Climate change is an economic problem. Let’s fix it

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Big international banks need to fund action on climate change, to protect stability and security around the world

Brenson S. Wase is finance minister of the Republic of the Marshall Islands and Emmanuel de Guzman is secretary of the Climate Change Commission, Philippines.

Michael. Maria. Marcus. Mangkhut.

 This year the fiercest storms that battered the planet were given names that start with an ‘M’.

 As representatives from Majuro and Manila, it struck a chord. Those of us living near the sea, on small islands and near great rivers know first-hand the dangers we all face if we do not act now.

 Three weeks on from the Intergovernmental Panel on Climate Change’s landmark study into the implication of warming beyond 1.5 degrees Celsius above pre-industrial levels, we have a chance to act.

 And we have to act because for our countries – the Philippines and the Marshall Islands – 1.5 degrees C is our red line. As we said at the Paris climate summit: 1.5 to stay alive.

 If climate change is an environmental and moral problem, it is also an economic problem. This is why it featured heavily in discussions at the recent World Bank / IMF meeting in Bali.

The societal change prescribed by IPCC 1.5 degree C report needs significant and speedy investment. “Limiting warming to 1.5 degrees C is possible within the laws of chemistry and physics but doing so would require unprecedented changes,” said Jim Skea, one of the IPCC’s lead authors.

 The IPCC’s prognosis is stark: limiting global warming to 1.5 degrees C would require “rapid and far-reaching” transitions in land, energy, industry, buildings, transport, and cities.

Global emissions of the most prolific greenhouse gas – carbon dioxide (CO2) – need to fall around 45 percent from 2010 levels by 2030, and collapse to ‘net zero’ by mid-century.

The Marshall Islands and Philippines need this to happen: it’s a matter of national security, national stability.

The Marshalls rely so much on our seas for food, livelihood and exports. Majuro’s airport is under regular siege from King Tides; it’s hard to have a fully functioning economy when your runway is under threat of getting submerged.

 We’re not sitting back as the tide laps our feet.

 As the recent New Climate Economy report outlined, trillions in the future can be saved now by investing in more compact, smarter and well-connected cities. Around 65 million low carbon jobs and $26 trillion in economic benefits could be generated by 2030 if governments take the right decisions today.

Earlier in 2018 the Philippine Board of Investments signed off on eight solar rooftop projects worth $1.65 billion. Solar power prices in the country routinely undercut coal and diesel, making renewables a common-sense proposition.

Last month, the Marshall Islands released its latest plan outlining how the country will slash its use of expensive imported oil and diesel and go 100 percent renewable energy, a decision that will collectively save citizens millions of dollars.

Earlier in October the V20 – a group of 20 of the world’s most climate vulnerable nations – and the G20 launched the InsuResilience Platform, which aims to offer financial protection from extreme weather, and investment to build more climate-resilient infrastructure.

But we and other developing countries cannot engineer this multi-billion dollar transition on our own.

The World Bank, IMF and the host of other major development banks present in Bali must deliver for the most vulnerable. Finance ministers of developed countries must deliver on their promises and ensure climate-sensitive investments flow rapidly and soon.

If this demand seems unfair let us look at the global economy. We are all living in an increasingly intertwined world with complex supply chains.

Take the Philippines. Exports include cathodes, semiconductors, refined copper, and bananas.

The country’s leading export markets are China, the US, Japan, Singapore and Germany. Every time weather extremes slam our shores, every time the seas break our defences, every time flooding inundates our cities and fields, those critical supply chains are at risk.

So we need to reframe the age-old debate on climate finance. This is investing in the world’s future, where every whirring cog is important to keep the global economy spinning.

The World Bank has already indicated it will stop investing in new coal. It now needs to drive an ambitious new low carbon investment agenda that will support cleaner, more efficiently produced power, Governments in the developed world can follow its lead by removing fossil fuel subsidies worth an estimated $5 trillion every year.

Governments in the developing world can follow its lead by moving away from expensive, unreliable, and highly polluting carbon intensive power generation to cleaner, more affordable, more reliable means of generating energy.

And they can take tougher steps to protect their vast natural resources, from Indonesia’s soaring rainforests to the Marshall Islands’ vast ocean territories.

The IPCC report is clear: we have the solutions, we have the technology. We know what we need to do to protect our children.

What we need now is leadership. Next month the CVF launches a world first: an all-day digital climate summit. We will use this as the basis for driving further ambition around the world.

The future of Majuro and Manila and the rest of the world depends on it.