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Towards a climate-neutral Europe: EU invests over €10bn in innovative clean technologies

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The Commission today announces an investment programme worth over €10 billion for low-carbon technologies in several sectors to boost their global competitiveness.

EU innovative climate action, as announced today, has a range of benefits for the health and prosperity of Europeans with an immediate, tangible impact on people’s lives – from the creation of local green jobs and growth, to energy-efficient homes with a reduced energy bill, cleaner air, more efficient public transport systems in cities, and secure supplies of energy and other resources.

Commissioner for Climate Action and Energy Miguel Arias Cañete said: “Less than three months after adopting our strategic vision for a climate neutral Europe by 2050, we are putting the money where the mouth is. Our objective is to keep building a modern, competitive and socially fair Paris-aligned economy for all Europeans. For this to happen, we will need deployment of clean innovative technologies on an industrial scale. This is why we are investing in bringing to the market highly innovative technologies in energy intensive industries, in carbon capture, storage and use, in the renewable energy sector and in energy storage. We are today unleashing technological solutions in all Member States and pressing the fast-forward button in our transition to a modern and climate-neutral society in Europe.”

The Commission wants to ensure that Europe continues to be at the top of the league as regards new high-value patents for clean energy technologies. This leadership provides a global competitive advantage, allowing Europe to harvest first mover benefits by increasing exports of European sustainable products and sustainable technology and business models.

On 28 November 2018, the European Commission adopted a strategic long-term vision for a prosperous, modern, competitive and climate neutral economy by 2050 – A Clean Planet for all. The strategy shows how Europe can lead the way to climate neutrality while preserving the competitiveness of its industries by investing into realistic technological solutions. This transition also requires further scaling-up of technological innovations in energy, buildings, transport, industry and agriculture sectors.

Next steps

The Commission aims to launch the first call for proposals under the Innovation Fund already in 2020, followed by regular calls until 2030.

Background

The Innovation Fund will pool together resources amounting to around €10 billion, depending on the carbon price. At least 450 million allowances from the EU Emissions Trading System (EU ETS) Directive will be sold on the carbon market in the period 2020-2030. The revenues of these sales depend on the carbon price, which is currently around EUR 20.

Any undisbursed revenues from the Innovation Fund’s predecessor, the NER 300 programme, will also be added to the Innovation Fund. Thus, the total endowment of the Fund can be around EUR 10 Billion.

The Innovation Fund aims to create the right financial incentives for companies and public authorities to invest now in the next generation of low-carbon technologies and to give EU companies a first-mover advantage to become global technology leaders.

The Innovation Fund builds on the experience from the NER300 programme, the current EU programme to support the demonstration of carbon capture and storage and renewable energy technologies. It expands its scope to also explicitly cover energy storage and energy intensive industries and is better tailored to promote innovation through an improved and simplified governance. It will offer grants to cover up to 60% of the additional capital and operational costs linked to innovation for the selected projects, disbursing the money in a flexible way based on the needs of individual projects.

In addition, following the Commission’s decision to reinvest the unspent funds from the first NER 300 call amounting to some EUR 487.6 million, the transfer of unspent NER300 funds to InnovFin Energy Demo Projects is now taking effect and the Commission confirmed that three existing projects can now benefit from a loan guarantee backed by funds from the NER300.

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The status of climate risk management in Latin American and Caribbean banks

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A survey among 78 financial institutions in Latin America and the Caribbean holding 54% of the total assets managed by the banking sector in the region, revealed that 38% of banks incorporate guidelines on climate change in their strategy and 24% have a policy on climate risk evaluation and disclosure.

The study entitled “How the Banks of Latin America and the Caribbean incorporate climate change in their risk management,” presented today during an online event, was prepared by the UN Environment Programme Finance Initiative (UNEP FI) and CAF – Development Bank of Latin America, with the collaboration of the Latin American Federation of Banks (FELABAN).

69% of the participant banks identified forestry and agriculture as the sector most exposed to climate risks, followed by the energy generation sector at 44%.  80% of the institutions recognized that the main physical risk to be incorporated in their risk evaluation and management was ‘flooding,’ followed by ‘drought’ (mentioned by 41% of the banks).

Banks in the region have an opportunity to improve the assessment of climate risks in their plans and strategies, with the aim of increasing their resilience and be better prepared to support the transition to low carbon economies.

