Investing in Climate Change Technologies by The Wilberforce Society

Investing in Climate Change Technologies Editors: Nisha Francine Rajoo, James Weber

Investing in Climate Change Technologies: A Global Survey Nisha Francine Rajoo, James Weber et. al.

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Investing in Climate Change Technologies: A Global Survey Nisha Francine Rajoo, James Weber et. al.

SECTION 1

SETTING THE STAGE – THE THREATS OF CLIMATE CHANGE

“There is nothing opaque about this new data. The illustrations of mounting impacts, the fastapproaching and irreversible tipping points are visceral versions of a future that no policymaker could wish to usher in or be responsible for.” Christiana Figueres Executive Secretary UNFCCC 2010-2016 The urgency surrounding the climate crisis can be expressed in two statements. 1. 10% of all anthropogenic carbon emissions since 1750 have occurred in the last 5 years.

2. The concentration of carbon dioxide (CO ) in the atmosphere at the time of writing, 415 part 2

per million by volume (ppmv), is 48% larger than it was in 1850.

The speed of increase is at least 100 times that of any period over the last million years and has led to a CO concentration not witnessed for over 2 million years. The last time CO levels were 2

this high, the Earth was 2-3°C warmer than today and sea-levels were 25m higher. Such a world would be unrecognisable today; well over 1 billion people would find their homes underwater. The scientific principles behind carbon dioxide’s ability to increase the amount of energy absorbed by the planet are undisputed; it is simple physics. Indeed, one of the first suggestions that CO could raise the temperature of the planet was made in 1896 by Svante Arrhenius, long 2

before complicated climate models existed. There is, however, more uncertainty about how the Earth will respond to progressively greater levels of warming.

Carbon Dioxide Information Analysis Center, US Dept of Energy NOAA, Earth System Research Laboratory, Global Monitoring Division 3 Robinson, M.M., Dowsett, H.J. and Chandler, M.A., 2008. Pliocene role in assessing future climate impacts. Eos, Transactions American Geophysical Union , 89(49), pp.501-502. 4 Dwyer, G.S. and Chandler, M.A., 2008. Mid-Pliocene sea level and continental ice volume based on coupled benthic Mg/Ca palaeotemperatures and oxygen isotopes. Philosophical Transactions of the Royal Society A: Mathematical, Physical and Engineering Sciences , 367(1886), pp.157-168. 5 Arrhenius, S., 1896. XXXI. On the influence of carbonic acid in the air upon the temperature of the ground. The London, Edinburgh, and Dublin Philosophical Magazine and Journal of Science , 41(251). 2

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Investing in Climate Change Technologies: A Global Survey Nisha Francine Rajoo, James Weber et. al.

Since the pre-industrial period, generally taken to be 1750, the average surface temperature 6

across the planet has risen by 1.0°C with some regions having warmed considerably more than this. While that might not sound like a lot, it is important to remember that the vast majority of 7

that warming has taken place over the last 50 years. Carbon emissions are not merely continuing - they are increasing year on year and the dynamics of the atmosphere mean that even if no more CO were emitted, further warming would occur; the processes involved typically become more 2

severe as CO levels and temperatures increase. 2

The first part of this report provides an objective assessment of the current situation and the future projections while also describing the major impacts that climate change will have on the planet. This will provide context for investors for the specific technologies discussed as investment opportunities in subsequent sections. The bulk of the physical science assessment is 8

based on the IPCC 2013 report and the IPCC 1.5-degree report.

Rates of Change

CO and temperature have varied in the past but not over the same speed currently observed. 2

A major cause for concern and uncertainty regarding climate change stems from the speed at which humans are changing the planet. From gas extracted from ice cores and supported by other studies such as tree ring width, there exists a detailed record of atmospheric CO

concentration and temperature dating back around 800,000 years. This record, as shown in 10

Figure 1, shows fluctuation of both CO and temperature. Noting the scale of the horizontal 2

axis, it is clear that even the most rapid changes in CO , at most about 100 ppmv in magnitude, 2

have occurred over time periods on the order of approximately 10,000 years; around 100 times slower than the much larger human-driven perturbation occurring at present. Such rapid

Met Office Hadley Centre Met Office Hadley Centre 8 Stocker, T.F., Qin, D., Plattner, G.K., Tignor, M., Allen, S.K., Boschung, J., Nauels, A., Xia, Y., Bex, V. and Midgley, P.M., 2013. Climate change 2013: The physical science basis. 9 First, P.J., 2018. Global warming of 1.5 C An IPCC Special Report on the impacts of global warming of 1.5 C above pre industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty. 10 Lüthi, D., M. Le Floch, B. Bereiter, T. Blunier, J.-M. Barnola, U. Siegenthaler, D. Raynaud, J. Jouzel, H. Fischer, K. Kawamura, and T. F. Stocker. 2008. High-resolution carbon dioxide concentration record 650,000-800,000 years before present. Nature 453(7193):379- 382, doi: 10.1038/nature06949. 7

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perturbations mean future climate change may in fact be very different to the behaviour of the climate in the past and will also certainly have more severe impacts due to their speed. Further inspection of Figure 1 reveals an interesting relationship between CO and temperature. 2

First, many of the CO rises occur after the temperature starts to increase, raising a valid cause 2

and effect question, and serving as a target for criticisms of climate change rhetoric. However, rather than disproving the link between greenhouse gases and climate, it highlights an important feature of the climate; that of feedbacks. Most of the historical temperature changes were in fact triggered by small changes to the Earth’ orbit around the sun rather than increases in CO . The 2

rise in temperature reduced the ice coverage over high latitude regions and released CO from 2

the ocean (gases are less soluble in warmer liquids), increasing atmospheric CO which, in turn, 2

led to a further rise in temperature. The coupling of temperature and CO is termed a feedback 2

loop; one variable affects a second which in turn affect the first. In this case, increases in both variables augmented the other and so the feedback is termed positive.

Figure 1 – Variation of CO2 and temperature over the last 800,000 years. Figure 1 is approximately 10 years old, hence lower current CO concentration stated. 2

Feedbacks in the climate system are a source of uncertainty in future climate prediction, particularly because it is very hard to calculate how natural feedbacks, which typically operate over long periods, will respond to the rapid perturbation driven by humans. They are discussed in further detail in the non-linearity section.

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Future Projections

Assessments of future climate using a range of climate models and emission scenarios all point to further warming with estimates of between 0.3°C (following aggressive efforts to reduce GHG emissions) to 4.5 °C in a scenario where no action is taken to mitigate climate change. While there is little dispute in the scientific community regarding the amount of warming experienced since the pre-industrial period, there is greater debate about future climate change. This is not as to whether the world will continue to warm, rather it is precisely how quickly it will warm, how parts of the Earth system which are extremely sensitive to temperature may respond and when the Earth may reach tipping points which result in irreversible change to the climate. Climate prediction is performed chiefly by computer models which aim to replicate the Earth system to the best of our knowledge and are run on supercomputers. These models are based on the same principles as those which deliver weather forecasts but tend to have more comprehensive linking of all aspects of the atmosphere, land, ocean and sea-ice (termed the “Earth System”). These models divide up the atmosphere into boxes and inside each box, equations based on the laws of physics are solved to calculate a multitude o f physical variables including temperature, pressure, cloud cover, precipitation, chemical composition and wind speed. Each box exchanges information with its neighbours and this process is repeated for the length of the model run. Boxes adjacent to surface receive emissions of various gases based on economic and scientific projections which can be varied to probe the effect a particular change may have. While these models are a simplification of reality, they are validated against existing observations. Scientists from universities and research institutes such as the UK Met Office or National Oceanic and Atmospheric Administration (NOAA) in the USA perform experiments using different climate models. Standard tests are run on each model, for example an increase in CO

concentration of 1% per year since the pre-industrial, and the results of the different models compared. These studies and their conclusions regarding potential future climate form a major part of the Intergovernmental Panel on Climate Change’s (IPCC) reports. Current projections are based around Representative Concentration Pathways (RCP) developed for the fifth Assessment Report from the Intergovernmental Panel on Climate Change (IPCC).

