By John Parnell
RTCC in Durban
Abyd Karmali, Bank of America Merrill Lynch's global head of carbon markets calls on the GCF to get capital flowing
The private sector has an almost unlimited ability to fill the Green Climate Fund (GCF), which must be established immediately, a panel of business and investment leaders has said.
Speaking at a COP17 side event organised by the International Chamber of Commerce and RTCC, the group called for negotiators to sign-off on the fund’s design as soon as possible.
“There really is no limit to the scale of the finance that is achievable it is just a matter of making sure there are the right incentive mechanisms in place,” Abyd Karmali, Bank of America Merrill Lynch’s global head of carbon markets told RTCC after the event.
“Whatever direction we take to get to that goal, we’re comfortable with. Of the $100 billion a year by 2020 that is needed for the GCF, a huge chunk of that has to come from the private sector. Maybe not from carbon markets specifically but certainly from capital markets. For me, ensuring that there is a specific unit [within the GCF] that is looking to engage with the private sector, that is non-negotiable,” added Karmali.
He was not alone in his insistence that any action on the GCF had to come soon.
“The GCF has lots of good components, there is not enough about market mechanisms but never mind, let’s just get the money flowing,” said Joan MacNaughton, SVP Environmental Policies and Global Advocacy, Alstom. “We want a global deal and a global price for carbon.”
Bankrolling renewable projects and improving energy efficiency is not solely reliant on long-term funds with innovative new finance options emerging.
Philips is involved in multiple projects to exchange inefficient light sources with LEDs. Senior director for energy and climate change Harry Verhaar explained how the company has established a payment plan linked to efficiency savings to ensure that no additional costs are acquired by the recipient.
Iris Flacco and Andrea Veschi, from the energy department of the Italian Region of Abruzzo, described how they have used a voluntary commitment to the Kyoto Protocol to inform policy and spending decisions at a local level. As with energy, the efficiency of spending is as important as the source.
Talks are expected to continue on the design of the GCF, with all parties publicly committed to its formation in Durban.