rlacombe/ClimateX huggingface dataset:
As a result, low-carbon investments do not take place to socially and economically optimal levels, and the correct market signals would involve setting carbon prices high enough or equivalent trading in reduced carbon emissions by regulatory action to induce sufficient and faster shift towards low-carbon investments (IPCC AR6_WGIII, confidence: high)
Carbon tax can be a simpler and easier way to implement carbon pricing, especially in developing countries, because countries can utilise the existing fiscal tools and do not need concrete enabling conditions as market-based frameworks (IPCC AR6_WGIII, confidence: high)
There is a growing awareness of the low leverage ratio of public to private capital in climate blended finance (Blended Finance Taskforce 2018b) and of a ‘glass ceiling’, caused by a mix of agencies’ inertia and perceived loss of control over the use of funds, on the use of public guarantees by MDBs to increase it (IPCC AR6_WGIII, confidence: high)
Limited prioritisation and agreement on prioritisation of sectors and/or project categories being ready and/or preferred for direct private sector involvement might become a challenge in the coming years (IPCC AR6_WGIII, confidence: high)
A missing alignment of public funding and investment activity with the Paris Agreement (and Sustainable Development Goals) would result in significant carbon lock-ins, stranded assets and thus increase transition risks and ultimately economic costs of the transition (IPCC AR6_WGIII, confidence: high)
Lessons from the global financial crises show that although deep economic crises create a sharp short-term emission drop, and green stimulus is argued to be the ideal response to tackle both the economic and the climate crises at once, disparities between regional strategies hinder the low-carbon transition (IPCC AR6_WGIII, confidence: high)
Boosting investment should propel job creation, increasing household income and therefore demand across economic sectors (IPCC AR6_WGIII, confidence: high)
First, only those countries and regions with highest credit-ratings (AAA or AA) with access to deep financial markets and excess savings will be able to mount such counter-cyclical climate investment paths, typically high-income developed economies (IPCC AR6_WGIII, confidence: high)
Box 15.6 | Macroeconomics and Finance of a Post-COVID-19 Green Stimulus Economic Recovery Path Financial history suggests that capital markets may be willing to accommodate extended public borrowing for transient spending spikes (Barro 1987) when macroeconomic conditions suggest excess savings relative to private investment opportunities (Summers 2015) and when public spending is seen as timely, effective and productive, with governments able to repay when conditions improve as economic crisis conditions abate (IPCC AR6_WGIII, confidence: high)
However, in terms of increase of supply of, in particular, public finance, often the debate is still driven by the question on affordability, considerations around financial debt sustainability and budgetary constraints against the background of macroeconomic headwinds – even more in the (post-)COVID-19 world (IPCC AR6_WGIII, confidence: high)
The level of climate alignment of debt is hardly considered in debt-related regulation and/ or debt sustainability agreements like the Maastricht Treaty ceilings (3% of GDP government deficit and 60% of GDP (gross) government debt) not considering economic costs of deferred climate action as well as economic benefits of the transformation.Robust studies on the economic costs and benefits in the short- to long-term of reaching the LTGG exist for only few countries and/or regions, primarily in the developed world (IPCC AR6_WGIII, confidence: high)
For many developing countries, the focus of debt sustainability discussions is on the negative effect of climate change on the future GDP and the uncertainty with regard to short-term effects of climate change and their economic implications (IPCC AR6_WGIII, confidence: high)
Debt levels globally but particularly in developing and vulnerable countries have significantly increased over the past years with current and expected climate change impacts further burdening debt sustainability (IPCC AR6_WGIII, confidence: high)
Definition of triggers is likely the most complex challenge in this context.The use of debt-for-nature and debt-for-climate-swaps is still very limited and not mainstreamed but offers significant potential if used correctly (IPCC AR6_WGIII, confidence: high)
The debate around stranded assets focuses strongly on the loss of value to financial assets for investors (Section 15.6.1), however, stranded assets and resources in the context of the transition towards a low-emission economy ‘are expected to become a major economic burden for states and hence the tax payers’ (IPCC AR6_WGIII, confidence: high)
