Mark Carney calls for regulations around net zero

(Bloomberg) — Mark Carney, the former Governor of the Bank of England and co-chairman of the world’s largest climate finance coalition, urged governments to create frameworks that encourage financial market participants to commit to reducing emissions.

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Governments will play a key role in “unlocking” private capital, Carney said during a panel discussion at the COP27 climate summit in Egypt on Wednesday. Policymakers should “align financial regulation with net zero” by making net zero transition plans mandatory, he said.

Carney made the comments on the summit’s Finance Day, which will be slimmer than in Scotland last year after several prominent managers, including Larry Fink of BlackRock Inc. and Jane Fraser of Citigroup Inc., opted to stay away. This comes as climate finance faces mounting obstacles.

An energy crisis and a changing political landscape in the US are making it harder for banks and investors to turn their backs on fossil fuels. Financial firms are also increasingly nervous about the legal implications of joining net-zero alliances, with some in the US arguing that such goals conflict with fiduciary duties. And in some cases, climate finance alliances have even been likened to cartels.

Read more: Blackstone, Pimco Sidestep Net-Zero Group even after concessions

These legal risks may intensify depending on the outcome of the US midterm elections. But there’s also a legal risk involved in making climate promises that companies don’t keep.

“Companies should be wary of being caught up in the tide of unrealistic ambitions, as it can expose them to litigation and reputational risks if they fail to deliver on these commitments,” Sonali Siriwardena, partner and global head of ESG at Simmons & Simmons in London. .

GFANZ recently allowed members to ignore a UN-backed group, Race to Zero, which had proposed binding restrictions on mineral financing. He also assured the signatories that the GFANZ sub-alliances “are subject only to their own governance structures”.

The alliance now has about 550 members representing about $150 trillion in assets. AllianceBernstein Holding LP, Northern Trust and Capital Group Inc. are among the latest to join the GFANZ subgroup for asset managers, according to a statement on Wednesday.

(GFANZ is co-chaired by former Bank of England Governor Mark Carney and Michael R. Bloomberg, founder of Bloomberg News parent Bloomberg LP.)

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Here are the latest developments. All seasons of Egypt.

Georgieva says climate success depends on economic ‘incentives’ (10:15am)

Kristalina Georgieva, managing director of the International Monetary Fund, said the financing needed to tackle climate change and the energy transition will not flow without changing incentives for donors. And “the best incentive we have to move from high to low carbon intensity is the price of carbon,” he said.

The average price of coal worldwide is $5, but to be at the level that “changes investment and consumer behavior” it would have to rise to at least $75 a tonne by 2030, he said.

“Adam Smith, the founder of economics, said it: the butcher and the baker don’t feed you out of the generosity of their hearts, they feed you out of self-interest,” he said. “That’s how we need to build interest in decarbonizing.”

Conservative estimate raises 2030 funding gap to $2.4 trillion (9:51 am)

There is a funding gap of about $2.4 trillion compared to what is needed by 2030, and this represents “the most conservative number,” said Mahmoud Mohieldin, the UN’s High-Level Climate Change Champion for COP27 .

Serious debt reduction mechanisms are needed, and multilateral development banks and international financial institutions must play a greater role in supporting such efforts, he said.

Mohieldin also said he was “very happy to see a GFANZ chapter being established for Africa with a serious mind to be practical and support a range of projects”.

Africa Recognizes Need to Pursue Green Growth (8:43 am)

Africa’s common position at the COP27 summit recognizes the need for development alongside the task of providing electricity to its 600 million people who do not have access to energy, UN Economic Commission for Africa Executive Secretary Antonio Pedro said. This energy deficit is why the continent is promoting natural gas as a “transition fuel,” Pedro said in an interview with Bloomberg Television.

While pursuing so-called loss and damage — compensation from rich countries for damages sustained by developing countries due to global warming — Africa is also promoting investment in renewable energy, Pedro said. He cited as an example the Great Blue Wall Initiative, which aims to protect 2 million square kilometers of protected and conserved areas along the East African coast.

Affordable debt would be a success of COP27, says Egypt’s Maait (8:38 AM)

A world plagued by inflation, mounting debt and growing climate impacts needs development banks to step up, said Mohamed Maait, Egypt’s finance minister. “More funding at a reasonable cost and on reasonable terms,” ​​Maait said would be seen as a success at COP27.

Egypt, Norway to build 100MW green hydrogen plant in Red Sea (08:12 AM)

Egypt and Norway’s Scatec signed an agreement on the sidelines of climate talks in Sharm El Sheikh to launch the first phase of a project to build a green hydrogen plant in the Red Sea. The plant in Egypt will have a capacity of 100 megawatts.

Net-Zero Asset Managers Group says Alliance has grown to 291 (8:00am)

The Net Zero Asset Managers Initiative says 86 investors have set initial targets for the percentage of assets they will manage in line with achieving net zero emissions by 2050 or earlier, with the total number of asset managers committing to net zero to increases to 291.

That brings to 169 the total number of managers with such targets, representing a total of more than $55 trillion in assets under management, NZAMi said in a statement on Wednesday. New signatories include Capital Group, Northern Trust and AllianceBernstein.

Zimbabwe signs deal with SkyPower for 500MW solar plant (7:47am)

Zimbabwe has signed an agreement with SkyPower Global to build a 500 megawatt solar power plant, UN Economic Commission for Africa Executive Secretary Antonio Pedro said in an interview.

The agreement was signed at the COP27 summit being held in Sharm El Sheikh, he said, without elaborating.

World’s CO₂ hotspots identified by Al Gore-backed project (7:00am)

A consortium of dozens of research nonprofits on Wednesday launched a free online platform detailing global greenhouse gas emissions across 20 economic sectors.

Climate Trace, which can be viewed in a web browser, includes a zoomable world map that displays and ranks the dirtiest 72,000 power plants, oil refineries, airports, ships and more. The team used satellite imagery and machine learning as well as more conventional techniques to create what it says is the largest source of greenhouse gas emissions data available.

Climate change could cost Africa two-thirds of its GDP growth (02:01 am)

Global warming could cut Africa’s economic growth by two-thirds by the end of the century unless major investments are made in climate adaptation, a new study suggests.

Current climate policies will likely see temperatures exceed the pre-industrial average by 2.7 degrees Celsius, reducing Africa’s growth rates by 20% by 2050 and 64% by 2100, Christian Aid said in a report released on Wednesday. Even an increase in temperature of 1.5 degrees Celsius would reduce growth rates by 34% by the end of the century, it said.

While Africa is responsible for about 4% of the planet’s warming emissions, it has already been hit hard by a changing climate. Devastating cyclones and floods have hit southeast and west Africa this year, while the Horn of Africa is in the midst of its worst drought in four decades.

–With assistance from Salma El Wardany, Yousef Gamal El-Din, Paul Richardson, Mirette Magdy, Akshat Rathi and Siobhan Wagner.

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