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The four RCPs are based on different future scenarios where CO and other greenhouse 2

concentrations evolves differently based on different responses to climate change. On the extreme, high end of the spectrum is the High Emissions case (RCP 8.5), which is consistent with a ‘worst-case’ scenario where CO emissions are allowed to continue growing 2

unabated, governments do nothing, mitigation technology adoption is slow, and population grows rapidly. On the other end of the spectrum is the Low Emissions case, which is an ambitious scenario where carbon emissions decline and eventually go negative (RCP 2.6). 11

The mean global surface temperature change for the different RCPs is shown in Figure 2. The greatest warming is observed at the poles but in the RCP 8.5 case, no terrestrial region warms by less than 5°C.

Fig 2 - Global surface temperature change under different RCPs. The coloured numbers denote the number of different climate models used to calculate the change in surface temperature. Worryingly, climate models predict that only the ambitious RCP2.6 scenario would likely limit temperature increases to less than 2 degrees Celsius above the pre-industrial average. When viewed together with the UN Paris Agreement, where the international community committed to keeping global warming to ‘well below 2 degrees Celsius above pre-industrial levels’ and pursuing a 1.5°C target, as well as the most recent IPCC report which focused on the relative

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Investing in Climate Change Technologies: A Global Survey Nisha Francine Rajoo, James Weber et. al.

benefits of keeping to a warming of 1.5°C as opposed to 2°C, it is clear that ambitious and purposeful changes need to happen if countries are serious about staying on track, and the consequences of not staying on track are dire. It is hard to ascribe one RCP as being the “business as usual” (BAU) case since many different model experiments have been run with BAU conditions and returned varying results of temperature rise. Furthermore, mitigation efforts are projected to increase with reducing costs of renewable energy technologies. Rather it is more helpful to note that the world is on course to reach 1.5 °C above th e preindustrial between 2032 and 2050 and if all countries meet their National Determined Contributions (climate actions such as GHG reduction targets), a warming of 3°C by 2100 is expected. Such an increase would cause tremendous disruption to society and the climate; these are discussed in the following sections. However, few, if any, countries are on course to meet their NDCs, suggesting much greater warming is not only possible, but the most likely outcome. Sea Level Rise

A sea level rise of 3 feet arising from a 2°C temperature rise is projected to have an economic cost of $14 trillion USD per year and displace up to 200 million people. One of the most devastating effects of rising temperatures is the rise in sea level. This is driven by melting of land-based glaciers and ice sheets as well as the fact that water expands when heated. Under unchecked emissions growth scenarios like RCP8.5, sea levels rise between 0.6 and 2.4m (2-8 ft) are expected by 2100. Even keeping a temperature rise to 2°C would result in a rise of 0.3-1m (1-3.3 ft). The range of values represents the uncertainty inherent in modelling complex situations. It is possible that sea level rise could greatly exceed even these upper bounds should parts of the Greenland and Antarctic ice sheet collapse more rapidly than expected. Indeed, in June 2019, the Greenland ice sheet was observed to be losing 3 billion tonnes of ice a day, 5 times the average loss observed over the last 40 years.

Sea level rise will cause major destruction and disruption. More than 600 million people live in regions less than 10 m above sea level. A significant fraction of these people is in less-developed countries which are often ill-prepared to handle the rising sea levels stand to be worst-affected;

National Snow and Ice Data Centre, University of Colorado Boulder

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Investing in Climate Change Technologies: A Global Survey Nisha Francine Rajoo, James Weber et. al.

for example, low-lying Bangladesh is expected to be one the worst affected countries. The impacts are not limited to developing countries, however. Cities including as Miami, New York, New Orleans, Boston, Shanghai and Mumbai would all feel severe consequences of rising sea levels. The global economic costs will be immense: a sea level rise of 0.86m (3 ft) is predicted to have a monetary cost of US$14 trillion per year, while a 1.8m (6 ft) rise would cost up to US$27 trillion per year, around 30% of global GDP and would result in a loss of around 1.70 million 2

km of land, an area almost the size of western continental Europe. Much of this would occur in important agricultural areas such as the Nile delta, thus threatening global food security. This loss of habitable land will also lead to the displacement of over 200 million people.

Precipitation Changes & Droughts

Total global precipitation is expected to increase in a warmer climate yet many areas already facing severe water stress will receive less precipitation and lose more water due to rising surface temperatures. Precipitation is vital for agriculture, biodiversity and many other industries. It is also acutely linked to the climate. A change to the radiative balance of the atmosphere (the difference between the energy received from the sun and the energy lost to space) from increasing GHG concentrations results in a warmer atmosphere which can hold more water vapour. Overall precipitation is expected to increase in a warmer climate.

Since the start of the 20 century, precipitation has increased in most areas but crucially decreased in others where precipitation is already sparse.

Stocker, T.F., Qin, D., Plattner, G.K., Tignor, M., Allen, S .K., Boschung, J., Nauels, A., Xia, Y., Bex, V. and Midgley, P.M., 2013. Climate change 2013: The physical science basis. 14 Stocker, T.F., Qin, D., Plattner, G.K., Tignor, M., Allen, S.K., Boschung, J., Nauels, A., Xia, Y., Bex, V. and Midgley, P.M., 2013. Climate change 2013: The physical science basis. The Wilberforce Society Cambridge, UK

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Most long-term climate studies have predicted further precipitation change as a result of climate 15

change, as shown in Figure 3 . It is anticipated that Northern Hemisphere high latitude regions will receive more precipitation under both 1.5°C and 2°C of warming. Increases in precipitation is also predicted in some parts of the tropics while reductions on precipitation are anticipated for much of Southern Europe, parts of sub-Saharan Africa and Brazil. Sub-tropical dry regions are likely to become even drier.

Under even a 2°C warming, the average length of droughts will increase by four months, exposing some 388 million people to water scarcity, and 194.5 million to severe droughts. Africa is predicted to be particularly affected increasing droughts, particularly given the importance of subsistence farming. Southern Europe, North Africa and the Near East are anticipated to continue to become drier.

Figure 3 – Comparison of change to precipitation under warming scenarios of 1.5 and 2 ° C.

A comparison of the predictions for 1.5°C and 2°C of warming also highlights the significant difference even an extra 0.5°C can make. The north-east region of Africa, encompassing Egypt’s 95m people who already face issues of water security, is projected to have 30% less precipitation

First, P.J., 2018. Global warming of 1.5 C An IPCC Special Report on the impacts of global warming of 1.5 C above pre industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty. 16 Stocker, T.F., Qin, D., Plattner, G.K., Tignor, M., Allen, S.K., Boschung, J., Nauels, A., Xia, Y., Bex, V. and Midgley, P.M., 2013. Climate change 2013: The physical science basis. 17 First, P.J., 2018. Global warming of 1.5 C An IPCC Special Report on the impacts of global warming of 1.5 C above pre industrial levels and related global greenhouse gas emission pathways, in the c ontext of strengthening the global response to the threat of climate change, sustainable development, and efforts to eradicate poverty. The Wilberforce Society Cambridge, UK

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for the 2°C than the 1.5°C scenario. In addition to general increases in average precipitation (with certain exceptions), extreme precipitation is projected to increase. Extreme weather events

Under a 2°C warming scenario, 37% of the world’s population will experience at least on severe heatwave every 5 years. With global warming, extreme weather events such as hurricanes and heatwaves are predicted to become both more frequent and more severe. Heatwaves will become more frequent and more severe with the annual economic costs alone of increased mortality due to extreme temperature projected to reach US$135 billion under the worst-case scenario by 2100. Given the global population and wealth distribution, most of the people who suffer such heatwaves will be in countries less well-equipped to mitigate the effects. The monsoon wind strengths are projected to weaken in the future, but precipitation is expected to increase due to increased atmospheric moisture. These changes, alongside an anticipated lengthening of the monsoon season, is likely to have serious conseq uences for the billions of people who live in the affected region.