According to the report, 41% of the institutions that took part in the survey recognized they do not have mechanisms to identify, analyze and manage climate risks.

The authors concluded that climate risks remain unmanaged mainly due to a lack of knowledge regarding the financial impact of climate change, and because of the absence of regulatory demands.

Banks in the region still tend to perceive climate risks from the perspective of how companies impact the environment, and not how exposed these companies are to climate threats. Considering the latter is key for financial institutions in the face of the expected increase in disasters and other impacts of extreme weather, the report notes.

According to the Intergovernmental Panel on Climate Change, given current concentrations and on-going emissions of greenhouse gases, it is likely that by the end of this century the rise in global temperature will exceed 1.5°C above preindustrial levels. This will come with higher sea levels and more frequent and intense climate disasters.

“During the last decade, banks in Latin America and the Caribbean have made significant progress in integrating sustainability criteria in their different areas of work. The study that we present today will also contribute to the timely management of climate risks in their financing portfolios,” said Julián Suárez, Vice President of Sustainable Development at CAF.

“Climate risk assessment is key to the goal of aligning the banking industry with a sustainable and equitable global economy in the 21st century, which becomes even more relevant today as we need to build back better after the COVID-19 pandemic,” said Eric Usher, Head of UNEP FI. 

The authors call to follow the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), and to replicate initiatives like the UNEP FI pilot project with 16 of the world’s leading banks to develop analytical tools and indicators that strengthen the assessment and disclosure of climate risks.

The survey revealed that 53% of the banks utilized the Sustainability Report as a mechanism to disclose risks linked to climate change, while only 16% reported through regulatory financial forms as advocated by the TCFD recommendations.

Due to the lack of knowledge regarding climate-related risks definitions, the authors also recommend the banking sector of Latin America and the Caribbean to prepare a common taxonomy on these issues.

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Five things you should know about disposable masks and plastic pollution

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The fight against plastic pollution is being hit by the COVID-19 pandemic, as the use of disposable masks, gloves and other protective equipment soars, but UN agencies and partners insist that, if effective measures are put into place, the amount of plastics discarded every year can be significantly cut, or even eliminated.

1) Pollution driven by huge increase in mask sales

The promotion of mask wearing as a way to slow the spread of COVID-19 has led to an extraordinary increase in the production of disposable masks: the UN trade body, UNCTAD, estimates that global sales will total some $166 billion this year, up from around $800 million in 2019.

Recent media reports, showing videos and photos of divers picking up masks and gloves, littering the waters around the French Riviera, were a wake-up call for many, refocusing minds on the plastic pollution issue, and a reminder that politicians, leaders and individuals need to address the problem of plastic pollution. 

2) A toxic problem

If historical data is a reliable indicator, it can be expected that around 75 per cent of the used masks, as well as other pandemic-related waste, will end up in landfills, or floating in the seas. Aside from the environmental damage, the financial cost, in areas such as tourism and fisheries, is estimated by the UN Environment Programme (UNEP) at around $40 billion.

The UN Environment Programme (UNEP) has warned that, if the large increase in medical waste, much of it made from environmentally harmful single-use plastics, is not managed soundly, uncontrolled dumping could result. 

The potential consequences, says UNEP, which has produced a series of factsheets on the subject, include public health risks from infected used masks, and the open burning or uncontrolled incineration of masks, leading to the release of toxins in the environment, and to secondary transmission of diseases to humans.

Because of fears of these potential secondary impacts on health and the environment, UNEP is urging governments to treat the management of waste, including medical and hazardous waste, as an essential public service. The agency argues that the safe handling, and final disposal of this waste is a vital element in an effective emergency response.

“Plastic pollution was already one of the greatest threats to our planet before the coronavirus outbreak,” says Pamela Coke-Hamilton, UNCTAD’s director of international trade. “The sudden boom in the daily use of certain products to keep people safe and stop the disease is making things much worse.”

3) Existing solutions could cut plastics by 80 per cent

However, this state of affairs can be changed for the better, as shown by a recent, wide-ranging, report on plastic waste published by The Pew Charitable Trusts, and sustainability thinktank Systemiq.

