Similar to the Africa Climate Summit[1], discussions in the NYC Climate Week revolved around critical topics such as the clean energy revolution, integrated energy solutions, and transition in the transportation sector, known as the fastest-growing contributor to climate change and responsible for a substantial 23% of global emissions. Electrification in the heavy-duty freight sector, forging collective efforts for electric vehicles in the global south, and how buildings, fleets, and grids can fuel the future were addressed in different sessions. On the other hand, the transition to a sustainable energy future presents multifaceted challenges: As a shift to electric trucks occurs, existing electrical infrastructure must adapt to changes in the fuel source. Through the newly projected charging needs, questions arise about the sufficiency of renewable energy sources and the imperative for grid infrastructure upgrades to bolster capacity and distribution systems and underpin the integration of an increasing proportion of renewables into the energy mix. In this regard, the investment becomes crucial in heavy-duty freight sector, as it drives the electrification of freight movement, which forges a sustainable transportation future that not only remains accessible to all but also reaches underserved communities. Moreover, there will not be enough energy produced for all the users if there is insufficient effort toward energy efficiency; thus, deploying integrated energy solutions, including climate-smart buildings, electrified buildings, and sustainable energy systems, leverages power plants for electricity, heating, and cooling. Energy losses and waste heat must be addressed, seeking ways to store or repurpose them, all underpinned by renewable energy sources. In essence, a path to the circular economy hinges on preserving energy at its highest utility and optimizing its use through digital means. As these challenges are navigated, we must remember that a clean and sustainable future is not just a vision but a collective imperative that requires effective regulation, collective partnerships, and well-structured policy frameworks.
Sustainability-linked financial products, including bonds and KPI-linked bonds, promote sustainable financial practices, de-risk low-carbon investments, and provide tangible avenues for investors[2] to align their capital with environmentally responsible projects. The leading financial institutions underscore that it is worth noting that the market deeply underprices climate-related financial risks, making low-carbon investments less risky than ever before. Besides, private sector participation through bond issuance financing renewable energy projects in developing countries enables institutional capital to finance opportunities in the global south efficiently and transparently. For example, only in September, Masdar, a leading financial institution, contributed 2 billion of equity to provide 4,5 million dollars to unlock Africa’s clean energy potential. Leveraging private investment is an incontrovertible need and goes far beyond financing as, despite the high interest, inflation, and economic uncertainty, renewables remain the most cost-effective method of electricity generation.
Since energy has become a focal point, with technology advancing more rapidly than the corresponding policy amendments in the energy sector, the evolving energy landscape requires close attention to policy alignment and federal-level and/or regional solutions. In addition, locally based renewable generation projects offer nations only environmental benefits but also enhanced energy security and independence. For instance, regional and local initiatives, such as Maryland’s ambitious GHG reduction targets of 60 percent by 2030 and British Columbia’s carbon tax collection and co-capitalize decarbonization investments with the industry through the Climate Accountability Act, demonstrate the importance of locally-led transition practices which bring consistency and long-term commitment.
Protecting and regenerating nature isn’t just an environmental concern; it’s a strategic imperative for businesses striving to achieve their climate goals, enhance resilience, and meet consumer expectations. As another crucial topic during the NYC Climate Week, nature-based solutions offer a pathway, although often challenged by unsecured and unpredictable funding levels and the crucial need for engagement with local communities and indigenous groups to prevent the erosion of trust. The significance of nature-based solutions in supporting climate agendas and Sustainable Development Goals (SDGs) cannot be overstated. Moreover, Earth Observation technologies, including space-based remote sensing and Edge AI (which are essentially smart sensor networks and systems that can collect information deployed on the ground or ocean and often managed by local communities), are already being used as instrumental measure nature’s value and benefits it provides, including the effectiveness of nature-based solution. As businesses seek to leverage AI in support of nature-based solutions, private sector investment emerges as a vital force for mitigation and responsible business growth. Critical discussions surrounding the Global Biodiversity Framework at COP28 should lead to establishing national targets within Nationally Determined Contributions (NDCs). As a last underscored point, a collaborative approach involving developers, governments, supply chains, and financial institutions can apply policies prioritizing and promoting nature as a key solution for climate change, environmental justice, habitat loss, and biodiversity preserving laws.
NYC Climate Week, 2023, brought together numerous leaders who emphasized the importance of the Environmental Justice program. This program serves as a dedicated platform to elevate the voices and narratives of those who disproportionately bear the burdens of climate impacts but have historically been excluded from the decision-making process. It signifies a commitment to learning from and empowering the most vulnerable communities to take the lead and cut the red tape while placing environmental justice at the forefront of all climate discussions.
On top of that, the global food system to 21-37% of total GHG emissions and agriculture’s contribution to climate change took center stage in the summit’s deliberations. Land-based ecosystems and regenerative strategies were highlighted so as to preserve the climate. The Food program examines how we can cut GHG from food production and agriculture and focuses on sustainable eating, land restoration, Indigenous land management, healthy soils, and more.
NYW Climate Week has served as a robust platform spotlighting sustainable finance practices and highly underscored that many emerging markets are at the front lines of climate change and lack the capacity and financing needed to speed up the energy transition. Recognizing this critical gap, 2DII has been expanding its work in emerging markets with an initial focus on Latin America and Asia. Furthermore, as the significance of biodiversity was emphasized during the flagship sessions of NY Climate Week, we take pride in centering our efforts and committing to work in greater depth on nature-based solutions, biodiversity conservation, and restoration, along with our fruitful research area of retail investor impact.
[1] Please see the blog post published by 2DII, available at: https://2degrees-investing.org/blogs/africa-speaks-with-one-voice-and-forges-a-unified-strategic-blueprint/
[2] 2DII has pioneered a novel science-based framework by designing a new science-based framework. For more details, please refer to the following: https://2degrees-investing.org/resource/the-impact-potential-assessment-framework-ipaf-for-financial-products/
