TEPIC, Mexico (THOMSON REUTERS FOUNDATION) - Climate change should be grasped as an opportunity to attract vast capital flows into low-carbon investments, create jobs and spur economic growth, rather than viewed as a money-absorbing burden, top officials and experts said.
Yet while trillions of dollars are potentially available for climate investments and countries like India are blazing a trail in bringing cheap solar power to millions, making sure the world's poorest benefit will prove a major challenge, a World Bank meeting heard late last week.
"It's the biggest opportunity in the history of the world - it's the biggest investment opportunity, but we have to have a clear vision, we have to have policy leadership...to bring the world community together to get the financing that is needed to move the momentum more quickly," former US Vice President Al Gore told the discussion.
World Bank President Jim Yong Kim said financing climate action could offer a more lucrative home for US$8.5 trillion ($11.84 trillion) in negative interest rate bonds, US$24.5 trillion in very low-yielding government-type bonds and a further US$8 trillion in cash, though a clear strategy still needed to be hammered out.
"Quite apart from what you think about climate change, there are opportunities for investments that will give you higher yield than any of those investments in which over US$40 trillion is sitting right now," Kim said.
Swedish Minister for Finance Magdalena Andersson said her country - which introduced a carbon tax 25 years ago - had combined significant emissions cuts with economic growth.
"We really need to mainstream climate policies in all investments and all political decisions," she said. "But we know that the most cost-effective way of getting investments in the right direction... is to put a price on carbon." In the United States, 70 per cent of new electricity generation capacity last year came from solar and wind, noted Gore, outlining an opportunity to create a global industry based on clean energy sources, retrofitting buildings and adopting sustainable agriculture and forestry.
"What the world needs is the vision that the solution to our global economic malaise is precisely the solution to the climate crisis," said Gore, who thought the United States was more than 50 per cent likely to remain in the Paris climate change agreement.
The key is how to unlock financing for economic growth that also brings climate benefits, according to former UN climate chief Christiana Figueres.
Friday's launch of a US$2 billion green bond fund backed by the International Finance Corporation and asset management firm Amundi could help drive climate investments in developing countries, she added.
"Thinking that climate action is expensive and a burden, and is a responsibility, is so five minutes ago," she said. "The exponential growth of technologies and the drop in prices (have) made this the best opportunity - and this is (the) story of growth of this century." Following China's lead, countries like India are utilising solar power to "leapfrog" expensive electrification programmes and roll out cheap, clean supplies to those without access to power, the experts said.
Ensuring the world's poorest countries can tap investment to develop climate-resilient infrastructure and agriculture remains crucial, said the World Bank's Kim.
"The poor say we have the boot of climate change on our necks every day," he said.
The world is already dealing with crises linked to climate change pressures, from famine in Africa to Louisiana declaring a state of emergency due to coastal erosion, noted the panel.
"We cannot forget the social justice element of climate action," said Kim. "We've got to maintain our focus and make sure it doesn't all go towards fancy new technology, but (is) going towards, for example, making sure that every time it rains, people don't lose their homes."