Late government action can delay action and consequently strengthen the magnitude of action needed at a later point in time with implications for employment and economic development in impacted regions requiring higher level of fiscal burden (IPCC AR6_WGIII, confidence: high)
While there are questions about the sufficiency of insurance products to address the losses and damages of climate- related disasters, insurance can help to cover immediate needs directly, provide rapid response and transfer financial risk in times of extreme crisis (IPCC AR6_WGIII, confidence: high)
Risk pooling among countries and regions is relatively advantageous when compared to conventional insurance because of the effective subsidising of ‘affected regions’ using revenues from unaffected regions which involve pooling among a large subset of countries (IPCC AR6_WGIII, confidence: high)
At the same time, this approach has substantial basis risk (actual losses do not equal financial compensation) (IPCC AR6_WGIII, confidence: high)
Increasingly, climate risk insurance schemes are being blended into disaster risk management as part of a comprehensive risk management approach (IPCC AR6_WGIII, confidence: high)
There are also challenges with risk diversification, replication, and scalability (IPCC AR6_WGIII, confidence: high)
Other gaps and challenges flagged by Kreft and Schäfer (2017) include limited coverage of the full spectrum of contingency risks experienced by countries, inadequate role of risk management as a standard for all regional pools, though there are some emerging best practices in terms of data provision on weather-related risks, and incentivisation of risk reduction (IPCC AR6_WGIII, confidence: high)
It has transformative potential as a key enabler of inclusive urban economic development through the building of resilient communities (IPCC AR6_WGIII, confidence: high)
The effect of deficit in investment for global infrastructure towards the growing subnational-level debt also creates pressure on subnational finances and constrains future access to financing (IPCC AR6_WGIII, confidence: high)
PPPs are particularly important in cities with mature financial systems as the effectiveness of PPPs depends on appropriate investment architecture at scale and government capacity (IPCC AR6_WGIII, confidence: high)
National-level investment vehicles can provide leadership for subnational climate financing and crowd in private finance by providing early-stage market support to technologies or evidence related to asset performance and costs-benefits (IPCC AR6_WGIII, confidence: high)
Debt financing via subnational bonds and borrowing, including municipal bonds, is another potential tool for raising upfront capital, especially for rich cities (IPCC AR6_WGIII, confidence: high)
Across all types of cities, five key challenges constrain the flow of subnational climate finance (IPCC AR6_WGIII, confidence: high)
Access to capital markets has been one of the major sources for subnational financing and is generally limited to rich cities, and much of this occurs through loans (IPCC AR6_WGIII, confidence: high)
The depth and character of the local capital market also affect cities differently in generating bonds (IPCC AR6_WGIII, confidence: high)
There is insufficient evidence about which financing schemes contribute to climate change mitigation and adaptations at community level (IPCC AR6_WGIII, confidence: high)
Integrated urban capital investment planning is an option to develop cross-sectoral solutions that reduce investment needs, boost coordination capacity, and increase climate-smart impacts (IPCC AR6_WGIII, confidence: high)
Investor demand is driving developments in innovative financial products (IPCC AR6_WGIII, confidence: high)
The growth and diversity of the green bond market illustrates how innovative financial products can attract both public and private investors (IPCC AR6_WGIII, confidence: high)
Significant potential exists for continued growth in innovative financial products, though some challenges remain (IPCC AR6_WGIII, confidence: high)
Financial disclosure regulatory developments can help further align and specify definitions of green in the financial sector but are not a substitute for climate policy (IPCC AR6_WGIII, confidence: high)
Identifying green financial products can increase uptake and may result in a lower cost of capital in certain parts of the market (IPCC AR6_WGIII, confidence: high)
There is some evidence of a premium, or an acceptance of lower yields by the investor, for green bonds (IPCC AR6_WGIII, confidence: medium)
Financial flows via these instruments have limited measurable environmental impact to date, however they can support capacity building on climate risk and opportunities within institutions to realise future impacts (IPCC AR6_WGIII, confidence: high)
