Finance climat : multiplier les chiffres ne suffit pas à résoudre l’équation

Une grande partie des discussions de la COP28 portera sur l’objectif de 100 milliards de dollars par an décidé à Copenhague pour soutenir les investissements climatiques dans les pays du Sud, et sur le nouvel objectif de financement du climat destiné à le remplacer. Cependant, tout en gardant les yeux rivés sur les volumes mis sur la table, nous devons également nous pencher davantage sur l’impact de chaque dollar dépensé. Il est essentiel d’identifier et d’exploiter la valeur ajoutée de chaque acteur économique afin d’éviter les chevauchements et de maximiser les synergies. Trois types d’acteurs ont un rôle central à jouer dans le changement de paradigme : les gouvernements, les institutions financières publiques et les institutions financières privées.

La COP28 se tient à un moment crucial, alors que les températures moyennes mondiales ont pour la première fois dépassé les objectifs fixés dans l’Accord de Paris de 2015 et que le monde – au premier rang duquel les pays en développement – subit les effets néfastes du changement climatique sur les populations et les économies. La COP28 marque également une étape importante dans la coopération internationale sur le changement climatique. Nous devrions y faire le point sur les progrès accomplis depuis 2015, date de la signature de l’accord de Paris, et préparer les prochaines contributions déterminées au niveau national (NDC) prévues pour 2025 afin de rehausser collectivement l’ambition. Les enjeux sont considérables.

Il en va de même pour les estimations impressionnantes des financements nécessaires au développement durable et à l’action climatique. Les derniers rapports (Bhattacharya et al.) suggèrent qu’il faudra mobiliser 1 000 milliards USD supplémentaires par an auprès de sources de financement externes (publiques et privées) jusqu’en 2030 pour financer les 2 400 milliards USD d’investissements annuels nécessaires pour le climat et la nature dans les pays en développement (à l’exclusion de la Chine). Le reste devra être trouvé par la mobilisation des ressources nationales. C’est peu dire qu’il s’agit d’un défi.

Une grande partie des discussions de la COP28 portera sur le nouvel objectif collectif quantifié (NCQG) en matière de financement climatique, destiné à remplacer l’objectif de financement climatique de 100 milliards de dollars par an décidé à Copenhague pour soutenir les investissements climatiques dans les pays du Sud. Ce nouvel objectif est essentiel pour garantir un changement d’échelle dans le volume des investissements. Cependant, ces discussions risquent d’être complexes en raison du contexte géopolitique difficile et de la méfiance croissante des pays du Sud, qui attendent toujours que l’engagement précédent de 100 milliards d’USD/an soit respecté. Ils attendront du NCQG qu’il soit ambitieux et juste, qu’il évite d’alourdir le fardeau de la dette et qu’il garantisse une répartition équitable entre les pays et les secteurs qui en ont le plus besoin (Pauw et al.).

Mais multiplier les chiffres ne suffira pas à résoudre l’équation. Nous devons prendre du recul et, tout en gardant les yeux rivés sur les volumes mis sur la table, examiner de plus près l’impact de chaque dollar dépensé. L’argent n’est pas infini, en particulier l’argent public. Des mécanismes financiers innovants et des politiques favorables seront essentiels pour attirer le secteur privé et investir chaque dollar disponible d’une manière qui soit compatible avec un développement à faibles émissions et résilient. Cet objectif de rendre tous les flux financiers cohérents avec une voie vers de faibles émissions de gaz à effet de serre et un développement résilient au climat est intégré dans l’Accord de Paris (article 2.1(c)) et sera discuté lors de la COP28. L’ajout d’un prisme qualitatif à la discussion implique d’examiner la situation globale pour comprendre d’où vient l’argent, où il va (I4CE) et de concentrer les efforts sur la réorientation des investissements qui nuisent au développement durable vers des investissements qui sont cohérents avec les objectifs de l’accord de Paris. L’identification et l’exploitation de la valeur ajoutée de chaque acteur de l’économie est une partie essentielle de l’exercice, car elle permet d’éviter les chevauchements et de maximiser les synergies dans le financement des voies de développement à faibles émissions et résilientes. Trois types d’acteurs ont un rôle central à jouer dans le changement de paradigme : les gouvernements, les institutions financières publiques et les institutions financières privées.

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First, governments are Parties to the Paris Agreement and the leading actors of its implementation.

Their individual commitments – translated into NDCs – set the collective ambition of the Agreement and define the reference country development pathways for investors to consider. These commitments taken on the international scene, including on quantified objectives for aligned or misaligned activities (e.g. fossil fuel phaseout), engage public level action and provide clear signals to other actors on where the transition is headed and which investments are at risk of becoming stranded.