The study, “Breaking the Plastic Wave: A Comprehensive Assessment of Pathways Towards Stopping Ocean Plastic Pollution”, which was endorsed by Inger Andersen, head of the UN environment agency UNEP, forecasts that, if no action is taken, the amount of plastics dumped into the ocean will triple by 2040, from 11 to 29 million tonnes per year.

But around 80 per cent of plastic pollution could be eliminated over this same period, simply by replacing inadequate regulation, changing business models and introducing incentives leading to the reduced production of plastics. Other recommended measures include designing products and packaging that can be more easily recycled, and expanding waste collection, particularly in lower income countries.

4) Global cooperation is essential

In its July analysis of plastics, sustainability and development, UNCTAD came to the conclusion that global trade policies also have an important role to play in reducing pollution. 

Many countries have introduced regulations that mention plastics over the last decade, an indicator of growing concern surrounding the issue, but, the UNCTAD analysis points out, for trade policies to be truly effective, coordinated, global rules are needed.

“The way countries have been using trade policy to fight plastic pollution has mostly been uncoordinated, which limits the effectiveness of their efforts, says Ms. Coke-Hamilton. “There are limits to what any country can achieve on its own.”

5) Promote planet and job-friendly alternatives

Whilst implementing these measures would make a huge dent in plastic pollution between now and 2040, the Pew/ Systemiq report acknowledges that, even in its best-case scenario, five million metric tons of plastics would still be leaking into the ocean every year.

 A dramatic increase in innovation and investment, leading to technological advances, the report’s study’s authors conclude, would be necessary to deal comprehensively with the problem.

Furthermore, UNCTAD is urging governments to promote non-toxic, biodegradable or easily recyclable alternatives, such as natural fibres, rice husk, and natural rubber. These products would be more environmentally-friendly and, as developing countries are key suppliers of many plastic substitutes, could provide the added benefit of providing new jobs. Bangladesh, for example, is the world’s leading supplier of jute exports, whilst, between them, Thailand and Côte d’Ivoire account for the bulk of natural rubber exports.

“There’s no single solution to ocean plastic pollution, but through rapid and concerted action we can break the plastic wave,” said Tom Dillon, Pew’s vice president for environment. As the organization’s report shows, “we can invest in a future of reduced waste, better health outcomes, greater job creation, and a cleaner and more resilient environment for both people and nature”.

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Beyond tourism: Investing in local communities to protect Africa’s wild spaces

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For ten years, Dixon Parmuya has guided tourists on bush walks around Amboseli National Park in Southern Kenya. But since COVID-19 swept through Kenya in mid-March, the country’s tourism industry has dwindled, leaving many locals without jobs and animals without protection.

The coronavirus pandemic is creating what experts are calling a brewing conservation crisis in Kenya, a country home to some of Africa’s most iconic animals. Most of Kenya’s programs to protect wildlife are funded directly by tourist dollars and with visitor numbers down, money for conservation is drying up, say experts. There are also fears that poaching will rise, leaving wildlife protection hanging in the balance.

“If there is no tourism, there is no conservation,” says Parmuya.

But the pandemic is encouraging countries to change that.

“Tourism can be fickle,” says Doreen Robinson, Chief of Wildlife at the United Nations Environment Programme (UNEP). “We have to be more creative to expand revenue streams that can directly support local communities and protect natural assets.”

In Africa, UNEP is working closely with governments and partners to encourage wildlife-based economies – where local communities are central to protecting the wildlife areas they inhabit, for mutual benefit of both. This includes going beyond tourism to attract other kinds of green investment in wildlife areas, like using natural resources to produce consumer goods in a sustainable way. 

“We have to ensure that money gets reinvested into locally protected areas, and benefits are shared with the communities protecting biodiversity and wildlife, because these communities are creating the conditions for long-term, sustainable conservation in Kenya,” says Robinson.

That is something Purity Amleset agrees with. She is part of a team of all-female rangers with the International Fund for Animal Welfare that is working to raise awareness about the importance of wildlife to Kenya’s economy and its identity.

“As a ranger, I’m creating that conducive environment between the wild animals and my community. I come from that community, so they understand me well when I tell them the importance of wildlife,” she says.

Each year, 31 July marks World Ranger Day to commemorate rangers all over the world who risk their lives every day at the forefront of conservation.

UN Environment

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