Environment Ministers Meet to
Accelerate Transition to a Low Carbon Society
Huge Investment Opportunities in
Energy Savings to Renewables and Reduced Deforestation
to Climate Proofing if Markets can be Mobilized
10th Special Session of the UNEP
Governing Council/Global Ministerial Environment
Forum-Principality of Monaco 20-22nd February
Monaco/Nairobi, February 2008
- More than doubling annual improvements in energy
efficiency could play a key role in averting
catastrophic climate change, a report to environment
Over recent years advances and
investments in energy savings in areas from transport
and power generation to industry and households has been
reducing the intensity of energy used by one to one
and-a-half per cent a year.
"If the rate of energy efficiency
improvement could be increased to 2.5 per cent
world-wide it would be possible to keep carbon dioxide
concentrations in the atmosphere below 550 parts per
million (ppm) through the end of the century," the
The Intergovernmental Panel on
Climate Change (IPCC), 2,000 plus scientists established
by UNEP and the World Meteorological Organisation to
advise governments, estimates that to avoid dangerous
climate change emissions need to be stabilized at
between 535 to 590 ppm in 2050.
An increase in investments in low
carbon and renewable energies is also underway which, if
accelerated and fostered widely could also assist in
meeting global climate change targets alongside helping
to achieve the Millennium Development Goals.
Currently close to 60 countries
have targets for renewables including 13 developing
countries while around 80 have market mechanisms in
place-feed-in tariffs and renewable portfolio standards-
to encourage renewable energy development.
These policy measures are playing
an important role in driving national and global
In 2007, financial transactions in
the sustainable energy sector reached $160 billion up
from just over $100 billion in 2006.
A fundamental change is also
emerging in terms of the range of investors entering
"The quickest growth in sustainable
energy capital mobilization has come from four sectors
that had previously shown little interest-venture
capitalists and private equity investors; public capital
markets and investment banks," says the report being
presented to the annual gathering of environment
ministers at UNEP's Governing Council-Global Ministerial
Environment Forum (GC/GMEF) in Monaco.
The rise in such investments is not
only triggering new business opportunities in both
developed and developing countries while contributing to
countering the increase in greenhouse gases.
The new report, drafted to assist
the ministerial discussions, notes that more than 2.3
million people now have jobs in the renewable energy
sector versus around 2 million in oil and gas and four
million in the global air transport industry.
Achim Steiner, UN Under Secretary
General and UNEP Executive Director, said: " A
transition to a low carbon society and a Green Economy
is underway driven by the science and treaties such as
the Kyoto Protocol and prospects, emerging as part of
the Bali 'Road Map', of an even more deeper and decisive
emissions reduction regime post 2012".
"UNEP is among a variety of key
players catalyzing this transition and overcoming
barriers through partnerships with the financial
services sector and industry. Pioneering work with local
banks to offer low cost solar loans in India has brought
clean energy to 100,000 people within three years," he
"An initiative to provide seed
money for clean energy entrepreneurs has spawned close
to 50 new enterprises in Africa, China and India. The
Principles for Responsible Investment, facilitated by
the UNEP Finance Initiative and the UN's Global Compact,
has secured the support of over 275 institutions
handling assets of over $13 trillion dollars," said Mr
"Among the challenges facing
ministers in Monaco is how to accelerate this
transformation to ensure that it is far reaching,
widespread and above all speedy. Separate but related
challenges include securing the billions of dollars of
additional funding needed to assist developing economies
to adapt to the climate change already underway
alongside the incentives or markets and mechanisms that
will be needed to reduce emissions from deforestation
and degradation," he added.
"The UN climate convention
estimates that an additional $200 to $210 billon will be
needed to return emissions to 2004 levels and perhaps as
much as close to $200 billion for adaptation measures.
Mobilizing this funding on a reliable and consistent
basis would appear to be a bargain given the wide
social, economic and environmental benefits that will
flow-and indeed already area flowing- from such policy
decisions," said Mr Steiner.
The Climate Challenge
Mitigation -In order to meet
the stabilization target, global emissions of greenhouse
gases will need to decrease in 2050 by 18 to 29
Giggatonnes (Gt) of carbon dioxide with such emissions
peaking even earlier somewhere between 2010 and 2030.
A variety of recent assessments
such as the Stern review; ones by the IPCC and others by
the UN Framework Convention on Climate Change (UNFCCC)
put the costs of stabilization at between 0.3 per cent
up to four per cent of global GDP.
Stern estimates it at one per cent
of global GDP costing around $134 billion in 2015 rising
to $930 billion in 2050.