Between 2016 and 2018, the 6 major hurricanes to hit the USA caused losses of $330 billion and over 3,000 fatalities. Hurricanes are also likely to become more potent in a warmer atmosphere. This is because warmer air can hold more water, which releases significant quantities of energy (latent heat) when it condenses out of the gas phase in the atmosphere. Such energy acts to increase the wind speed and the overall destructive power of a hurricane. Attributing a single event to anthropogenic climate change is impossible due to the immense complexity of the climate system and the coupling between different aspects. Rather assessments are made to consider how much more likely an event was given the changes man has forced upon the planet. This is done by running climate models with and without anthropogenic

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emissions. For example, researchers at the Met Office determined that the European summer heatwave of 2003, which killed over 10,000 people, was made twice as likely by man’s activities. Wildfires The wildfires which devastated California in 2018 causing over 100 deaths and over US$5 billion in damage were some of the most severe seen in the state in the last 100 hundred years. In other parts of the world where wildfires were once a rarity, they are becoming more prevalent. Forest fires affected an area 10 times greater than usual in Sweden last year alone. As with any natural event, it is impossible to attribute it solely to climate change but elevated temperatures and reduced precipitation to already relatively dry regions are making wildfires ever more common. Biodiversity

Climate change is highly likely to exacerbate already serious issues with declining biodiversity which will affect all life on Earth. Biodiversity is crucial for life on Earth. Damage to ecosystems from a rapidly changing climate can have far reaching consequences, rendering the region unsuitable for the wildlife it had previously supported. Humans have also derived many different compounds with medicinal properties from diverse habitats and their destruction threatens the discovery of future drugs. The predominant driver of biodiversity loss is the direct actions of humans. Deforestation, excess use of fertilisers and pesticides and poor waste management destroy or damage huge areas of terrestrial and aquatic ecosystems. This has severe consequences for wildlife with more than 40% of insect species declining. Insects in particular play a crucial role in nature by p ollination and thus their loss is likely to have severe consequences for humans too. A recent report by the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services (IPBES) warned that 1 million species risk extinction due to the actions of humans with biomass of wild animals having fallen over 80% since the preindustrial period. The economic consequences, while certainly not the only important factor, are staggering with the loss of pollinators putting over US$550 billion worth of crops at risk and land degradation reducing global land productivity by 23%.

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Climate change is likely to make any such biodiversity loss worse but further perturbing any ecosystem from equilibrium with a combination of increased surface temperatures and changing precipitation. Water Security

Even under a 1.5°C warming scenario, a third of Himalayan glaciers will have disappeared by 2100, threatening the water security of 1.6 billion people. Less than 3% of the water on Earth is freshwater and approximately 70% of that is locked up in the Greenland and Antarctic ice sheets which are losing mass at an accelerating rate. Disruption to precipitation patterns, with droughts increasing in frequency and severity, and the melting of glaciers and mountainous water supplies will only worsen water security in future decades. Combined with over exploitation of groundwater supplies and growth in population and wealth, water security is likely to become a major international political issue. This has already been witnessed in the dispute between Egypt and Ethiopia regarding the damming of the Nile river. Around 4 billion people currently live without sufficient access to fresh water for at least one 19

month of the year. As with many of the impacts of climate change, such change will be endured by some of the poorest and most vulnerable people on Earth. Geoengineering

Geoengineering projects are sometimes heralded as the solution to climate change but should be treated with caution as their consequences are still unknown Geoengineering is the practice of altering the Earth system, typically the atmosphere, to produce a change in climate. In that sense, the rapid increase in atmospheric CO due to fossil fuel 2

combustion is geoengineering, albeit a particularly dangerous and uncontrolled kind. Geoengineering has been heralded by certain groups as a “silver bullet”, the solution to climate change, fostering the exceptionally dangerous attitude that society can continue as usual and a geoengineering solution will “save the day” in the future. This is not a view widely held in the climate science community; indeed, certain types of geoengineering are viewed as dangerous in of themselves since the results are still uncertain.

World Economic Forum, 2019

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Certain geoengineering schemes are relatively harmless. For example, efforts have been made in Peru to paint the mountains exposed by receding glaciers white to increase the amount of radiation reflected back into the atmosphere and thus reduce surface temperature rise. While harmless, overall this unlikely to produce a major change in climate. However, other ideas, which deliberately perturb the atmosphere are likely to produce more uncertain consequences. One proposal is the injection of sulphate aerosol particles (or their precursors) into a region of the atmosphere called the stratosphere. At between 15 and 50km in altitude, the stratosphere is above the day to day weather and particles can reside there for months if not years. The tiny aerosol particles can reflect solar radiation back into space. Such a phenomenon occurs naturally; powerful volcanic eruptions can injection sulphur dioxide into the stratosphere. For example, after the eruption of Mount Pinatubo in 1991, the Earth’s temperature over the following few 20

months was 0.5 °C lower than expected. An operation which could produce a significant contribution to mitigating global warming by cooling the planet by approximately 0.3°C over 20 years is likely to cost around US$3.5 billion per year with the major challenge being injecting the 21

particles into the atmosphere. However, there remain serious concerns about the other effects large scale sulphur injection could have. Aerosols also absorb radiation and so heat the surrounding the atmosphere, affecting wind patterns and important climatic phenomena like the 22

monsoon. As any injected aerosol will be distributed widely by winds, their effects, beneficial or otherwise, cannot be confined to a single country or region. This means that any schemes could lead to diplomatic tensions with the actions of certain countries or bodies affecting Another potential option is that of marine cloud brightening (MCB). This works by the inject ion of sea water into the lower atmosphere where the presence of salt aids additional cloud formation. Clouds reflect solar radiation and thus cool the atmosphere. While MCB is likely to have few negative consequences, the complexity of the atmosphere means even climate models struggle to predict the results with different models producing different answers. Sulphate injection is viewed as particularly dangerous since its effects are uncertain and once it is in the atmosphere, little can be done to change the resulting behaviour.

Self, S., Zhao, J.X., Holasek, R.E., Torres, R.C. and King, A.J., 1993. The atmospheric impact of the 1991 Mount Pinatubo eruption. 21 Smith, W. and Wagner, G., 2018. Stratospheric aerosol injection tactics and costs in the first 15 years of deployment. Environmental Research Letters , 13(12), p.124001. 22 Smith, W. and Wagner, G., 2018. Stratospheric aerosol injection tactics and costs in the first 15 years of deployment. Environmental Research Letters , 13(12), p.124001. The Wilberforce Society Cambridge, UK

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These geoengineering issues also fail to address other issues such as increasing ocean acidification (and the severe consequences for biodiversity) caused by enhanced CO . Furthermore, certain 2

schemes like sulphate aerosol would require continuous operation with potentially rapid changes occurring if the injection were halted. Ultimately, the most effective geoengineering will be carbon dioxide removal (discussed later). Other methods are at best short-term solutions and at worse could themselves perturb the climate even further from its original state, with serious global consequences. Continued Effects

Even with emission reduction, the excess CO in the atmosphere will continue to the warm the 2

planet for millennia while slow heating of the oceans will lead to long term sea-level rise. The Earth has already warmed by approximately 1.0°C but even if CO emissions were ceased 2

immediately, the Earth would continue to warm. CO is very long lived, existing in the 2

atmosphere for thousands of years on average, all the while trapping outward-bound radiation and warming the atmosphere. Left to its own devices, it would take many millennia for CO to 2

return to pre-industrial levels. Furthermore, the oceans have absorbed a significant fraction of the excess energy, reducing the atmospheric and land temperature rises. Water heats up more slowly, in part due to the slow mixing of colder water from the depths and so the oceans will continue to warm for many millennia. Therefore, while the Earth has only experienced a relatively modest temperature rise so far, we are effectively locked in for further long-term warming even if CO were halted today. 2

Tipping Points

The climate system is complex and further perturbation could push it past certain tipping points, resulting in serious, irreversible changes. The Earth System is to some extent self-regulated which normally prevents rapid change. For example, if the Earth warms slightly, it will radiate more energy back into space, opposing further temperature rise and preventing rapid warming. Aside from major perturbations such as impacts from asteroids which rapidly and dramatically alter climate, changes to the Earth system in prehistory been much slower than the changes we are observing today (see Fig 1). Therefore, there

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is real danger that the natural responses to change in the Earth system will not be strong or fast enough to oppose the changes caused by man. At the extreme end of this behaviour is the concept of tipping points; responses by the Earth system to perturbations which cannot be reversed. One example is the triggering of methane release from beneath the Arctic sea floor or permafrost in high latitudes due to rising temperatures. Methane, another potent greenhouse gas, would raise temperatures potentially triggering even more methane release. Such a rapid change would be irreversible on human relevant timescales. Tipping points are exceptionally difficult to incorporate accurately into climate models and many models struggle to represent such a perturbation, further increasing prediction uncertainty.

