Global Powers and Climate Change
It is, at this point, a well-documented fact that worldwide, climate change will cause more severe weather, from high temperatures and droughts to unpredictable storms that wreak havoc on a large scale. Left unchecked, climate change will also put some species in danger of extinction as it slowly strips away their habitats and food supplies. Other animals are forced to change their habits, from where they live to migration patterns. Plants will also face the same troubles, especially those that thrive in particular environments.
One pain point in the climate change debate stems from the fact that developing nations stand to be the hardest hit by climate change, yet they lack the financing and infrastructure to cope with the effects. In addition, while some developing nations have now become major producers of greenhouse gases, historically, they have contributed very little. An estimate by the Center for Global Development puts developed nations’ (particular the U.S. and many European countries) contribution at 79% of all greenhouse gases released into the atmosphere from 1850 until 2011.
Many global powers have pledged to help the countries most at risk protect themselves from climate change, to the tune of $100 billion by 2020. Some of that is public funding, but to reach the goal, it is becoming increasingly more important to tap private capital.
These funds are typically allocated to one of two applications: mitigation or adaptation. Mitigation is about helping to reduce greenhouse gases and keeping temperatures under the widely accepted threshold of 2 degrees Celsius. According to research by the World Resources Institute, most financing for climate change goes toward mitigation — as much as 80 percent, depending on the source. However, adaptation is just as important: it can include providing farmers with drought-resistant seeds, building infrastructure to protect against flooding, and generally increasing an area’s resiliency by giving inhabitants ways to diversify their income. Adaptation helps people survive the effects of climate change that we are already experiencing, as well as the effects we will see in the future even while we work to reduce carbon in the atmosphere.
U.S. investors can join the fight against climate change in other nations, directing much-needed private capital toward these much-needed projects. For example, many U.S. financial institutions offer green bonds issued by the World Bank, and there are many other green bonds issued by governments across the world. The Adaptation Fund, which is devoted to funding adaptation projects in the countries that will be hardest hit by climate change, also accepts donations.
This is why events like COP21 in Paris are important — addressing these sorts of challenges requires a concentrated global effort and cooperation. Protecting the planet requires capital, innovation, and a commitment from everyone.
