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Revitalizing a Global Fight Climate Change Together

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Authors: Xu Guoying & Zhao Qingtong

Since the 1960s, the effects of global climate change have alarmed the peoples over the world. It includes unprecedented stronger storms, floods, droughts, landslides, rising temperatures and glacier melting. The nature is becoming more fragile, as Harvard scientist James McCarthy warned, “Now the Earth is populated with 6 billion people and natural and human systems that provide us with food, fuel, and fibre are strongly influenced by climate.” It does not matter whether carbon dioxide is placed in the atmosphere from China or the United States, it still affects global change. Truly as climate change accelerates, future change may not occur as smoothly as it has in the past. Despite considerable public attention, for example, the Vienna Conventions in 1985, FCCC in 1994 and the Kyoto Protocol in 1997, still less impressive progress has been made in reducing CO2 emissions globally.

Considering this, world leaders from some 70 countries staged a virtual gathering on December 12 to celebrate the 5th anniversary of the Paris climate accord, the international agreement to curb global warming, with a view to drawing pledges by countries to increase efforts in tackling global climate challenges. As UN Secretary-General Antonio Guterres said, the world needs to reduce global emissions by 45% by 2030 compared to 2010 levels and urged world leaders to “take the right decisions” to push their countries towards carbon neutrality. As a response to Guterres’ address, the president of the European Council Charles Michel reiterated the importance of international cooperation in fighting climate change. Chinese President Xi announced China’s determined commitments to combatting climate change along with other countries. The U.K. Prime Minister Boris Johnson also pointed to the global efforts in developing coronavirus vaccines as an example of the strength of countries working together. As he said, “Together we can use scientific advances to protect our entire planet, our biosphere, against a challenge far worse, far more destructive than coronavirus.”The world indeed needs the golden thread of climate action to weave through every international gathering next year, including the G7, the G20 and other meetings, in order to fight climate change much more efficiently and substantially.

More encouraging, although the administration of President Trump, who withdrew the U.S. from the Paris accord, wasn’t represented at the meeting. U.S. President-elect Joe Biden promised to rejoin the Paris Agreement in a written statement sent shortly before the meeting started. As the United States is returning to the Paris Agreement, the international community expects that the U.S. will commit to carbon neutrality, simply because others have done in the past days and weeks, countries such as China, Japan and Brazil. Yes, the countries that are party to the Paris Agreement are required to submit their updated targets to the United Nations by the end of this year.

As the largest developing country and a rising power as well, China vows to lower its carbon dioxide emissions per unit of GDP by over 65 percent from the 2005 level, increase the share of non-fossil fuels in primary energy consumption to around 25 percent, increase the forest stock volume by 6 billion cubic meters from the 2005 level, and bring its total installed capacity of wind and solar power to over 1.2 billion kilowatts. As a matter of fact, China has called for the global commitments to work towards a range of issues, including climate change, marine ecosystem protection, sustainable land use, restoring migration routes and many other areas to prevent the alarming scale of biodiversity loss in the world. This is a recognition of the crisis and an expression of the need for a profound re-commitment from world leaders to take urgent action. Yet, pragmatically with the world facing the coronavirus pandemic and failing to meet the 2020 biodiversity targets agreed previously, this summit was seen as an opportunity for world leaders to revise their goals and commitment to protect nature. As they have agreed, the challenges of climate change and COVID-19 show us the importance of biodiversity conservation and sustainable use to ensure a more secure, inclusive and resilient world. To that end, they must develop and agree on a shared plan together for the biodiversity and climate negotiations scheduled for next year, to secure a carbon-neutral, nature-positive and equitable future for all. There has never been a more crucial time to act for nature than now, as the UN chief Guterres warned, people over the world must stop a “suicidal” war on nature.

