Core message from IMF/World Bank Spring Meeting is that governments must invest in low carbon revolution, writes UK shadow climate change minister Barry Gardiner
(Pic: World Bank Group/Flickr)
I am in Washington DC.
And so it seems is every other energy, finance or climate change minister all the way from Angola to Zaire (as one Parliamentarian from DRC anachronistically referred to her country).
The World Bank Spring Meetings have drawn the world to DC. And I confess it does feel a little bit like a Paris Climate Reunion.
Last year was a landmark. Every country in the world pledged to play its part in transforming the global economy away from fossil fuels.
The Sustainable Development Goals charted our responsibility to provide our people with a better, fairer future.
In the words of IMF supremo, Christine Lagarde, “Governments must now put words into actions.”
The right people are ‘in the room’ this week, and this room is precisely where Paris Agreement and the Sustainable Development Goals need to land.
These are the people who make decisions every day about national strategies, financial risks and infrastructure choices.
The week began with the Global Parliamentary Conference, and the World Bank’s Jim Kim could not have delivered a clearer message to MPs.
The global economy is in trouble and politicians need to boost growth by creating jobs and investing in infrastructure.
Mme @Lagarde tells us: "growth less than hoped & risks to global economy higher"
And Brexit leads to a "dark place" pic.twitter.com/aSWXohidP2— Barry Gardiner (@BarryGardiner) April 11, 2016
In particular: energy infrastructure must be overhauled as we move to a low carbon economy, as fossil fuel subsidies are disproportionately benefitting the rich not the poor.
And did I mention? Austerity is not working. You might have been forgiven for thinking you were at a Jeremy Corbyn rally.
Six hundred million young people will emerge onto the jobs market over the next decade; but there are only two hundred million jobs waiting for them.
That is not comforting news for politicians – especially at a time when the world economy is undergoing the largest transformation since the Industrial Revolution, shifting from fossil fuels to a low carbon energy base.
In one workshop colleagues from Namibia, South Africa, and Ghana indicated they were tired of seeing engineering and economics graduates return to menial jobs because there was no access to capital and no joint planning of infrastructure projects by government and the private sector.
UK chancellor George Osborne could have learnt something had he popped in to hear economists and politicians talking about the vital importance of providing investors with a clear, stable, long-term regulatory framework to develop solar infrastructure.
A recent reverse auction in Mexico, Dr Kim noted, had produced a price of 3.6cents per kilowatt hour for solar whilst fossil fuel in the same country would cost three times that much.
In contrast, a British parliamentary committee recently voiced its concern that investor confidence in the UK has declined.
Meanwhile robust, stable, long-term support for clean power elsewhere has seen the UK fall out of Ernst & Young’s top 10 countries for attracting low-carbon investment for the first time ever.
Legislators in Washington are clear that governments need to quickly ensure international ambition is embedded in national planning.
Paris is a deal that rests upon domestic action. That places critical importance on the need for MPs to scrutinise effectively their governments’ plans to meet and go beyond existing targets over the next five years.
Game changer
The Paris Agreement delivered a clear signal that decarbonisation is inevitable and irreversible.
But it is the decisions made by finance and economic ministers about infrastructure investments that must cement the low-carbon transition in practice.
In a context where oil prices are increasingly volatile, decisive global action in line with the Paris Agreement is making investing in high-carbon projects even more high risk.
The G20 identified climate change as a major risk to global economic stability last year.
The Financial Stability Board, headed by Mark Carney, charged a taskforce on Climate-Related Disclosures to identify the most effective ways for companies to make clear to investors their exposure to climate risk by the end of this year.
The pressure is now on watchdogs across the world to make sustainability reporting the new gold standard for financial management.
Since COP21, Goldman Sachs and JP Morgan have taken steps to move away from coal financing, an industry they perceive to be in “irreversible” decline. The World Bank too is changing, Jim Kim admitting Paris had forced it to rethink its economic model.
John Roome, the World Bank Group’s Senior Climate Director, has correspondingly updated their climate change action plan.
This means mobilising more investment into adaptation and building climate resilience worldwide whilst providing support for developing country implementation of their NDCs.
Joining the dots
We have to join the dots between long-term climate obligations and infrastructure decisions if we are to build smart, modern economies.
The New Climate Economy Commission found that the global infrastructure investment decisions in the next 15 years will determine the future of the world’s climate stability.
Crucially, the Commission also found that business as usual is impossible: either we lock in the high carbon investment and with it, catastrophic climate change; or we unleash investment in clean technology that can build prosperous and climate resilient societies for those six million young people looking for a better future.
The Paris Agreement and the Sustainable Development Goals offer the world a huge opportunity.
They both outline a clear demand for financial reform to help implement transformational visions.
As major economies confirm the trend of decoupling prosperity from carbon emissions, this week’s gathering is a key moment for finance ministers and institutions to embrace their role in aligning the climate and development agendas.
The decisions taken here must be both economically and environmentally sustainable – and they must boost action now.
Barry Gardiner MP is Labour’s shadow energy and climate change minister. He tweets @BarryGardiner