One challenge is unlocking unencumbered endowments to contribute to Paris and SDGs (IPCC AR6_WGIII, confidence: high)
Institutional domestic and international investors have growing assets estimated to exceed USD100 trillion (IPCC AR6_WGIII, confidence: high)
However, progress remains pilot, slow and piecemeal (IPCC AR6_WGIII, confidence: high)
Options to mobilise institutional investors currently remain small pilots, relative to Paris and SDG ambitions (IPCC AR6_WGIII, confidence: high)
Paris-aligned NDCs that integrate policies on COVID-19 pandemic recovery, climate action, sustainable development, just transition and equity can harness co-benefits including contribution to Invisible UN SDG 7 energy poverty sectors (IPCC AR6_WGIII, confidence: high)
Combining approaches: (i) developed countries meeting UNFCCC USD100 billion commitment on a grant-equivalent basis, (ii) stepped up technical assistance, (iii) infrastructure coordination, (iv) knowledge sharing by project preparation entities, and (iv) harnessing project risk facilities such as guarantees could be instrumental for scaling climate finance for Paris-SDGs (IPCC AR6_WGIII, confidence: high)
Existing project risk facilities including guarantees could benefit from coordination, scaling and better reporting frameworks (IPCC AR6_WGIII, confidence: high)
Investment vehicles into green infrastructure come in various forms (IPCC AR6_WGIII, confidence: high)
Developing government bond yield curves with different maturities can be an important policy objective (IPCC AR6_WGIII, confidence: high)
Developing countries are using fiscal incentives, grants, and guarantees to support nascent bond markets with most taxonomies under development (IPCC AR6_WGIII, confidence: high)
This makes a business case for deferred investments in grid infrastructure (IPCC AR6_WGIII, confidence: medium)
MaaS tends to deliver significant urban benefits (e.g., cleaner air) and brings in efficiency gains in the use of resources (IPCC AR6_WGIII, confidence: high)
If effectively implemented, nature-based solutions can be cost- effective measures and able to provide multiple benefits, such as enhanced climate resilience, enhanced climate change mitigation, biodiversity habitat, water filtration, soil health, and amenity values (IPCC AR6_WGIII, confidence: high)
Nature-based solutions have large potential to address climate change and other sustainable development issues (IPCC AR6_WGIII, confidence: high)
REDD+ can significantly contribute to climate change mitigation and also produce other co-benefits like climate change adaptation, biodiversity conservation, and poverty reduction, if well-implemented (IPCC AR6_WGIII, confidence: high)
The development of nature-based solutions faces barriers that relate to the value proposition, value delivery and value capture of nature- based solutions business models and sustainable sources of public/ private finance to tap into (IPCC AR6_WGIII, confidence: high)
Policies and frameworks to expand and enhance financial inclusion also extend to the area of climate finance (IPCC AR6_WGIII, confidence: high)
At the level of public multilateral climate funds, there have been significant improvements in integrating gender equality and women’s empowerment issues in the governance structures, policies, project approval and implementation processes of existing multilateral climate funds such as the UNFCCC’s funds managed by the Global Environment Facility, the Green Climate Fund and the World Bank’s CIFs (IPCC AR6_WGIII, confidence: high)
Overall, efforts to promote gender responsive/sensitive climate finance, at national and local levels, both in the public and private dimensions and more specifically in mitigation-oriented sectors such as clean and renewable energy, remain deficient (IPCC AR6_WGIII, confidence: high)
Innovation has also led to, and exacerbated, trade-offs in relation to sustainable development (IPCC AR6_WGIII, confidence: high)
The currently widespread implementation of solar photovoltaic (solar PV) and light-emitting diodes (LEDs), for instance, could not have happened without technological innovation (IPCC AR6_WGIII, confidence: high)
Trade-offs include negative externalities – for instance, greater environmental pollution and social inequalities – rebound effects leading to lower net emission reductions or even increases in emissions, and increased dependency on foreign knowledge and providers (IPCC AR6_WGIII, confidence: high)
This systemic view of innovation takes into account the role of actors, institutions and their interactions, and can inform how innovation systems that vary across technologies, sectors and countries, can be strengthened (IPCC AR6_WGIII, confidence: high)