Historically the first convention on global climate change was adopted in 1992. Now the question remains “Can global cooperation succeed in a combating climate change? At its root, the answer to our puzzle is quite simple and plain. From a realistic point of view, each country would like to benefit from a cleaner environment but would also like others to bear the costs of protecting environmental quality. Given this, all countries share the benefits of a healthy atmosphere and all face private costs in changing individual behavior. Accordingly, all countries have attempted to free ride on one another, hoping to reap the benefits of a greener environment without having to give up our current lifestyle. For example, the United States and Australia remain the only two industrialized countries that have declined to ratify the Kyoto Protocol. Astonishingly, they even question climate change science and seriousness of the predicted impacts of global warming, maintaining that undertaking emission reductions would harm their economies, and also arguing that Protocol is flawed because it does not require the major developing countries like China to undertake mandatory emission measures.

The next problem of collective action is compounded by the distributional consequences of alternative policy solutions, especially in the case of global climate change. For example, hydrocarbon fuels are the life blood of modern economies, and the interests who would lose from any seminal policy-changing are large and politically powerful. Even nowadays these vested interests have played upon the basic incentive of all actors to free rise to block any policy change. Due to this, international institutions are expected to play a role in facilitating and codifying cooperation in global climate change. Negotiations have occurred necessarily among global leaders who have reached the agreements and the consensuses in order to use them as the efficient legal tools.

In light of the analysis above, some countries, such as Japan, Canada, France and the U.K., recently declared a “climate emergency” and pledged to make its public sector carbon neutral by 2025.In September, China also publicly committed to bring carbon emissions to a peak by 2030 and achieve carbon neutrality by 2060. Since the presidential race in the US is over fundamentally, John Kerry signaled Washington’s seriousness about climate shortly after being tapped by President-elect Joe Biden to serve as U.S. envoy on climate, a new cabinet-level post.  As he said, “America will soon have a government that treats the climate crisis as the urgent national security threat it is.” In addition, the UN is urging countries around the world to take more aggressive actions to match their commitments to the global climate change. In fact, although the pandemic is still the biggest concern to many people in the world in 2020, for millions in climate vulnerable places, the climate emergency remains the biggest threat and sadly there is no simple vaccine to fix the climate.

In order to show China is a responsible country in the world affairs, Beijing announced more new measures to fight climate change and stressed the important role of “solidarity, cooperation and confidence.” First, in term of the climate challenge, China argues that no one can be aloof and unilateralism will get us nowhere. Second, the COVID-19 pandemic which has affected over 50 million people globally, international community needs to work together to combat these natural disasters in terms of both virus and climate.”All countries need to maximize actions in light of their respective national circumstances and capabilities,” Xi said, calling on the developed countries to scale up support for developing countries in the financing, technology and capacity building. Only by upholding multilateralism, unity and cooperation can we deliver shared benefits and win-win for all nations.

For sure, the Prisoner’s dilemma that exists at the individual level is easily reproduced at the international level with the same consequences. The United States, as the world’s largest source of greenhouse gases, is unwilling to take an initiative to control its own emissions in the absence of a global solution. As former U.S. Secretary of Energy Samuel Bodman (2006) stated, “We are a small contributor to the overall problems when you look at the rest of the world, so it’s really got to be a global solution agreed by all other countries.” In contrast, as the largest developing country and the second-largest economy in the world, China has been striving to coordinate economic growth and environmental protection and committed to the global fight against climate change. China has persistently exceeded its Intended Nationally Determined Contributions by 2030 under the Paris agreement, thanks to its efforts to cut growth in energy use and reduce dependence on fossil fuels. Now Beijing vows to continue making new progress in building an ecological civilization, optimize the development and protection of territorial space, and achieve notable results in green transformation of production and lifestyle.

By the end of 2020, the great news is that President-elect Biden reiterated his campaign pledge that his administration will cut U.S. emissions to net zero “no later than 2050.” He goes further saying that the United States will engage closely with the activists, including young people, who have continued to sound the alarm and demand change from those in power. It is quite clear that under a Biden-Harris administration, the U.S. will be back working with other countries around the world to ensure realizing those goals for the sake of the world and future generations. The paradoxes of collective action are every bit as important for countries as for individuals. After all, together, the world never fails.