Adaptation -The UNFCC
estimates that, by 2030, the additional investment costs
of adaptation will include $14 billion for agriculture,
forestry and fisheries; $11 billion for new water supply
infrastructure; $5 billion for treating a higher
incidence of diarrhea, malnutrition and malaria; $11 for
beach nourishment and dykes to defend coasts and between
$8 and $130 billion to adapt vulnerable
How are Investment Trends Going
There are encouraging signs-wind
power for example now receives more investment than
large scale hydro and nuclear according to a report by
UNEP's Sustainable Energy Finance Initiative and New
"In some instances renewable
subsidiaries have become too large for parent
companies". For example, the Spanish utility Iberdrola
spun off its renewables in December 2007 giving it a
capitalization of $33 billon.
. Over 20 per cent of new
investment in renewable energy is in developing
countries. In terms of global investment China, India
and Brazil are taking the lion's share with nine; five
and four per cent in 2006.
. Renewables now provide over five
per cent of global generation and 18 per cent of new
investment in power generation.
. Estimating investment in energy
efficiency is harder because it is normally financed
internally. UNFCC estimates that in 2005 $1.5 billion
was spent globally in investments in energy efficiency.
In a separate but related indicator UNEP estimates that
over $1 billion was invested in energy efficiency
technology development in 2006.
. Investments in large scale hydro
and nuclear amounted to over $44 billion in 2005. In the
United States support for nuclear amounts to 2.5 cents
per unit of electricity generated whereas wind power,
biomass and geothermal receive tax credits worth 1.9
cents per unit.
. The UNFCCC estimates that, by
2030, carbon capture and storage may be part of 70 per
cent of new coal and over a third of new gas power
generation equal to over $60 billion of additional
. The Clean Development Mechanism
of the Kyoto Protocol in 2006 mobilized investment in
renewables and energy efficiency projects worth close to
$6 billion, roughly equal to the level of funds from
Overseas Development Assistance or Official Development
Assistance in the same areas.
. Voluntary carbon offset markets,
outside the formal markets, was worth $55 million to
$200 million in 2006.
. Investment funds dealing in
carbon, which either buy emission reductions or finance
low carbon projects, now number around 60 valued at
about $12 billion.
. Emissions' trading, developing
mostly as a result of the European Union's Trading
Scheme, saw 362 million tones of C02 traded in 2005
worth around seven billion Euros.
. Over the past five years, the
World Bank Group and regional development banks have
together invested over $17 billion in projects that
lower carbon emissions in developing countries. In 2007,
the World Bank increased financing for renewable energy
and energy efficiency by close to 70 per cent to $1.4
. Bilateral funding through bodies
such as the Danish; French and Swedish development
agencies and institutions such as the German development
bank KfW and the Japanese Bank for International
Co-operation is becoming more active. KfW for example
has earmarked $1.9 billion for renewables for
. UNEP's African Rural Energy
Enterprise Development programme, alongside similar
initiatives in Brazil and China, has provided seed
financing for 45 clean energy companies since 2000.
. The Global Environment Facility,
whose implementing agencies are UNEP, UNDP and the World
Bank, has funded climate mitigation projects worth $2.5
billion-one of the latest seeks to develop geothermal up
Africa's Rift Valley by underwriting the risks of
drilling for steam.
. UNEP, working with two Indian
banks, has developed a household consumer credit market
that has brought solar power to 100,000 people on the
sub Continent. The initiative is now self-financing and
set to be piloted elsewhere.
. Under an Italian-funded
programme, UNEP has worked with banks in Morocco and
Tunisia to develop lending programmes for solar water
heaters with similar programmes under development for
Albania, Algeria, Chile, Indonesia and Mexico.
. The decision at the last climate
convention meeting in Bali to include Reduced Emissions
form Deforestation and Degradation (REDD) opens the door
for forests to be more widely factored into mitigation
. The Government of Norway has
announced it will provide $2.7 billion over the next
five years as incentives for REDD.
How are Investments in
Investments are beginning to flow
for adaptation or 'climate proofing' economies. There is
now an urgent need secure and target additional funds to
assist developing and least developed economies.
. The Adaptation Fund of the Kyoto
Protocol is funded from a levy on the proceeds of the
Clean Development Mechanism. The Fund is expected to
have annual flows of between $80 million to $300 million
. The Least Developed Countries
Fund had, in late 2007, pledges of just over $160
. The Special Climate Change Fund,
which includes provisions for technology transfer had,
at the same time, pledges of just over $70 million.
. An estimated $7 billion is spent
annually on ecosystem protection. But the funds are not
specifically for climate change and nearly 90 per cent
is being spent in developed countries.
. Some commercial adaptation
instruments are now being developed. The UN's World Food
Programme have partnered with the reinsurer AXA to
develop weather derivatives that pay out to Ethiopian
farmers in the event of severe drought.
. Swiss Re, a member of the UNEP
Finance Initiative, has launched a Climate Adaptation
Development Programme to provide financial protection to
up to 400,000 people in 10 countries in Africa from
Accelerating the Transition
through New and Forward-Looking Policy Decisions that
Improve the Financial Flows and Mobilize the Necessary
A New Climate Deal in
. A post 2012 emissions reduction
regime that cuts greenhouse gases by 25 per cent to 40
per cent is essential as it will put a higher price on
. Removing fossil fuel subsidies
could reduce C02 emissions by five to six per cent
annually. Currently, fossil fuel subsidies amount to up
to $200 billion a year versus support for low-carbon
technologies of an estimated $33 billion annually.