The Carbon Budget

The proven hydrocarbon reserves of all the major oil companies contain 5 times as much carbon as we still can emit into the atmosphere and avoid catastrophic climate change. Given the temperature change already witnessed and the inevitable further rise due to ocean warming, a significant reduction in carbon emissions is required. To put this in perspective, the concept of a carbon budget has been developed. This considers the amount of carbon emitted in human history and projects the limits of what can be emitted while keeping the temperature rise below 1.5°C. The complexity of the Earth system and the uncertainty in how it may response means a range of values are generally calculated. Two studies conclude that to have a 50% chance of meeting the 1.5°C target, no more than approximately 800-900 GtCO can be released, 2

corresponding to approximately 22 years’ worth of current emissions. To put this in perspective, total global cumulative emissions since 1890 have been approximately 2200 GtCO . In other 2

words, mankind, with a smaller population and lower global wealth, has exhausted well over 2/3 of its budget already. Conclusion

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This section has provided a brief overview to the scientific basis of climate change and some of the impacts it will have. Climate change will affect all aspects of society in all parts of the world. Despite claims that it may open new shipping lanes in the Arctic and aid temperature zone agriculture, in the vast majority of cases, it will have deleterious effect, causing the greatest strife to the most vulnerable people on Earth. However, times of threat also present opportunities as well. As with many of the challenges that mankind has encountered in its history, technology presents perhaps humanity’s best chance of achieving solutions of the required scale and speed to combat global warming as well as effective climate mitigation and adaptation. Investment provides a strong catalyst for technological advances, and early adopters who are ahead of the curve will receive the greatest payoff. Those who can adapt to a changing world will be the most successful. Climate change as a Global Public Health Problem

The World Health Organization (WHO) estimated that in 2012, 12.6 million deaths (23% of worldwide deaths) were attributable to modifiable environmental factors, of which many can be influenced by the driving forces of climate change The effectiveness of our response to climate change will define health and wellness globally for generations to come. In 2009, the Lancet Commission on Managing the Health Effects of Climate Change called climate change “the biggest global health threat of the 21st century ” but 23

also concluded in a later study that tackling climate change could be “ the greatest global

opportunity of the 21st century” as international climate change mitigation and adaptation policies are able to protect human health from climate change while resulting in “health co 24

benefits” . Since then, cumulative evidence has shown that climate change puts the lives and wellbeing of billions of people at increased risk, characterised by multicausal pathways, uncertainty and complex interactions between economic, social and ecological factors. At the same time 25

physical and psychological health of billions is undermined. The recognition that the foundations of long-term good health in the global population are greatly dependent on the 23

Costello, A., Abbas, M., Allen, A., Ball, S., Bell, S., Bellamy, R., Friel, S., Groce, N., Johnson, A., Kett, M. and Lee, M., 2009. Managing the health effects of climate change: lancet and University College London Institute for Global Health Commission. The Lancet, 373(9676), pp.1693-1733. 24 Watts, N., Adger, W.N., Agnolucci, P., Blackstock, J., Byass, P., Cai, W., Chaytor, S., Colbourn, T., Collins, M., Cooper, A. and Cox, P.M., 2015. Health and climate change: policy responses to protect public health. The Lancet, 386(10006), pp.18611914. 25 Chowdhury, R., Lawrence, R., van Daalen, K., Hawkes, S. and Feldmann, J., 2018. Reducing NCDs globally: the under recognised role of environmental risk factors. The Lancet, 392(10143), p.212. The Wilberforce Society Cambridge, UK

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continued stability and functioning of the biosphere’s life-supporting systems combined with an appreciation of the scale and type of influence climate change has on health, requires a new perspective towards health and climate policy that sheds light on the complexity of the systems upon which we depend.

Health impacts can be directly (e.g. extreme weather events, heatwaves, drought) or indirectly mediated, through effects on economies, social structure (e.g. conflict, migration) and ecosystems (e.g. agriculture loss, change in the pattern of infectious disease), as illustrated in Figure 4 below.

Figure 4: Climate Change and its direct and indirect impacts on health and wellbeing.

Like the other impacts of climate change, the health hazards of climate change are: 1. Global - transcending national boundaries. 2. Inequitable - GHG emissions mainly originate from developed countries while the health risks concentrate in developing countries.

WHO | Climate change and health. WHO 2017 Watts, N., Adger, W.N., Agnolucci, P., Blackstock, J., Byass, P., Cai, W., Chaytor, S., Colbourn, T., Collins, M., Cooper, A. and Cox, P.M., 2015. Health and climate change: policy responses to protect public health. The Lancet, 386(10006), pp.18611914. 27

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3. Avoidable - through public intervention, public health safety systems and adaptation.[2][6] While the impact of climate change on health is felt globally, certain countries are affected disproportionally with the highest burden placed on vulnerable populations (elderly, children, coastal populations) and low-income and middle-income countries (LMICs). Undermining determinants underpinning good health, climate change exacerbates social, economic and 28

demographic inequalities . Concerns about how a changing climate will affect health is reflected in the United Nations Framework Convention on Climate Change, the Global Framework for Climate Services and the recently adopted World Health Organization Strategy on health, environment and climate change. The health hazards of climate change require for coordinated international public health policy integrated into international climate policy to build climate resilient health systems. At the same time health can act as a vocabulary to accelerate the political will in climate change action. To achieve this decisionmakers and stakeholders at all levels need access to reliable and relevant scientific information on the connections between our environment and our health.

The wide scope impacts of climate change on health are discussed below. Weather related extremes As discussed in the previous section, reports of extreme weather events and disasters (e.g. floods, cyclones, heatwaves, cold waves) have more than tripled since the 1960s.

These inhibit the

effective operation of health services by affecting the infrastructures which support healthcare combined with an increase in service demand due injuries, diseases, long-term disabilities and 31

emotional anguish from the loss of loved ones or traumatic memories. For example, increasingly variable rainfall patterns are likely to reduce fresh water supply, which can

Watts, N., Amann, M., Ayeb-Karlsson, S., Belesova, K., Bouley, T., Boykoff, M., Byass, P., Cai, W., Campbell -Lendrum, D., Chambers, J. and Cox, P.M., 2018. The Lancet Countdown on health and climate change: from 25 years of inaction to a global transformation for public health. The Lancet, 391(10120), pp.581-630. 29 Moran AE, Roth GA, Narula J, Mensah GA. 1990-2010 Global Cardiovascular Disease Atlas. Glob Heart 2014;9:3–16. doi:10.1016/j.gheart.2014.03.1220 30 World Meteorological Organization. Atlas of health and climate. World Meteorological Organization; 2012 31 Curtis S, Fair A, Wistow J, Val D V, Oven K. Impact of extreme weather events and climate change for health and social care systems. Environ Health 2017;16:128. doi:10.1186/s12940-017- 0324- 3 The Wilberforce Society Cambridge, UK

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compromise hygiene and increase the risk of diarrhoeal disease which kills 500,000 children aged under 5 every year.

Floods and cyclones Extreme weather events such cause a range of health issues. Firstly, there is the very alarming physical impact on health from the threat of drowning, electrocution and other physical trauma. There are also less obvious impacts such as enhanced exposure to water-and vector borne infectious diseases (as a result of human contact with effluent and other unclean water), increased mental health issues associated with traumatic situations and damage to basic infrastructure and 33

health systems which inhibits efficient treatment. Of course the importance of these different effects depends heavily on the characteristics of the flood, pattern of exposure and underlying vulnerability of the population. For example, the flooding in 2010 in Pakistan resulted in damage or destruction of 200 hospitals and clinics, inhibiting treatment of the 6 million people who needed medical care affected.

Droughts Droughts are a major impact of climate change, affecting most heavily areas already suffering from water scarcity. The food and water shortages which result exacerbate existing health problems in many ways including increases in malnutrition and disease from a lack of drinking water as well as disruption to local health services. For example, in Ethiopia, areas affected by drought witnessed a child mortality rate 34% higher than unaffected areas. The complexity of the problem and some of the responses are shown in Figure 5. As with most health impacts, the most vulnerable people are the worst affected.