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Green Planet

Promoting Green Finance in Qatar: Post-Pandemic Opportunities and Challenges

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The recent COVID-19 pandemic had significant implications for both national economies and the global financial system, in addition to hindering the achievement of the sustainable development goals agenda. The UNDP estimates global human development—a combination of education, health, and living standards—could fall this year for the first time since 1990, which highlights how the effects of the pandemic present both an enormous challenge and tremendous opportunities for reaching the 2030 Agenda and the Sustainable Development Goals (SDGs).

With the additional challenges arising from climate change, governments have committed to several policy measures which promote a green recovery to rebuild their economies, while benefiting the people and the planet. The Organisation for Economic Co-operation and Development (OECD) estimates that the public resources committed by governments to support a green recovery amount to at least USD 312 billion. These measures present tremendous opportunities for green finance in general, and Islamic green finance in particular, in the context of Muslim-majority countries.

The State of Qatar, in light of its National Vision 2030 and in order to enhance the diversification of its economy away from hydrocarbon, has taken several measures to mitigate climate change. These include increasing the use of solar energy to more than 20% of its energy mix by 2030, the optimal use of water, improving air quality, waste recycling, increasing green spaces, in addition to the country’s commitment to organizing the first “carbon neutral” tournament featuring the use of solar-powered stadiums and water and energy-saving cooling and lighting technology. The State is also a signatory of the Paris Agreement on Climate Change and supports a number of global initiatives in relation to climate change mitigation.

All these initiatives could be funded via green finance. In this regard, there are four global trends in the financial industry that the State of Qatar can leverage to promote green finance for green recovery:

Growth of SRI and ESG awareness:

Socially responsible investing (SRI) and environmental, social, and governance (ESG) investing are two of the fastest growing investing areas globally. Both are driven by the increasing awareness of social and environmental responsibility. According to the Global Sustainable Investment Alliance, global sustainable investment reached $30.7 trillion in the five major markets at the start of 2018, a 34 percent increase in two years. These include Europe, United States, Japan, Canada, Australia, and New Zealand. Developing green finance instruments and products can attract a growing SRI investor base that seeks to align social and environmental values with its investment portfolios.

Upward trend of Islamic Finance:

According to the Islamic Financial Services Board (IFSB), the total worth of the Islamic Financial Services Industry across its three main segments (banking, capital markets, and takaful) is estimated at $2.44 trillion in 2019, marking a year-on-year 11.4% growth in assets in US dollar terms. According to Thomson Reuters, the industry is projected to reach $3.8 trillion by 2022. Qatar is one of the global Islamic finance hubs with Islamic finance assets representing more than 20% of the local financial system’s assets. With the recent development of Islamic green finance, Qatar has the opportunity to position itself as a sustainable finance leader in the region by promoting synergies between Islamic and green finance growing markets.

Financial innovation for sustainability:

The United Nations Conference on Trade and Development (UNCTAD) highlights that achieving the Sustainable Development Goals (SDGs) will take between $5 and $7 trillion, with an investment gap in developing countries of about $2.5 trillion and the additional net investment required to implement renewable energy solutions standing at $ 1.4 trillion, or about $100 billion per year on average between 2016 and 2030, according to the International Renewable Energy Agency (IRENA). Mitigating this funding gap requires an engaged private sector to make green investments. That is why several green instruments and products were developed across the various segments of the financial industry. These include green retail banking products, including green loans and green mortgages, green corporate and investment products, green project finance, and green venture capital and private equity, as well as green capital market instruments, like green investment funds, green bonds, and sukuk.

Integration of sustainability objectives into national strategies:

Several governments around the world have integrated sustainability objectives and green finance roadmaps into their national strategies, either through a top-down approach, whereby green finance frameworks and taxonomies are harmonized at the country level (as with China), or via market-led collaborative actions. In addition, to overcome private sector investment barriers, such as high up-front costs, long investment timelines, and higher perceived risks, several countries have put in place incentives in the form of subsidies and tax exemptions. The State of Qatar can leverage these experiences through collaborations and partnerships to develop a unique green finance model in the region

Green Sukuk: A Fast Growing Market

Green sukuk is an innovative instrument for financing green infrastructure. It has the potential to become a new asset class targeting both Islamic and socially responsible investors.