Research and Development
. Boosting research and
development. The International Energy Agency estimates
that R+D for low emission innovations such as renewables
and energy savings declined by 50 per cent between 1980
. In order to achieve a
stabilization target of 550 parts per million, support
for innovation needs to rise from just over $30 billion
to $90 billion by 2015 and to $160 billion by 2025
according to some experts.
. Increase global targets for
energy efficiency improvements to 2.5 per cent
. These should be supported by
policies including stronger energy savings building
codes for new and existing structures; penalties or
disincentives for builders to choose the cheapest, least
energy efficient designs, materials and gadgets;
policies that promote mass transit especially rail and
international minimum performance standards for
industrial and household appliances.
. Other measures include the
promotion of utility pricing that favours energy
efficiency; promotes combined heat and power and
improves energy savings in existing power plants and
electricity transmission infrastructure.
. Policies that increase the uptake
of renewables may include 'feed-in laws' that guarantee
a fixed price for each unit of renewable electricity
generated; regulations that boost access to the Grid;
incentives for second generation biofuels and ones that
address other barriers including resource
mapping-UNEP/GEF's Solar and Wind Energy Resource
Assessment is a good example of the latter.
. Government agencies and donors
need to develop and deploy new forms of 'end-user'
credit schemes to assist consumers to purchase climate
mitigation technologies and systems-UNEP's solar credit
loan in India is a good example.
. New approaches are needed to
assist small to medium-sized enterprises innovate
including enterprise development services and seed
. Particular attention needs to be
paid to new financial and regulatory solutions that
address the lack of local currency financing in least
developed economies-this is effectively shutting out
such economies from low C02 emitting infrastructure
. Harnessing the 'green
procurement' potential of local authorities through
financial incentives that stimulate voluntary low carbon
. Public investments are needed to
mobilize finance for adaptation given that market
mechanisms are in their infancy.
. Other actions for adaptation
include regulations to limit the vulnerability of new
investments and infrastructure such as bans on building
in flood prone areas and new, labour intensive,
programme to 'climate proof' rural areas that improve
resilience of local populations; address poverty; boost
incomes and increase the skills base.
Notes to Editors
The 10th Special Session of UNEP's
Governing Council/Global Ministerial Environment Forum
will take place between 20 and 22 February in Monaco. http://www.unep.org/gc/gcss-x/
The theme is Globalization and the
Environment-Mobilizing Finance to Meet the Climate
The report upon which this press
release is based can be found under Official Documents
The meeting will be preceded on 19
February by the 9th Global Civil Society Forum http://www.unep.org/civil_society/GCSF/indexGCSF9.asp
In addition the GC/GMEF will
discuss international environment governance under the
current UN reform debate as well as seek to adopt
decisions on a range of issues from UNEP's Medium Term
Strategy to...(looking for the list of draft
Monaco, the Host Country's web site
is at http://www.unep2008.gouv.mc/pnue/wwwnew.nsf/HomeGb
Media are welcome to attend the GC/GMEF.
Three press conferences are
20 February-Findings from the UNEP
Year Book 2008 and Findings from Green Jobs Initiative
21 February-Launch of a new Climate
Neutrality Initiative involving Countries, Corporations
22 February-Launch of a New Report
on the Threats Climate Change Pose to the World's
Fisheries and Oceans
Side events -Nine
news-worthy and informative side-events are scheduled
1- High-level Roundtable on Climate
Change and Trade (World Trade Organisation and UNEP)
2- UNEP Scientific Initiatives:
Atmospheric Brown Cloud and Agricultural Assessment.
3- UNEP experience in designing
financial mechanism for climate change mitigation.
1- Launch of the Global Strategy
for Follow up to The Millennium Ecosystem Assessment
2- Harnessing GEF catalytic
financing for advancing global environmental issues.
3- Supporting Local Authorities -
combining the event "Financing for the sustainable
building sector" with "The UN, regions and local
authorities: a new alliance in response to Climate
Friday 22 February
1- Green Jobs
2- Oceans, Coasts and Climate
Change (with the UN Foundation)
3- Private - Public bank Dialogue
"UNEP Finance Initiative".
For More Information Please
Contact Nick Nuttall, UNEP Spokesperson and Head of
Media, on Phone:+ 254-20 7623084; Mobile in Kenya: + 254
(0) 733 632755
Mobile when traveling: +41 79 596
57 37; Email: email@example.com
Mr. François Chantrait, Directeur.
Centre de Presse
10 Quai Antoine 1er, 98000 -
MONACO, Phone: + 377 98 98 22 08