Sustainability Is Only Path to a Profitable Future
In September, the world agreed on new ambitious World Development goals. With this momentum we moved toward the COP21 climate summit in Paris, where it is clear that the world needs to act to keep the temperature rise below 2 degrees in 2100. Paris will be a test for all countries. We will all have to make tough compromises, but we need to make them and be ambitious — and not send a huge unpaid bill to our grandchildren.
To succeed — now and after Paris, where the real hard work begins — we need to do many things. I will focus on the need to develop innovative climate financing and more private-sector involvement, better market conditions and better sharing of solutions and best practices.
We need to develop innovative climate financing. To meet the target of 100 billion USD a year for climate finance, we have to rely more on the private sector to make investments in developing countries. Governments cannot and should not provide all the necessary finance. To speed up private-sector investment in climate-friendly solutions, we must develop new financing mechanisms that combine public and private funds. We must use public funds in a smarter way, so they help reduce the risks that prevent investors form entering developing markets.
We have as an innovative public-private partnership created the Danish Climate Investment Fund (DCIF), with a total capital of around USD 190 million. Sixty percent of the fund’s capital are provided by institutional investors. In Kenya, the fund has for example invested millions in the Lake Turkana Wind Farm that will be able to cover 15% of Kenya’s electricity production. The fund is expected to generate investments up to 1.4 billion USD in the coming years. We must scale such initiatives up to mobilise —> Read More