Pachauri, R.K., Allen, M.R., Barros, V.R., Broome, J., Cramer, W., Christ, R., Church, J.A., Clarke, L., Dahe, Q., Dasgupta, P. and Dubash, N.K., 2014. Climate change 2014: synthesis report. Contribution of Working Groups I, II and III to the fifth assessment report of the Intergovernmental Panel on Climate Change (p. 151). Ipcc 33 World Meteorological Organization. Atlas of health and climate. Worl d Meteorological Organization; 2012 34 World Meteorological Organization. Atlas of health and climate. World Meteorological Organization; 2012 The Wilberforce Society Cambridge, UK

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Figure 5: Drought as a risk factor for complex public health impacts and the areas of public health response. Drought has a variety of community and health impacts as shortage of water 35

and diarrhoea that interact with each other. Communities can response through a variety of health emergency response mechanism including epidemic surveillance and mobile teams. Heat-related events As discussed earlier, a global warming of 2°C would result in 37% of the population experiencing a heatwave at least once every 5 years. Between 2000 and 2016, an extra 125 million vulnerable 36

people were exposed to heatwaves . The cost to human health is likely to be severe. For example, during 2018 heatwaves in Japan, where temperatures exceeded 41°C, 20,000 people were hospitalised with heat stroke.

Even though heatwaves will occur more frequently as a result of climate change, their effects on 38

health are still an area of active research . Short-term heat acclimatization usually takes 3–12 days. Yet complete (long-term) acclimatization to an unfamiliar thermal environment may take several years.[19] Increased heat in a human body can result from a combination of external heat from the environment and internal metabolic processes. Rapid rises in heat gain, e.g. during a heatwave, compromises the body’s ability to regulate temperature and can result in several 39

illnesses including heat cramps, heat exhaustion, heatstroke and hyperthermia . These effects 35

World Meteorological Organization. Atlas of health and climate. World Meteorological Organization; 2012 Watts, N., Amann, M., Ayeb-Karlsson, S., Belesova, K., Bouley, T., Boykoff, M., Byass, P., Cai, W., Campbell -Lendrum, D., Chambers, J. and Cox, P.M., 2018. The Lancet Countdown on health and climate change: from 25 years of inaction to a global transformation for public health. The Lancet, 391(10120), pp.581-630 37 The, L., 2018. Heatwaves and health. Lancet (London, England), 392(10145), p.359 38 The, L., 2018. Heatwaves and health. Lancet (London, England), 392(10145), p.359 39 WHO | Information and public health advice: heat and health. WHO 2018 36

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are particularly dangerous for vulnerable people such as the very young and the elderly (see Figure 6). People in physical work are at particular risk as the body will be unable to release heat produced within the body under certain outside temperatures and humidity, resulting in 40

heatwaves having a significant economic cost as well . Temperature extremes can also worsen 41

chronic conditions such as cardiovascular or diabetes-related conditions . Providing healthcare remains challenging and many hospitals are poorly designed to cope with heat, built instead with 42

ways to retain warmth . Increasing temperatures will also reduce the number of extreme cold spells. Although these seem to show an ambiguous relationship with number of winter deaths and could therefore result in a small decrease in mortality, the impact of cold-related deaths in highly uncertain and will be 43

largely outweighed by heat-related deaths .

Figure 6 Estimated annual mortality attributable to climate change in 2030 (blue) and 2050 (orange)

Air Pollution

Wu, X., Lu, Y., Zhou, S., Chen, L. and Xu, B., 2016. Impact of climate change on human infectious diseases: Empirical evidence and human adaptation. Environment international , 86, pp.14-23 41 The, L., 2018. Heatwaves and health. Lancet (London, England), 392(10145), p.359 42 The, L., 2018. Heatwaves and health. Lancet (London, England), 392(10145), p.359 43 Health and climate change Report by the Secretariat CONFERENCE OF THE PARTIES TO THE UNITED NATIONS FRAMEWORK CONVENTION ON CLIMATE CHANGE 44 World Health Organization. (2014). Quantitative risk assessment of the effects of climate change on selected causes of death, 2030s and 2050s. World Health Organization. https://apps.who.int/iris/handle/10665/134014 The Wilberforce Society Cambridge, UK

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Enhanced urban temperatures are likely to exacerbate existing air pollution issues and, along with more frequent and severe heatwaves, pose serious public health problems with health costs from air pollution under the worst-case RCP 8.5 scenario predicted to reach $30 bn by 2100. While it is still quite uncertain as to how climate change will affect air pollution, the health impact of air pollution is an area of increasing concern. The main pollutants deleterious to human health are ozone (O ), oxides of nitrogen (NO ) and particulate matter (PM) which consists of tiny 3

particles of liquid or solid suspended in air. These particles arise from soot from incomplete combustion, organic matter, sulphurous compounds and dust. Following the Global Burden of Disease (GBD) study estimates, 6.4 million of global deaths in 2015 were caused by indoor and ambient air pollution (with 4.2 million of these due long term PM exposure).[13]. The size of PM particles has been directly linked to their potential fo r 2.5

causing health problems. Generally speaking, the smaller the particle, the more deeply it is able to penetrate and deposit in the respiratory tract. High concentrations of ambient PM and PM 2.5

are associated with a variety of health impacts (e.g. lung cancer, asthma, lower respiratory infection, cardiovascular diseases including stroke/coronary heart disease) after penetrating deep into lung passages and entering the bloodstream. For example, exposure to PM is estimated to 10

cause around 4 additional deaths per 1000 people from cardiovascular mortality alone. With its diverse impacts on health, air pollution is now considered as the world’s largest environmental health threat. Effective management of air quality is necessary to reduce health risk to a minimum. Climate-sensitive infectious diseases By 2030, an extra 60,000 deaths from malaria are expected to the spread of the disease. Infectious diseases take a heavy toll on populations around the world, affecting all aspects of 46

society . The life cycles and transmission of many infectious diseases are linked directly to climate variables (temperature, precipitation, wind, sunshine) and indirectly via the migration of people and wildlife as a result of climate change. Thus, a changing cli mate is likely to can

Kelly, F.J. and Fussell, J.C., 2015. Air pollution and public health: eme rging hazards and improved understanding of risk. Environmental geochemistry and health , 37(4), pp.631-649 46 World Meteorological Organization. Atlas of health and climate. World Meteorological Organization; 2012 The Wilberforce Society Cambridge, UK

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therefore impact health through impact on the development, survival and reproduction of pathogens, their hosts and their interaction with human beings. A major area of concern is the spread of disease carriers. As temperatures continue to rise, insects in low-latitude regions may find new habitats in mid or high-latitude regions. This leads to a geographical expansion of diseases to previously non-endemic regions where mitigation measures are likely to be absent. Some recent studies suggest that vector-borne diseases as malaria, tick-borne encephalitis, yellow fever, plague, dengue fever and African trypanosomiasis have already been distributed to new regions. Based on this, computer models have projected an increase of 60,000 malaria deaths for the year 2030.

However, temperature can also have a restricting effect on the distribution of vectors, with extreme temperature inhibiting the reproduction of certain disease carriers.

Therefore,

accurately predicting the effects of climate change on infectious disease distribution and severity remains a persistent challenge with much uncertainty. This uncertainty in and of itself is highly problematic as it hinders effective mitigation efforts being taken.

