09 Dec 2015 08:10am
By Pearl Coetzee
PARIS, 09 DEC (NAMPA) - Namibia is faced with difficult choices with regards to where to focus the countrys limited financial resources, but has identified climate change as a critical threat to the economy.
The Minister of Environment and Tourism, Pohamba Shifeta made the remarks on Monday during a panel discussion with representatives from banking institutions on the sidelines of the 21st session of the Conference of the Parties (COP21) climate talks underway here.
The European Investment Bank, World Bank, Asian Development Bank and 23 other leading financial institutions from around the world agreed to adopt the 'Five Principles to Mainstream Climate Action'.
The principles highlight practical and operational approaches to integrate the climate into the core investment and advisory functions of a financial institution. They outline how financial institutions can commit to climate strategies; manage climate risks; promote climate smart objectives; improve climate performance; and account for climate action.
As the Ministry of Environment and Tourism, there is a need for us to convince other ministries and private institutions of the threat of climate change and the need to budget and invest accordingly for climate change adaptation and mitigation.
We believe that these principles will assist us to raise awareness of the importance of climate change among other stakeholders and encourage the necessary investment and actions to make us more climate resilient, he said.
Scaling up climate finance is a critical need for Namibia. Namibias Intended Nationally Determined Contribution (INDC) report estimated that around US dollars 33 billion (about N.dollars 490 billion) would be required to achieve a 90 per cent reduction in greenhouse gas emissions by the year 2030.
For a developing country such as Namibia, this is a massive investment, which needs to be mobilised from a range of sources, according to Shifeta.
Namibia has established its own Environmental Investment Fund (EIF) that is leading the process of environmental fiscal reform in the country and which is providing loans and grants for green technologies and community-based environmental projects across the country.
For starters, we will seek to integrate these principles into the operations of the EIF. But what we particularly need is for commercial banks to come to the table to finance our transition to a low carbon economy.
There are massive investment opportunities in the areas of renewable energy, sustainable transport and water, and energy efficient technologies amongst others. I believe these principles can be useful to identify these investment opportunities and to bring financial institutions on board in the fight against climate change.
The five voluntary principles to mainstream climate action within financial institutions were initially developed by a group of multilateral development banks (MDBs) and several members of the International Development Finance Club (IDFC), a network of national, regional and international development banks.
Meanwhile, civil society organisations and non-governmental organisations said these principles lack climate leadership at the worlds largest banks. They claimed that not one principle mentioned the major role financial institutions have to play in decarbonising the global economy. This is first and foremost by signing the Paris pledge to quit coal and publicly committing to phasing out financing for coal mining and coal-fired power worldwide, according to a statement issued by BankTrack, Friends of the Earth France, as well as Rainforest Action Network, before the event took place.
The urgency of addressing the biggest drivers of climate change has never been more pressing than it is here at the COP 21 summit, and yet the worlds fossil fuels still do not appear in these new climate principles. While some financial institutions have recently started to cut their financing for coal mining and coal power, the sector still refuses to collectively recognise that the one key climate action they need to take is to phase out their financing of fossil fuels, the statement added.
Fossil fuel is a general term for buried combustible geologic deposits of organic materials, formed from decayed plants and animals that have been converted to crude oil, coal, natural gas, or heavy oils by exposure to heat and pressure in the earth's crust over hundreds of millions of years.
By signing the voluntary principles, the financial institutions, together representing more than US dollars 11 trillion (about N.dollars 160 trillion), are pledging to continue to integrate climate considerations into their investments and advisory functions in an effort to scale up their efforts to address climate change.
COP 21 ends on Friday.