The impact of these commitments drastically increases if they are associated with concrete action by governments to align public finance by increasing finance for climate action while eliminating negative investments. This involves translating NDCs into Long-term Strategies (LTS) and further breaking them down into financial transition plans. It also requires the creation of conducive environments – through both regulations (e.g. financial regulation on climate-related risk disclosures and macroprudential risks, public procurement, etc.) and incentives (e.g. compliance carbon pricing instruments, public subsidies, etc.) – to make local and foreign investments happen and stop harmful and locked-in investment (such as fossil fuels or imported deforestation).

COP28 will allow governments to take public commitments to raise their ambition. These will likely include announcements on improved NDCs and sectoral announcements (e.g., targets on renewable energy, fossil fuels, forest conservation etc.). The question is how ambitious these engagements will be and if they will they be in line with the Paris Agreement’s core objective of “limiting a global temperature rise well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5°C ».

Second, Public Developments Banks (PDBs) – be they national or international – have a key supporting role to play in financing a low-emission and resilient transition.

As the main financing arm of governments, they are instrumental in addressing some of the main investment barriers that prevent the market from effectively responding to the risks and opportunities posed by climate change (such as the high cost of capital and market accessibility for medium and small size enterprises). In addition to this countercyclical role, PDBs also fill the space where the private sector won’t go because of its specific constraints and risk/return expectations. As such, PDBs are seen as key providers of concessional funds for projects with crucial development impacts, such as social infrastructure, adaptation projects, and loss and damage finance. As the impacts of climate change increase, the funds needed for these projects will continue to escalate. Despite all the efforts made to better leverage the balance sheet of PDBs – impelled by the G20’s Independent Review of Multilateral Development Banks’ (MDBs) Capital Adequacy Frameworks – the money available through PDBs will not suffice to change the trajectory the world is taking if it is used in a constant manner. Transformational action is required to maximise the impact of every dollar spent by PDBs on low-emission and resilient development pathways.

PDBs, particularly MDBs and Development Finance Institutions (DFIs) are ideally placed to support ambitious government action – for example through technical cooperation and policy-based lending for the development of LTS – and support systemic changes – for instance of the financial sector through engagement, capacity building and standard setting. Hand in hand with governments, they are the main guarantors of orderly pathways as they have the capacity to address some of the main consequences of the transition (locked-in assets, social impacts, biodiversity loss, etc.). Coordination (international and local) is critical to meet the last mile and ensure that local populations are included and involved in the transition.

A reform of international PDBs is underway – as incarnated by the World Bank’s evolution roadmap, which seeks to adapt the institution’s mission, operations and resources to the challenges of today’s world. New approaches and tools are being tested to increase the impact and efficiency of international cooperation and to strengthen the role of EMDEs in the transition. The Bridgetown Agenda catalyses some of the main asks of EMDEs who collectively push for governance and financial reform of the international financial system for vulnerable countries to have a voice and adequate support to face the climate crisis (avoiding new layers of vulnerability induced by increased debt burdens).

COP28, will hopefully confirm that a change in practice of international PDBs is on its way with some announcements to be expected on support to the development of ambitious country strategies (through LTS facilities) and on country-level collaboration (through country platforms), among others.

Last, private financial institutions are not directly bound by the Paris Agreement but have a key role to play and have progressively been involved in the achievement of its objectives.

At COP 26, in Glasgow, a group of financial institutions came together under the Glasgow Financial Alliance for Net Zero (GFANZ) to contribute to accelerating the decarbonisation of the economy, thereby acknowledging their role in achieving Paris Agreement objectives. As a result, some important commitments were taken by the private sector to reach net-zero emission targets at a given point in time. Dedicated regulations have simultaneously begun to be implemented (e.g. in Europe) to compensate some of the weaknesses of voluntary action (lack of ambition, challenges associated with measuring and reporting, etc.). In the space of two years, dedicated methodologies have been developed to walk the talk of decarbonisation. But, despite these recent developments, much work still needs to be done to align all the activities of private financial institutions, so that they stop financing harmful projects at the very least and effectively contribute to a low-emission and resilient development at the very best.

This important paradigm shift involves the systematic integration and continuous improvement of climate-related risks and opportunities management (transition and physical) and the identification of investment opportunities pushing the development of mitigation and adaptation solutions by invested corporates. Under the right conditions (economic, institutional, legal, etc.) significant volumes of finance can be invested by the private sector to fund projects with climate co-benefits, and – conversely but as importantly – be divested from assets with negative impacts on climate change.

So, at COP28, we will also be watching out for progress on the ambition of private financial actors and for improved guidance for them to live up to their commitments.

Every actor has something to expect from the negotiations that will resume next Thursday in Dubai, but governments, PDBs and private financial institutions will be at the forefront of the discussion as the key actors in financing the transition. Their commitments will be scrutinised by EMDEs, who as main recipients of climate and development finance will judge their ambition and credibility as signs of trustworthiness. Agreements on an ambitious NCQG, an effective and just Loss and Damage fund and a comprehensive Global Adaptation Framework are some of the positive outcomes that could restore confidence in the increasingly fragmented international financial system – which is already embarked in a long process to adapt to the new face of the world today.