At the World Economic Forum (W.E.F) Annual Meeting 2013 in Davos, Switzerland last week there was both good and bad news. Though dire warnings were issued about the dangers of climate change, financial instability, and rising food prices. There were also positive proposals outlining how governments can use public funding to stimulate private investment in green technologies.
The new president of the World Bank, Jim Yong Kim, highlighted a recent report that predicted global temperatures could rise by 4 °C within decades. “My children could be living in a world that doesn’t even resemble the one we live in now,” he said.
There are positive signs that businesses are already paying serious attention to climate change. Nearly 700 of the 2415 companies surveyed in the recent Carbon Disclosure Project in London were already investing in emissions cuts, and 63 per cent of those companies said they were doing so because climate change was a physical risk to their business. 70 per cent of all companies surveyed believed climate change could significantly affect their revenues particularly through supply chain disruption from severe weather.
Currently, the world’s governments spend $96 billion a year tackling climate change. However, according to the Davos Green Investment Report, $700 billion of investment every year will be needed in order to cut greenhouse gas emissions to a safe level, while still allowing economic growth.
The key issue is how to meet the shortfall in funding. The 2008 financial crisis has slashed public funds “We just don’t have that much public money,” said Dominic Waughray, a senior director of the WEF in Geneva, Switzerland, and one of the authors of the report. However, Waughray presents a solution saying that governments can encourage big businesses to step up. The WEF report estimates that if public spending is increased to $130 billion, then governments could use that to unleash a potential $570 billion a year of private capital.
This is the story behind The Catalyst fund set up by The International Finance Corporation, part of the World Bank and launched in Davos. Its aim is to help companies that are tackling climate change by, for instance, building renewable power plants or boosting energy efficiency. Rather than using public money to fund projects like wind farms outright, the aim of the fund is to attract private investors by providing them with a financial safety net reducing their risk and covering any potential losses in the same way that public money already provides this kind of security to major infrastructure projects. Though still in its early days the fund has already raised $280 million.
Sources include The New Scientist.
TJC provides professional translation and interpretation services with specialists working in environmental studies, business, finance and economy, and governmental and policy-making fields. Indeed, our level of specialism coupled with excellent customer service accounts for our ever-expanding list of clients from around the world. For further information about what we can offer your organisation, please visit our website or contact us. You can also visit our sister site for professional Japanese translation and interpretation services and our blog guide to doing business in Japan.