we will be responsible for billions of victims.”
For the 39-year-old Macron, there was also “an element of prestige” at stake, said Marc Antoine Eyl-Mazzega, who leads the Center for Energy at the French Institute for International Relations. “France and President Macron want to play a leading role in global climate governance,” Eyl-Mazzega told the Post.
If that was the case, Macron may have been planning a victory lap by the end of the day. His one-off showcase for climate finance action brought some significant steps forward.
Perhaps the biggest was a dramatic reversal of policy by the World Bank, which announced that except in very exceptional circumstances in the poorest countries, it will no longer finance upstream oil and gas exploration or development after 2019. The global development bank had already announced that a 2018 target date to begin to publically “report greenhouse gas emissions from the investment projects it finances in key emissions-producing sectors, such as energy”.
The Bank also plans to begin applying a shadow price on carbon in its economic analysis of all projects “in key high-emitting sectors” that seek financing through its International Development Association or International Bank for Reconstruction and Development arms. Another affiliate, the International Finance Corporation (IFC), “started using carbon pricing in key sectors in January 2017 and will mainstream the same starting January 2018,” , the Bank noted.
One of the world’s largest private financial services companies also used Macron’s summit to expand its fossil divestment.
France’s giant Axa insurance firm, “one of the first major financial companies to start selling off coal investments in 2015, with a €500 million divestment, raised this to €2.4 billion,” the Guardian reports, dropping “100 companies that derive more than 30% of their revenue from coal.”
Of particular significance to Canada, Axa announced that in addition to divesting from “25 tar sands companies,” it would also withdraw €700 million in insurance coverage it provides to “three major pipelines needed to deliver [tar sands/oil sands] oil to market”. Axa didn’t further identify the pipelines, but it was assumed they are located in North America.
Axa CEO Thomas Buberl said the divestments reflected both business and ethical motives. In addition to their contribution to climate change, Buberl asserted, Canada’s tar sands/oil sands “present acute human rights issues, if you think about population displacement and also the local pollution they produce.” From a business perspective, he added, “pipelines will also be stranded assets at some point, so we don’t want to invest.”
Meanwhile, Canada joined Mexico, Colombia, and Chile, as well as several state and provincial governments, to cooperate in extending carbon pricing across the western hemisphere.
In their Paris Declaration on Carbon Pricing in the Americas, the governments pledged to work together “to implement carbon pricing as a central policy instrument for climate change action [and] deepen regional integration of carbon markets across the hemisphere.”
The governments committed to “apply a cost of carbon to guide public investment decisions and encourage private companies to do the same,” and to “increase alignment of carbon pricing systems.”
“As a necessary foundation for the coordination of carbon markets within the Americas and globally,” the governments also pledged “to strengthen systems for measurement, reporting, and verification of greenhouse gas emissions,” and to “explore the development of common standards to ensure the environmental integrity of international market mechanisms.”
And those were not the only headlines.
“More than 200 institutional investors with US$26 trillion in assets under management said they would step up pressure on the world’s biggest corporate greenhouse gas emitters to combat climate change,” Reuters reports, while European Commission Vice President Valdis Dombrovskis revealed the EU executive was “looking positively” at relaxing regulations to expedite “environmentally-friendly investments by banks”.
And Paris Mayor Anne Hidalgo, chair of the C40 Cities initiative, joined former California governor Arnold Schwarzenegger to highlight the benefits that achieving the 2015 Paris climate goals would bring to the world’s municipalities.
Speaking on behalf of C40, “a network of megacities committed to addressing climate change,” the two drew attention to new research showing that if all member cities met the goal of “encouraging more people out of their cars, it would potentially prevent more than 45,000 premature deaths each year.”
In addition to climate benefits, switching from driving to an active commute could reduce city dwellers’ risk of heart disease and stroke by 23%, type 2 diabetes by 15%, and depression by 14%.
While the One Planet event helped attract plenty of international media attention to these and other climate-related advances, its host’s geo-political agenda also had its moment in the spotlight.
In what Reuters calls “a pointed piece of timing, Macron used the eve of the summit to award 18 grants to foreign climate scientists, most of whom are currently U.S.-based, to come and work in France”.
The awards made good on an earlier headline-grabbing promise from the media-savvy French president. “Days after Trump’s decision to leave Paris,” E&E News [subs req’d] recalls, “Macron committed €60 million to support U.S. climate scientists who are no longer receiving funding at home.”
“I jumped at the promise of a five-year contract,” one happy American recipient told the Washington Post. Alessandra Giannini has been studying the effects of global warming on Africa’s Sahel region as a professor at Columbia, but had tired of the increasing difficulty of securing funding from U.S. agencies.
“What stands out in the motivations” for many American claimants of French funding, observed Corinne Le Quéré, director of the UK’s Tyndall Center for Climate Change Research, who participated in the selection of winners, “is that it is currently very difficult to conduct innovative scientific research in the U.S. with the planned government cuts and general political climate, especially the politicization of climate research.”
For one day, at least, the newly-installed French president demonstrated a better grasp of capturing the media moment than the much older former reality TV star currently commanding the Oval Office.