A combination of scaled-up innovation investments with demand-pull interventions can achieve faster technology unit cost reductions and more rapid scale-up than either approach in isolation (IPCC AR6_WGIII, confidence: high)
This inhibition occurs more often in developing countries (IPCC AR6_WGIII, confidence: high)
Capabilities play a key role in these functions, the build-up of which can be enhanced by domestic measures, but also by international cooperation (IPCC AR6_WGIII, confidence: high)
Some literature suggests that it is a barrier, while other sources suggest that it is an enabler to the diffusion of climate-related technologies (IPCC AR6_WGIII, confidence: medium)
For example, despite building a large market for mitigation technologies in developing countries, the lack of a systemic perspective in the implementation of the Clean Development Mechanism, operational since the mid- 2000s, has only led to some technology transfer, especially to larger developing countries, but limited capacity building and minimal technology development (IPCC AR6_WGIII, confidence: medium)
System-level rebound effects may also occur (IPCC AR6_WGIII, confidence: high)
At present, the understanding of both the direct and indirect impacts of digitalisation on energy use, carbon emissions and potential mitigation, is limited (IPCC AR6_WGIII, confidence: medium)
Inspiration can be drawn from the global unit cost reductions of solar PV, which were accelerated by a combination of factors interacting in a mutually reinforcing way across a limited group of countries (IPCC AR6_WGIII, confidence: high)
Spillovers related to energy and low-carbon technologies have been documented by a number of empirical studies (IPCC AR6_WGIII, confidence: high)
The presence of spillovers can have both positive and negative impacts on climate change mitigation (IPCC AR6_WGIII, confidence: high)
In addition, the presence of spillovers implies that a unilateral effort to reduce emissions in one region could reduce emissions in other regions (IPCC AR6_WGIII, confidence: medium)
In conjunction with other enabling conditions, technological innovation can support system transitions to limit warming, help shift development pathways, and bring about new and improved ways of delivering goods and services that are essential to human well-being (IPCC AR6_WGIII, confidence: high)
Trade-offs include negative externalities, such as environmental impacts and social inequalities, rebound effects leading to lower net emission reductions or even increases in emissions, and increased dependency on foreign knowledge and providers (IPCC AR6_WGIII, confidence: high)
Digitalisation, for example, holds both opportunity for emission reduction and emission-saving behaviour change, but at the same time causes significant environmental, social and greenhouse gas (GHG) impacts (IPCC AR6_WGIII, confidence: high)
Like other enabling conditions, technological innovation plays a balancing role – by inhibiting change as innovation strengthens incumbent technologies and practices – and a reinforcing role, by allowing new technologies and practices to disrupt the existing socio-technical regimes (IPCC AR6_WGIII, confidence: high)
Against this backdrop, international cooperation on technological innovation is one of the enablers of climate action in developing countries on both mitigation and adaptation (IPCC AR6_WGIII, confidence: high)
Sustainable Development Goals SectorSectoral mitigation optionsSDG 1 End poverty SDG 2 Zero hungerSDG 3 Good health and wellbeingSDG 4 Quality education SDG 5 Gender equalitySDG 6 Clean water and sanitationSDG 7 Affordable and clean energy SDG 8 Decent work and economic growthSDG 9 Industry, innovation and infrastructure SDG 10 Reduced inequalitiesSDG 11 Sustainable cities and communitiesSDG 12 Responsible consumption and productionSDG 13 Climate action SDG 14 Life below water SDG 15 Life on landSDG 16 Peace, justice and strong institutions SDG 17 PartnershipLine of sight (section numbers, tables, figures, box)Remarks (context specificity/scale) Energy systemsWind energy+ Wind can provide low-cost electricity to several communities (high confidence)± Land use for wind energy needs to be coordinated based on local circumstances, otherwise can have negative implications on food security (medium confidence)+ Minimal air pollution, also integration with health sector frequently discussed (high confidence)+ Low consumption of water (high confidence)+ Low-cost and low-carbon electricity in several regions (high confidence)+ Large job creation per unit investment (medium confidence)+ Integration with offshore and other infrastructure (medium confidence)+ Could help through net metering (medium confidence)± Cater to sustain- able production, however has significant material consumption and disposal needs (medium confidence)+ Low-carbon emissions (high confidence)± Offshore wind could pose risk to marine life if not appropriately managed (high confidence)± Land use for wind energy needs to be coordinated, otherwise can have negative implications on biodiversity (IPCC AR6_WGIII, confidence: medium)
