Saturday, November 29, 2014

US Financial Support of Green Climate Fund Is in America's Interest

Clipper Windturbines installed in Mexico; Walmart. (Credit: Flickr) Click to Enlarge.
The U.S. and other countries have pledged initial resources to help the Green Climate Fund (GCF) spur emissions reductions in developing countries and assist the most vulnerable in adapting to the impacts of climate change.  The U.S. pledge of $3 billion is a serious commitment to helping achieve a strong climate agreement next year.  The U.S. joins other countries that have already pledged to the GCF and more countries are expected to pledge in the coming days.  This new fund is in America’s interest.  It helps spur global action on climate change that is damaging the U.S. and countries around the world, it helps companies tap into the growing demand for clean energy, and minimizes the need for even greater investments to clean up the mess of extreme weather damages around the world.
The U.S. contribution is in America’s interest as the GCF will help:
  • Spur global clean energy deployment, creating new markets for renewable energy and energy efficiency companies.  Leading U.S.-based companies are already tapping into the growing clean energy market and more are poised to join.  U.S.-based companies have already taken advantage of the predecessor funds ranging such as Iowa based Clipper Wind securing a purchase of 27 wind turbines thanks to a wind project in Mexico supported by the Clean Technology Fund.

    The GCF will help speed up these markets by working with key countries to develop tangible projects that will help transform markets for wind, solar, energy efficiency, and geothermal around the world.  For example, a GCF clean energy project will include resources for transformative renewable energy projects that combine small public-sector investments in a particular large-scale renewable energy project (e.g., a wind or solar farm), financial tools that help leverage large private sector financing for the project, and necessary policy reforms to ensure that this project spurs wide-scale renewable energy deployment beyond the individual project.  You can see some elements of this in the World Bank managed Climate Investment Funds where every $1 of public financing from the fund has spurred almost $6 of other financing from the private sector and the budgets of the recipient countries.
  • Increase the resilience of the most vulnerable countries to the impacts of climate change, avoiding much larger costs.  Countries around the world are already feeling the impacts from extreme weather events caused by climate change and these impacts will get worse if critical steps aren’t taken.  The U.S. is always one of the first to respond to such disasters as witnessed with the response to the recent typhoon in the Philippines and Ebola in Africa.  And evidence from disaster response around the world shows that spending $1 today helps avoid around $7 of investments needed after the disaster hits.  Upfront and early funding to assist countries strengthen their resilience will help countries avoid damages from climate change.
  • Reduce deforestation emissions through efforts such as ensuring deforestation-free supply chains.  Deforestation is a major driver of climate change throughout the world.  There are emerging signs of progress with key countries such as Brazil significantly reversing their forest loss in recent years and major companies committing to end deforestation in their supply-chain by demanding products that aren’t driving deforestation.  The GCF will help such promising efforts into lasting reforms in key countries that will (hopefully) end deforestation by 2020.
Read more at US Financial Support of Green Climate Fund Is in America's Interest

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