Health and climate change policy Reducing GHG emissions protects human health from the direct and indirect impacts of climate change (e.g. policies to reduce short-lived climate pollutants could result in avoiding 0.7-4.7 49

million premature deaths from ambient air pollution) . However, human health can also benefit through other mechanisms independent of those relating to the modification of climate risk: so called health co-benefits of mitigation. For example, switching dietary intakes to environmentally more sustainable healthy diets and an increase in safe active transport reduces greenhouse gas emissions while reducing all-cause mortality risk with 20-30% by lower rates of obesity, diabetes and coronary heart disease. Many other co-benefits across different sectors exist, which can influence savings on healthcare expenditure. The Paris Agreement includes specific references 50

to health, giving entry points to integrate public health in Nationally Determined Contribution s. 47

World Health Organization. (2014). Quantitative risk assessment of the effects of climate change on selected causes of death, 2030s and 2050s. World Health Organization. https://apps.who.int/iris/handle/10665/134014 48 Altizer, S., Ostfeld, R.S., Johnson, P.T., Kutz, S. and Harvell, C.D., 2013. Climate change and infectious diseases: fro m evidence to a predictive framework. science, 341(6145), pp.514-519 49 Shindell, D., Kuylenstierna, J.C., Vignati, E., van Dingenen, R., Amann, M., Klimont, Z., Anenberg, S.C., Muller, N., JanssensMaenhout, G., Raes, F. and Schwartz, J., 2012. Simultaneously mitigating near-term climate change and improving human health and food security. Science, 335(6065), pp.183-189 50 Markandya, A., Sampedro, J., Smith, S.J., Van Dingenen, R., Pizarro -Irizar, C., Arto, I. and González-Eguino, M., 2018. Health co-benefits from air pollution and mitigation costs of the Paris Agreement: a modelling study. The Lancet Planetary Health, 2(3), pp.e126-e133 The Wilberforce Society Cambridge, UK

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Yet in 2015, only 67% of Parties identified health as the priority for adaptation and 15% identified health as a priority for mitigation in their intended NDCs, as preparation of the COP21 Paris 51

Agreement negotiations. Turning climate change policy into public health actions maximises co-benefits for health. Role of Carbon Capture and Storage and related technologies in CO mitigation and removal 2

Carbon Capture and Storage (CCS) is the long-term underground storage of CO as a means of 2

reducing atmospheric CO concentrations. Anthropogenic CO is captured using chemical 2

solvents at the point of formation, typically large industrial plants or power stations. The CO is 2

then compressed and transported through pipelines into deep geological reservoirs suitable for storing the CO permanently. Carbon dioxide removal (CDR) technologies, such as biofuels or 2

direct air capture, which take CO out of the atmosphere can be combined with CCS to 2

permanently store any captured CO , resulting in net negative emissions. 2

The IPCC 1.5 degree report highlights the necessity for CCS within their decarbonisation pathways, requiring nearly 20 Gt of CO removed per annum even in their middle-of-the-road 2

scenario. In particular, the role of CCS is vital within hard to decarbonise sectors of the economy such as industry, and the cost to decarbonise these sectors is much higher without the use of CCS. Emissions from the cement, plastics and metal industries account for nearly 10 Gt CO per 2

annum, around 20% of global emissions. For example, the cement industry emits 2.2 Gt CO

per annum, equating to around 5% of global emissions. Over half of these emissions are inherent to the chemical reaction required to produce cement and are largely unavoidable (the 54

other half comes from heat and electricity used in the production process). Carbon capture equipment could be fitted on existing kilns to address both the emissions produced from heat generation and from process emissions. Sectors other than industry that CCS could be applied to are decarbonisation of fossil fuel power generation and hydrogen production by reforming natural gas. Production of zero -carbon

Wiley, E., Tcholakov, Y., Pétrin-Desrosiers, C. and Al-Qodmani, L., DETERMINED CONTRIBUTIONS (INDCS). World

Medical Association . 52

First, P.J., 2018. Global warming of 1.5 C An IPCC Special Report on the impacts of global warming of 1.5 C above pre industrial levels and related global greenhouse gas emission pathways, in the context of strengthening the global res ponse to the threat of climate change, sustainable development, and efforts to eradicate poverty. 53 Energy Transitions Commission (2018), Mission Possible: Reaching net -zero carbon emissions from harder-to-abate- sectors by mid-century 54 De Pee, A.; Pinner, D.; Roelofsen, O.; Somers, K.; Speelman, E.; Witteveen, M. Decarbonization of Industrial Sectors: The Next Frontier; McKinsey & Company: Amsterdam, The Netherlands, 2018. The Wilberforce Society Cambridge, UK

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hydrogen is especially important as many see hydrogen as essential for decarbonising heating, industry and areas of transport, sectors accounting for a large fraction of global emissions. This section will review the current worldwide situation of CCS, identify the current barriers to large scale deployment and address the policy action required to incentivise further investment in this area. Worldwide status of CCS There are a total of 37 carbon capture and storage projects that are currently planned or in operation worldwide with a total capacity of 40 million tonnes (Mt) of CO sequestered per year.

This amounts to just under 0.1% of global emissions, about as much as the UK emits in a month. The sites range from scientific projects injecting small volumes of CO for monitoring purposes 2

to larger commercial projects injecting millions of tonnes a year. A large fraction of these commercial CCS projects captures the CO for use in Enhanced Oil Recovery (EOR), where 2

CO is injected into oil reservoirs to flush out any remaining oil. Other commercial CCS projects 2

are found where financial incentives or penalties on CO emissions have allowed CO storage to 2

become economically viable. Most scenarios for limiting global warming to the Paris Agreement target of under 2°C assume a 56

major role for CCS. For example, the Shell Sky Scenario predicts that by 2050 the world will be storing 5 billion tonnes (Gt) of CO per year, 125 times current storage volumes, and using 2

5.1 Gt in CO based products rising to 10.9 Gt of storage and 8.3Gt usage by 2100. More 2

intermediate scenarios estimate 7-8 Gt of carbon sequestration per year by 2040 (Fig.11) . These scenarios limit the use of CCS within the power industry. With the price of electricity from renewables fast becoming cost competitive with electricity generation from coal and natural gas, the added cost of CO capture and storage will make it unlikely for electricity generation 2

combined with CCS to be financially viable.

GCCSI (2017) The global status of CCS: 2017 Shell (2018), Shell Scenarios Sky – meeting the goals of the Paris agreement 57 Energy Transitions Commission (2017), Better Energy, Greater Prosperity 56

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Fig. 11: Breakdown of the CO 2 capture per annum that may be required in 2050. 2 Up to 8 Gt of CO 2 capture may be required across the hard-to-decarbonise sectors of the economy.

The main role of CCS within these scenarios is in the full decarbonisation of the industrial sector. CCS is the only way to remove process emissions from cement production and may be the most cost-effective way to decarbonise the steel and chemical industry in areas without good wind and solar resources. Hydrogen is likely to play a key role in the decarbonisation of shipping, heavyduty transport, domestic heating and industry. Currently, the cheapest and most scalable method of hydrogen production is by steam methane reformation, which requires CCS to remove the CO produced. However, even in this intermediate scenario, the world would need to build more 2

than one hundred plants a year over the next 20 years to reach the levels of CCS required. Cost of CCS The high capital cost of infrastructure needed for CCS is one of the main hurdles preventing CCS from being deployed at the scale required. The Petra Nova coal -fired power plant in Houston was retrofitted with a carbon capture system that captures over 1.5 MtCO2 per year from the waste gases. The cost of the system was around a billion dollars. Retrofitting coal and gas power plants with carbon capture capabilities is more expensive than capture for processes such as natural gas processing or steam methane reformation. Fig. 12 shows the cost of each CCS 58

technology in $USD per tonne of CO stored. This includes the cost of CO transport and 2

Global CCS Institute, 2017, Global Costs of Carbon Capture and Storage

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storage, which is between $7-12 per tonne CO when onshore, and $16-37 per tonne when 2

offshore.

