#ClimateFinanceNG: Bridging the Investment Gap For Nationally Determined Contributions (#NDCs) — By Dr. Jubril Adeojo
By: Iccdi Africa
Tags: Investment, Ndc, Finance, Climate Change, Renewable Energy

What are the inhibiting barriers and apparent disconnect between the purported available or required finance and the actual finance invested in sustainable development?

I believe part of the supposed barriers to funding, range from the cost of some green technology assets, to the perception that investment in climate actions is risky, the corporate governance structure of companies. Time period in deployment of some Renewables, Short term ROI focus of investors and the current credit line structure of banks. All these most especially my last point to a very large extent are the disconnect in SDGs. Onewattsolar, an investee Company of SMefunds. They have a tech solution where business and individuals pay for the energy they consume only. Energy users do not need to won the solar assset, so they pay for the energy they consume.

Do you think a far more coordinated effort is required to encourage investments in long-term and sustainable landscape-scale initiatives?

Certainly, a coordinated effort needs to be encouraged. Financial institution, banks need to mainstream climate change into their lines of credit. We need to understand that right now topping the chart of all types of risk is the climate risk. How do you function as a bank when flood affects their investments or how do we investment in food production when drought is spreading or flood destroys crops.

The issue is, banks are not looking at the climate risk as investment strategy. Currently, we are advising AFDB on new guidelines to mainstream climate change into lines of credit released to African banks.

This will support Financial Institutions to identify and adopt innovative practice on sustainable financing measures to help sustainable businesses.

We are facing uncharted territory that requires taking unprecedented action to recalibrate globally towards a low-carbon economy. How do we unlock private finance as a solution to achieving change?

Indeed scary times. To unlock private financing, not just unlocking but unlocking at massive scale. A. Increase transparency,- investors should readily know their exposure to carbon risk as well as their carbon impacts. The Govt at all levels should make it mandatory for companies to disclose their carbon risks and impacts. B. Redirect savings to investing in sustainable solution (green bonds): to achieve a low carbon economy fast enough we all need to get involved. Considering the low interest rate we have currently in Nigeria, how savings should be channelled to investing in sustainable solutions that will give you good return and also move us closer to a low-carbon economy.

Government participation at all levels- all levels should invest in low carbon infrastructures. For instance local govt and state govts can issue a green bond in order to develop low-carbon infrastructurea to accelerate low carbon economy. We shouldn’t assume that people understand climate change. Continuous discussions like this so that people can understand climate change and its effect. Govt could introduce a label system that would indicate the carbon risk and impact. Heavy Sanctions: Governments should impose heavy sanctions on companies contributing to the environmental degradation and emissions. There should also be in place high carbon taxes. Reward those complying.

The world is in a transition phase propelled by ensuring global average temperatures remain below 2°C above pre-industrial levels amidst a rising population. Can sector investment help to achieve a sustainable future?

Yes. Investors need to use their understanding of the climate change we face now as pragmatic guide to analyse the manner in which they are investing. I believe using the principles of sustainability to guide investment makes business sense. It is a known fact, scientifically proven that if we continue to burn fossil fuels which aggravates climate change, economic activities will be utterly interrupted.

Current floods and extreme weather should serve as warning of things to come. So investors should blink an eye before investing in the sector. This is a global challenge; I would say it is achievable but the way in which financial markets, Investors respond will be a great enabler to achieving the set target

There is a long-standing awareness dat funding for environmental & climate efforts is scarce. However, there is a growing discourse claiming the availability of trillions of dollars to finance d global envtal agenda? What’re ur thoughts on this?

It was Bill gates who said that to combat and defeat climate change we have to deploy green technologies are massive scale. Innovative ways of deploying capital at massive scale is equally paramount to achieve the set target.Saying there are trillions available and its sitting in the bank won’t move us nowhere. That’s just what I think. The trillion should be deployed to achieve the said global environmental agenda via innovativ financing models

What is your recommendation for the government in bridging the investment gap for Nationally Determined Contributions (#NDCs)

There should be heavy sanctions and high carbon taxes for business who emit. B. Do more of implementing mitigation measures that will promote low carbon economy as well as sustainable and high economic growth. Continue to enhance national capacity to adapt to climate change. D Invest heavily in climate change related science, technology and R&D that will enable the country participate in ground breaking scientific and technological innovations Significantly increase public consciousness/awareness on climate issues. F Involve private sector participation in addressing the challenges of climate change with possible tax incentive. Strengthen the national institutions to establish a highly functional framework for climate change governance. Enforcement of environmental laws is the vaccination needed now to protect us from dire effects of climate change on our lives and business. SDG13Climate action is the most strategic because the success of other goals depend on it.

This is a tweet-chat series on #ClimateWednesday — #ClimateFinanceNG