Will likely require significantly more critical minerals Key context would include availability of land that does not compromise biodiversity Solar energy+ Solar PV can provide low-cost electricity to several communities (high confidence)± Land use for solar energy needs to be coordinated based on local circum- stances, otherwise can have negative implications on food security (medium confidence)+ Minimal air pollution, also inte- gration with health sector frequently discussed (high confidence)± Low consumption of water for PV but higher for CSP (Concentrating Solar Power) (high confidence)+ Low-cost and low- carbon electricity in several regions (high confidence)+ Large job creation per unit investment (medium confidence)+ Solar heat may be used in industrial heating (medium confidence)+ Could help through net metering (medium confidence)± Cater to sustain- able production, how- ever has significant material consumption and disposal needs (medium confidence)+ Low-carbon emissions (high confidence)± Land use for solar energy needs to be coordinated, otherwise can have negative implications on biodiversity (IPCC AR6_WGIII, confidence: medium)
Large-scale bioenergy projects with CCS may be expensive (IPCC AR6_WGIII, confidence: medium)
The reason for the tradeoff is competition between food and bioenergy crops (medium confidence)± Depending on the scale and infrastructural efficacy, bioenergy may result in good or poor air quality (medium confidence)± Some bioenergy feedstocks may cause competition for water (IPCC AR6_WGIII, confidence: high)
High depen- dence of 2.2 billion people on traditional and non-sustainable biomass, with nega- tive impact on health and deforestation (high confidence)+ Potential to provide employ- ment, including to workers who may be transitioning from fossil sectors (high confidence)+ Considerable opportunities for integration with other industries such as wastewater treatment (high confidence)+ Could lead to low- carbon transport fuels (high confidence)+ Use of waste biomass could be useful (high confidence)+ Low-carbon emissions (IPCC AR6_WGIII, confidence: high)
At the same time, effluents from biofuel production can also cause negative impacts on marine ecosystems when effluent treat- ment is not meeting high standards (high confidence)± Land use needs to be coordinated, otherwise can have negative implications on biodiversity and food production (high confidence)Sections 6.4.2.6 and 12.5, Box 6.1The regional context in terms of the types of biomass/land being utilised is critical Has potential for development of low-carbon organic materials, chemicals and plastics that can be produced Hydropower± Could lead to fisheries damage if not properly managed (medium confidence)+ Minimal air pollution (high confidence)+ Coordination with water infrastructure (medium confidence)+ Low-cost and low-carbon electricity in several regions (high confidence)+ Low-carbon emissions (high confidence)± Could lead to fish- eries damage if not properly managed (medium confidence)± Land use needs to be coordinated, otherwise can have negative implications on biodiversity (medium confidence)Section 6.4.2Key context would include availability of land that does not compromise biodiversity Geothermal energy+ Potential to provide energy in several energy- scarce regions (low confidence)± Low air pollution but some water pollution risks (medium confidence)± Water flowback, water pollution and other issues (medium confidence)+ Low-cost and low-carbon electric- ity and heat in several regions (high confidence)+ Heat may be used in industrial heating (medium confidence)+ Potential for air conditioning and heating (medium confidence)+ Low-carbon emissions (IPCC AR6_WGIII, confidence: high)
Much Literature on both the health benefits as well as risks arising from such power plants (high confidence)– Significant water consumption (high confidence)± Increased use of nuclear power can provide stable baseload power supply and reduce price volatility but has nuclear waste management needs (medium confidence)+ Local employment and reduced price volatility (IPCC AR6_WGIII, confidence: medium)
In the latter case, a wide range of infrastructure issues need to be addressed, including facilities and equipment, as well as human and financial resources, and the legal and regulatory framework (medium confidence)± Cater to sustain- able production, low resource consumption, but has significant waste management needs (medium confidence)+ Low-carbon emissions (IPCC AR6_WGIII, confidence: high)