Since the issuance of the first green sukuk in 2017 in Malaysia, the market has grown significantly, with twelve issuers in Indonesia, Malaysia, and the United Arab Emirates tapping the market, in addition to the Islamic Development Bank. About $7.6 billion in four currencies (EUR, IDR, MYR, and USD) was raised up to September 2020, with tenors ranging from two to 21 years. The amounts raised were allocated to green construction, energy efficiency, and clean transportation projects.

Promoting Green Finance in Qatar

Although the green finance market is still in an early stage of development in the country, the market has witnessed several initiatives by local institutions that might pave the way to the development of a more dynamic market. In September 2020, Qatar National Bank (QNB) issued the first ever green bond in Qatar, a $600 million tranche, under its MTN Program, with a maturity of five years under its established Green, Social, and Sustainability Bond Framework.

In addition, Qatar Stock Exchange (QSE) introduced an ESG Guidance in 2017 to assist listed companies wishing to incorporate ESG reporting into their existing reporting processes.

While Bond and sukuk issuance in Qatar reached $28 billion in 2019, the market is largely driven by government issuance and commercial banks for corporate issuances, with the exception of Ezdan Sukuk in 2016 and 2017. The development of green sukuk in the country with the enabling ecosystem could facilitate corporate sukuk issuance, thus enhancing market liquidity.

In conclusion, promoting a green recovery in line with the country’s economic diversification objectives and climate mitigation strategies will require the development of an enabling ecosystem for the development of green finance in Qatar. Developing a pipeline of bankable green projects at the country level, market awareness, and promoting synergies between Islamic and green finance will provide the basis for further innovation and policy action, such as green labels, frameworks, and incentives.

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2021 will be defined by the more long-term crisis facing humanity: Climate change

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Rather than low-tech and often unworkable solutions (reduced or no travel, mass vegan diets) governments are increasingly embracing technology to help us understand and influence the climate – rather than merely respond to it. This should become the norm for public authorities across the world.

China’s weather modification programme, for example, could be a lifeline for workable solutions to climate change globally. The technique, known as cloud-seeding, uses silver iodide and liquid nitrogen to thicken water droplets in the cloud, leading to increased rain or snowfall. 

The technology has been used to prevent droughts and regulate weather before major events, like in the run up to the 2008 Beijing Olympics

The Chinese cabinet has announced that its weather modification programme will cover half the country by 2025, with the aim to revitalize rural regions, restore ecosystems, minimize losses from natural disasters and redistribute water throughout the country.  

And China’s ambitious ‘Sky River’ programme could eventually divert 5 billion cubic meters of water annually across regions, which could protect millions of people from the effects of drought and water scarcity. 

Although critics have, without evidence, described these projects as ‘weaponization of the weather’, the humanitarian and development potential is huge. 

Necessity is the mother of invention, and this is truer than ever with regards to the climate. The world faces a climate-change induced water crisis, with 1.5 billion people affected globally. 

The UN predicts that at the current water usage levels, water scarcity could displace 700 million people by 2030. 

Carbon emissions are unlikely to be eliminated in high growth economies in regions like Asia, meaning that the world must develop a way to manage emissions’ effects on the climate. 

Whilst it is true that the basic solutions of eating less meat, cycling to work and cutting back on international flights can help to curb our carbon output in the long-run, it does nothing to help those who suffer from flooding or water scarcity today. 

Ultimately, technology is an essential part of the solution.

Big Tech is leading the charge in tackling climate change through the use of Big Data and machine learning. In November 2019, a group of data scientists published a paper entitled ‘Tackling Climate Change with Machine Learning’. The paper laid out 13 different applications of using machine learning to tackle the impacts of climate change. One such application was using machine-learning to predict extreme weather events. 

Such an application is already being put into action. For example, Bangladesh is one of the most flood-prone countries in the world; approximately 5 million people were negatively affected by flooding last year alone. In order to help combat this, Google teamed up with the Bangladesh Water Development Board and the Access to Information (a2i) Programme to develop a flood notification app that is approximately 90% accurate

The app, which is enabled by AI flooding simulation, provides the population with timely, updated, and critical information that can help users make informed decisions on the safety of their families and friends. 