Fig. 12: First-of-a-kind costs for different CCS technologies and example carbon prices in place today.7 CCS costs for power generation and industry are higher than carbon taxes currently in place

There are many examples of technologies that have been deployed at scale despite large capital costs, hence the following section will look at existing barriers to large scale deployment of CCS. Barriers to large scale deployment Financial incentives to carry out CCS must exist if developers are to invest in the infrastructure and operation costs. Financial incentives could either be a reward for capturing and storing the carbon or a cost incurred for emitting it. Eighty per cent of global emissions are not covered by a carbon pricing, and half of the emissions that are covered are priced at less than $10 per tonne 59

CO . The Sleipner Field in the North Sea is an example of when the financial cost of emission 2

incentivised the capture and storage of CO . In 1991 Norway imposed a $50/t CO tax penalty 2

for venting CO into the atmosphere. At $17/t CO , it was cheaper to separate CO from the 2

extracted natural gas and inject it into the subsurface which made a good business case for CCS. Commercial use of CO may also incentivise carbon capture. EOR is currently one of the few 2

commercial opportunities available for captured CO . The price of CO is linked to the price of 2

World Bank Group, 2018. State and Trends of Carbon Pricing 2018, Washington: World Bank Group

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oil and revenue from the sale of CO for EOR may be sufficient to cover costs of capture and 2

transport of CO . 2

Another barrier to deployment is first movers in infrastructure development are disadvantaged over those who wait which increases the time taken to reach large scale deployment. Shared knowledge of the strengths and pitfalls of previous projects is beneficial for development of the technology but has the adverse effect that second and third movers can improve the design and operation of future plants, which can result in stranded assets for first movers. For example, a capture plant may become uncompetitive over time as successive facilities become more optimised. Private sector funding needs to increase by orders of magnitude to achieve the scale of deployment required. However, the risk associated with projects is currently perceived by banks to be too high for debt financing. In a disaggregated business model, there may be separate businesses handling the capture, transport and storage stages of the project. Each part of the value chain relies on the delivery of the other parts, which introduces cross-chain risk for all members. Conversely, in a vertically integrated business model where one business takes responsibility for all stages of the project, knowledge of the full value chain is required. Controlling operations outside an area of expertise may introduce risk. If the barriers to deployment are addressed and scale of CCS required to meet climate change targets is met, conservative estimates of the cost of CO capture predict costs falling by a half.

The next section will focus on the policy actions required to de-risk projects and encourage investment. The future of CCS A price on carbon is an essential part of any policy framework to encourage the development of CCS as it provides a financial incentive to reduce emissions. A price on carbon can take several forms including a carbon tax, emissions trading scheme or tax credits. When pricing carbon, especially with the long lead times for CCS projects, it is important to create long-term certainty in the market to provide businesses with a fair planning horizon. This would involve indicating

Rubin, E., Azavedo, I., Jaramillo, P. & Yeh, S., 2015. Trade Effects and Policy Implications. Energy Policy, pp. 198-218

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to potential developers how the price of carbon is expected to change, and the criteria required to access any incentives. The price on carbon does not need to be high for significant resultant CCS deployment. At a price of $40/t CO , it is estimated that 450 Mt CO per year could be captured, utilised and stored 2

globally by deploying CCS on all the low-cost opportunities, around 1% of global emissions. For the costlier application of CCS to industry and power, the price on carbon would need to be higher. There are some promising carbon pricing schemes worldwide that have been put in place, although they are few and far between. California is a good example of a strong financial market for CCS deployment. In early 2019, California amended their Low Carbon Fuel Standards (LCFS) scheme to allow CCS to play a role in cutting emissions. This means that credits are now

Fig. 13: Hub and cluster disaggregated business model. 12 Shared infrastructure reduces the unit cost of CO 2 storage and individual businesses can focus on their strengths.

given to transportation fuels whose lifecycle emissions have been reduced by CCS, and these credits are currently trading at $180/t CO . The US also gives federal credits at $18/t CO for 2

CO used in EOR and $29/t CO for permanent CO storage rising to $35/t CO and $50/t CO 2

by 2026. The credits from the two schemes can be stacked, providing a large financial incentive of over $200/t CO for CCS in California. 2

61 62

(OECD-IEA-UNIDO 2011 Technology Roadmap Carbon Capture Industrial Applications) Clear Air Task Force (2017) The role of 45Q Carbon Capture Incentives in Reducing Carbon Dioxide Emissions

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Governments can reduce the overall cost of CCS and manage cross-chain risk by encouraging a 63

shared transport and storage network (Fig. 13). Emission intensive industries often exist near each other due to the provision of resources such as ports, rail links and fossil fuel feedstock. Industrial clusters such as this provide an excellent opportunity to develop CO transport and 2

storage infrastructure that can be shared amongst the multiple sources of CO emissions. A 2

planned example of such a cluster is the Port of Rotterdam in the Netherlands. Industry in the area is responsible for 16% of the Netherlands total CO emissions and the project aims half 2

emissions in the Rotterdam region by 2025. A cluster model reduces the unit cost of CO storage 2

as the cost of pipeline infrastructure is spread across the system. The operational risk is reduced, as there are multiple providers of CO across the system and businesses can also focus on their 2

strengths. For example, a steel plant operator does not need to worry about how to store CO . 2

However, a problem still exists with first investors facing the initial cost of building the infrastructure and taking on the risk associated with a single value chain. It is the role of policy to provide support for these early investors and help reduce that risk. This can be achieved with capital support in the early stages of development. The government can invest in establishing a regulatory framework that provides the private sector with the incentives to invest in a transport and storage network using grants, tax credits and concessional loans. Another solution is for government to invest directly in CCS facilities to e stablish infrastructure and cover the cost of operation. The infrastructure can later be shifted to the private sector, which is the case for transport, telecommunications and power generation infrastructure. As the price of CO increases and the cost of CCS infrastructure decreases, the 2

requirement for capital support will diminish and normal market forces will drive investment. Worldwide distribution and storage of CO has the potential to become a large market and 2

forecasts predict market size will double by 2022 to reach $4.2 billion. The Northern Lights Project in Norway is the first storage facility capable of receiving CO from various industrial 2

sources. The site consists of a CO receiving terminal, an offshore pipeline and a CO storage 2

facility. CO is shipped from three industrial facilities in Eastern Norway and transported to the 2

CO receiving terminal on the west-cast of Norway where it is sent through pipelines to several 2

Global CCS Institute 2019: Policy Priorities to incentivise large scale deployment of CCS Rotterdam CCS Cluster Project: ‘Case study on lessons learnt’ 65 Stratistics Market Research Consulting - Carbon Capture and Storage (CCS) – Global Market Outlook (2016-2022) 66 Northern Lights project: Developing an ‘open source’ service for transport and storage of European CO 64

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injection wells in the North Sea. Shipping of CO avoids the need for expensive pipeline 2

infrastructure and allows transportation of CO from a wide region. 2

However, the London Protocol currently prohibits the cross-border transfer of CO , which 2

means the CO can only transported within Norway. An amendment to the protocol is required 2

before other countries can import CO to storage facilities such as this. The necessary and 2

significant public funding that is required to scale CCS is dependent on a positive public perception of CCS and the popular opinion that it is a necessity for complete decarbonisation of the economy. It is a concern that CCS exists to justify the longevity of fossil fuels. Greenpeace says it, “opposes 68

CCS as a dangerous distraction from the safe, secure, 100% renewable future we all want”. It is important to educate the public about the role of CCS in decarbonising sectors that have no other feasible routes to decarbonisation. Private investors should look to markets with the financial incentives and policy frameworks in place that make CCS a commercial opportunity when looking to invest in projects. It is up to government policy to create as many of these markets as possible, and as more investment goes into CCS the requirement for capital support will diminish. Summary CCS has a role to play in decarbonisation of the global economy, but this will be limited by the timeframe for large scale deployment. The cost to reduce emissions in hard-to-decarbonise sectors such as industry will be much greater without CCS, so a bigger push within those sectors is required, although high upfront costs will need to be overcome. High infrastructure costs and a lack of financial incentive to reduce emissions are the major challenges CCS faces to reaching widescale deployment. Financial incentives to carry o ut CCS must exist if developers are to invest in the infrastructure and operation costs. Financial incentives could either be a reward for capturing and storing the carbon or a cost incurred for emitting it. There are markets such as California where existing financial incentives and policy frameworks make CCS a commercial opportunity for private investment. Pressure must be put on 67

Convention on the Prevention of Marine Pollution b y Dumping of Wastes and other Matter (London Convention 1972 www.imo.org 68 Greenpeace (2016) Carbon capture and storage a costly, risky distraction The Wilberforce Society Cambridge, UK

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governments to create as many of these markets as possible, and as more investment goes into CCS the requirement for capital support will diminish. Carbon dioxide removal technologies Direct Air Capture and Carbon Storage (DACCS) ● DACCS pulls CO directly out of the air and stores it permanently in the subsurface 2

● The technology is currently at the demonstration phase, capturing only small volumes of CO

● Financial incentives for carbon dioxide removal will encourage further development of DACCS BECCS ● Bioenergy with carbon capture and storage (BECCS) is the production of energy using a biological feedstock combined with the storage of any CO release in the process. 2

● High capital expenditure and feedstock costs make BECCS uncompetitive with other energy sources unless incentives for negative emissions technologies exist ● The feedstock used in BECCS must be sustainably sourced for net negative emissions ● Limited feedstock supply means that BECCS must be used only to decarbonise sectors of the economy that have limited other options, such as aviation Introduction There are sectors of the economy that will be very difficult to fully decarbonise, even by 2050 and beyond. For the whole economy to become net zero, any remaining emissions will need to be offset by taking CO out of the atmosphere using carbon dioxide removal (CDR) technologies 2

combined with carbon capture and storage (CCS). The pathways to net zero in the IPCC 1.5 degree report largely rely on some level of CDR, and even middle-of-the-road scenarios require 1

up to 20 Gt per year of CO removal. It is estimated that between 2 and 16 GtCO per year of 2

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CDR could be required globally by 2050.

