Leaders from governments, the investment community and financial institutions announced at the UN Climate Summit today that they will mobilize hundreds of billions of dollars for financing low-carbon and climate resilient pathways amd a major advance was made towards setting a proper economic price on greenhouse gas emissions.

These commitments will involve more than $US200 billion of financial assets by the end of 2015, vastly expanding the opportunities for profitable investments that provide social benefits and strengthen climate resilience around the world, including in the least developed countries and Small Island Developing States.

Pledges for Green Climate Fund

The announcements include a mix of public and private financing, including pledges by donor and developing countries to an initial capitalization of the Green Climate Fund. Mr Ban said:

The Summit has opened the door for donors to contribute to the Green Climate Fund. It is only a start. But we see that public investments in climate change are able to leverage private investments on a much larger scale.

The new financing, according to the announcements, would be available by the end of 2015, when countries will be finalizing a new universal climate agreement.

The new commitments will give a significant boost to efforts to mobilize the US$100 billion per annum by 2020 that has been pledged for climate financing for developing countries. Ban Ki moon said:

I am very impressed by the financing mobilized at the Summit by both the public and private sector. This will serve as a catalyst in finalizing a universal and meaningful agreement at Paris on climate change in 2015.

Price on Carbon

The Summit also marked a major advance in efforts by governments and businesses to set a price on greenhouse gas emissions, a step that offers investors and consumers an accurate reflection of the true cost of goods and services.

At the Summit, countries and more than 1,000 companies endorsed the need for developing mechanisms that would adequately reflect the true costs relating to pollution and emissions.

The private sector announcements were made by an unprecedented coalition of financial institutions, pension funds, insurance companies, development banks and commercial banks, represented at the highest level, which had never previously acted together on climate change at such a large scale.

The Summit Announcements for Climate Financing Include:

• A coalition of institutional investors has committed to expediently decarbonize US$100 billion and to measure and disclose the carbon footprint of at least US$500 billion in assets under management.
• Three major pension funds from North America and Europe announced they would accelerate their investments in low-carbon investments across asset classes up to more than $31 billion by 2020.
• Commercial banks will provide US$30 billion in new climate finance by the end of 2015 by issuing green bonds and other innovative financing initiatives.
• The national, bilateral and regional development banks of the Inte rnational Development Finance Club (IDFC) announced that they are on track to increase their direct green/climate financing to $100 billion-a-year for new climate finance activities by the end of 2015.
• The insurance industry has committed to double its green investments to US$82 billion by the end of 2015 and announced it would increase the amount placed in climate smart investments to ten times the current amount, by 2020.
• Developed and developing countries have started pulling together to capitalize the Green Climate Fund (GCF), by pledging more than US$2 billion.
• The European Union announced a commitment of US$2.5 billion to be channeled to the developing countries during 2014-2015, with a focus on adaptation and mitigation as part of an overall commitment of US$18 billion in flows to developing countries for climate financing by 2020.

See full UN Announcement on Finance