The same technology has been used in both India and South Africa, and has the potential to save thousands of lives and livelihoods. It is these sorts of innovations that we must rely on to help those who are most vulnerable to the impact of climate change. 

It is not only cloud-seeding and weather prediction technologies that will provide humanity with a route out of its biggest existential threat. Breakthrough battery technology, green hydrogen, 5G-based smart grids and carbon-negative factories are set to become commonplace in our fight against rising CO2 levels. 

As a global society, we must set our political divisions and some critics’ technophobia aside, and step forward in a spirit of international collaboration.

Similarly to how the pandemic showed the need for united global action, climate change will do the same. And just as technology and science was a key part in how the pandemic was brought under control, climate change can only be addressed through tech-based solutions.

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The solution to marine plastic pollution is plural, and plastic offsetting is one of them

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Due to growing concerns around environmental protection, businesses, individuals and governments have been looking for solutions that can be largely implemented to close the tap on plastic pollution.

In the last five years, businesses have strengthened their Sustainability Approach to acknowledge the need to take responsibility for their plastic production and consumption.

If targets have been defined and strong policies followed them to ensure high recycling rates of plastic products, a problem remains. What is the solution for low-value non-recyclable plastics?

This is where plastic offsetting enters the scene. As a derivative of the Carbon Offsetting concept, where trees are planted or protected to capture CO2 emissions, Plastic offsetting also known as Plastic Neutralization, enables companies to take responsibility for their plastic footprint.

Put simply, neutralizing means funding the collection and treatment of plastic, equivalent to the plastic impact of the business. Therefore, giving it the opportunity to compensate for every ton of plastic it has produced by ensuring there is one ton less in the environment.

From linear to Circular Economy Itis also a breakthrough in our traditional model of production, the linear economy. By extending the producer responsibility (EPR), this concept allow to build the bridge that lead to the ideal model, the circular economy, where no waste remains.

This innovative solution brings with it diverse positive impact. To the environment, by protecting ecosystems from plastic pollution, reducing landfilling and CO2 emissions. A strong social impact, by local communities by empowering local communities with work and better incomes. But also businesses, by becoming more sustainable with the reduction of the plastic footprint and a strengthen corporate social responsibility.

TONTOTON, a Vietnamese company, based in Ho Chi Minh City has succeed to connect all stakeholders to create a new market for low-value non-recyclable post-consumer plastic, on the scheme of circular economy.

TONTOTON Plastic Neutralization Program

Following the idea that the informal sector achieve to collect and recycle large amount of plastic in poor waste management areas, Barak Ekshtein, director of TONTOTON decided to look closer to the problem. In fact, a study shows that ‘97% of plastic bottles were collected by informal waste pickers.

The problem therefore does not lie in the logistics but in the price. By giving a market price to non-recyclable plastic, it allows waste collectors to collect and treat waste and thus avoid plastic pollution.

TONTOTON currently works in Southern Vietnamese Islands, Hon Son and Phu Quoc, and has already few tons of low-value plastic waste. To do so, it collaborates with local waste-pickers and thus provide them better incomes. The program focuses on preventing ocean plastic by following the Ocean Bound Plastic Certification. Their activities are audited by a 3rd party control body, the internationally recognized company, Control Union.

To treat the waste, TONTOTON partners with a certified cement plant, through co-processing, to valorize waste as an alternative energy and raw material. “Our system can solve two issues. Plastic is made of fossil fuels and contains more energy than coal. Thus we can replace industrial coal consumption with non-recyclable plastic waste. The plastic will not end up in landfill or oceans, therefore reduce levels of coal consumption and thus also CO2 emissions.”, says Barak Ekshtein.

Businesses engaged in their program can claim plastic neutrality on the amount of plastic neutralized to share their sustainability efforts. Moreover, indicate it on their neutralized product by bearing the “Plastic Neutral Product” label.

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