Client Alert: COP27 Update #3
Yesterday was billed as “Build 4Tomorrow by financing the building transition. The Urban Land Institute, whose board I sit on, led a panel focused on accelerating decarbonization by integrating the true cost and opportunity into real estate decisions. This was based on prior research that I was involved in. This, it turns out, was the easy part of the day.
The harder part is how to unlock the capital needed to address climate change and in particular how to help poorer countries mitigate the impact of richer countries’ industrialization. This is the Global North versus Global South crisis I mentioned a few days ago. Given that the Global North didn’t put up the $100 Billion it promised two years ago to fight climate change there are many sceptics in Sharm El-Sheikh, but there are a few ideas floating about that are getting attention:
The Bridgetown Initiative put forward by Barbados Prime Minister Mia Mottley this summer. This idea is focused on reforming the World Bank and IMF to make them more climate responsive. This idea that has gathered momentum is focused on getting the banks to increase climate finance. Given the US’ outsize vote, the White House plays a key and supportive role, but already leaders like President Macron have shown support. This is an idea to refocus existing capital and institutions.
The John Kerry Carbon Credit Proposal. Depending on who you ask this either is facing hurdles (Wall Street Journal) or benefits from support from groups like the Rockefeller Foundation, Bezos Earth Fund, PepsiCo and Microsoft (Washington Post and New York Times). The outline is fuzzy and details scarce, but it does have a level of support and represents new capital being brought to this challenge.
What both are intended to do is to show a path to aggregating the massive amount of capital that countries must have to address the impact of climate change.
Tomorrow President Biden will attend COP27 in Egypt bringing the weight of the US commitment to the meeting, but he will be expected to bring new funding and increased climate commitments.
And if you didn’t watch Al Gore’s speech at the Opening of the COP27 from earlier this week, it is worth 15 minutes to hear his well-researched and thoughtful warning to the world’s leaders. Watch Here