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It is important to stress that the most effective,

scalable and low-cost option for CDR is reforestation and afforestation. The mean carbon removal estimates for afforestation by 2100 are around 1.1 GtCO /yr with a potential 3.3 2

GtCO /yr removed if large scale afforestation is deployed. This would require an area 1-3 times 2

the size of France to be afforested by 2100. However, further sources of CDR will be required to meet emissions targets which opens up a large potential market for CDR technologies. Direct air capture and carbon storage (DACCS) and Bioenergy with carbon capture and storage (BECCS) are the two main CDR technologies that have been demonstrated to be technically feasible without significant side effects. This chapter will explore each of these technologies in turn, looking at the costs and current deployment, scalability and potential, and finally the barriers and requirements for large scale viability. DACCS Direct air capture (DAC) pulls CO directly out of the air using a chemical filter. Since CO only 2

makes up a small fraction of the composition of the atmosphere, large volumes of air need to be processed to extract significant volumes of CO . If the captured CO is subsequently stored 2

permanently in the subsurface, the process is known as Direct air capture and carbon storage (DACCS). Cost of DACCS Some cost estimates of DACCS have been provided by commercial developers of the technologies. They have suggested that costs of $95-120/tCO is achievable for commercial-scale 2

units, although this is the potential future cost of the technology rather than the present cost. 72

Academic literature suggests higher removal costs at $240-680/tCO . The bulk of these costs 2

come from the capital expenditure of the technology, although also included is the cost of transport and storage as well as cost of energy required by the system. There are five main developers of DACCS technologies of which two, Carbon Engineering and

Climeworks, have demonstration plants capturing CO . These two developers capture 360 2

Rogelj, J. et al., 2018. Scenarios towards limiting global mean temperature increase below 1.5 °C . Nature Climate Change, 8, pp.325–332 70 Huppmann, D., Rogelj, J., et al., 2018. Scenario analysis notebooks for the IPCC Special Report on Global Warming of 1.5°C 71 Green Earth Appeal. “Agroforestry Carbon Sequestration Rates” <https://greenearthappeal.org/co2-verification> 72 UKERC Technology and Policy Assessment 2019: Bioenergy energy with carbon capture and storage, and direct air carbon

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tCO /yr and 990 tCO /yr respectively, although only Climeworks is currently capturing CO for 73

permanent storage. The other firms sell the captured CO to different markets for commercial 2

viability. Advantages of DACCS There are several features of DACCS technologies that make them scalable and commercially attractive in the energy market. Firstly, the current DACCS systems being developed have a modular design which allows for cost reductions from mass production. This is different to largescale carbon capture infrastructure which is more specialised. The modular nature of these systems also mean that they can be deployed for demonstration and small-scale commercial use initially before scaling up. Secondly, there are no geographic constraints for DACCS which means that the positioning of the infrastructure can be optimised for economic benefit. An example of this location flexibility would be placing the DACCS facility next to a carbo n storage facility to avoid the costs of transportation infrastructure. Another example would be the placement of the DAC system near a specialised market requiring CO (e.g. greenhouses or 2

beverage companies). However, it is important to note that captured CO which is sold for 2

commercial purposes will re-enter the atmosphere eventually and so is not a net negative carbon solution. Finally, DACCS technologies can take advantage of the carbon offset potential they present. Companies are increasingly becoming interested in their carbon footprint. Some markets already have government regulations on emissions. Companies can either reduce the carbon intensity of their business or purchase carbon offsets. Commercial scale DACCS could offer carbon offsets to companies or industries that would otherwise have more expensive decarbonisation options. Barriers to large scale deployment There remain several barriers which must be addressed for large scale investment and deployment of DACCS technologies. Firstly, a price on carbon removal needs to be established to provide a financial incentive for DACCS. Most carbon pricing and emissions trading schemes penalise CO emissions but do not reward CO removal and hence do not incentivise CDR. An 2

exception to this is the Low Carbon Fuel Standards (LCFS) scheme in California which was amended in 2018 to allow DAC projects anywhere in the world to generate credits provided the 73 74

Keith, D.W. et al., 2018. A Process for Capturing CO2 from the Atmosphere . Joule, 2(8), pp.1573–1594 Climeworks 2019 Our Technology .

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captured CO is then stored permanently. Secondly, if DACCS is going to be used for climate 2

change mitigation and reversal by storing any captured CO , the existence of infrastructure 2

required for permanent storage is a pre-requisite for large-scale deployment. The current lack of infrastructure dissuades investment into DACCS. Finally, there is still uncertainly about the total net CO removal potential of DACCS technologies. The net removal from the atmosphere is 2

dependent on the source of the electricity and heating required to power the DACCS system. Since large volumes of air need to be processed to extract significant volumes of CO , the process 2

is very energy intensive. If fossil fuel-derived energy is used, the emissions released in generating the energy must be accounted for in the overall CO balance of the facility. Studies have estimated 2

that to capture 1% of the UK’s annual GHG emissions via DACCS, it would require 0.5-5.5 21

TWh/yr of electricity, roughly 1% of the UK’s electricity usage. If deployed at scale, DACCS would require a large amount of electricity and heat, and the supply and distribution of this energy would need to be considered and planned for. BECCS Bioenergy with carbon capture and storage (BECCS) is the production of energy using a biological feedstock combined with the capture and storage of any CO released during the 2

process. There are many different technologies and processes that BECCS can produce power by and these can be categorised into three main pathways: BECCS to power (bioelectricity) (the traditional idea of growing and burning crops while capturing the CO ), BECCS to gaseous or 2

liquid biofuels and BECCS to bio-hydrogen. Each option differs in cost, conversion energy efficiency (energy generated from total raw biomass energy) and CO capture efficiency (fraction 2

of total CO the biomass feedstock absorbs that is captured) 2

Over 10% of the global energy supply comes from biomass , mostly on a small-scale using biomass as fuel for cooking and heating. However, there are only five facilities worldwide using BECCS technologies with a total capacity of around 1.5 MtCO /yr captured. The only large-scale 2

BECCS facility is the Decatur plant in Illinois, producing enough bioethanol from corn to power 100,000 cars a year and capturing the CO produced during the fermentation process. Just under 2

1 Mt of the captured CO a year is stored deep in the subsurface below the plant.

California Air Resources Board (2019) Carbon Capture and Sequestration Protocol World Bioenergy Association Global Bioenergy Statistics 2017 77 Global CCS Institute: Bioenergy and Carbon Capture and Storage (2019) 76

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Cost of BECCS The main costs associated with BECCS are capital expenditure costs and the cost of feedstock. Feedstock costs are specific to the production pathway of the bioenergy and can vary in price across different regional markets. For example, solid biomass feedstock for electricity generation or industry is more expensive than coal or gas. Wood pellets in North-West Europe are around $10 per GJ compared to the $4 per GJ coal 2

price. This would add around 30% onto fossil fuel electricity prices. However, it is likely that biomass would compete with the price of coal or gas plus CCS. There are cheaper sources of bioenergy feedstock such as municipal waste which can be used as a source for biogas. It could even have negative costs, with the processers paid to take it away. However, there are limited quantities available. The capital costs of BECCS are very dependent on the type of technol ogy used. The cost of gasification and fermentation processes used to produce liquid and gas biofuels at $19-177/tCO

is cheaper than combustion processes at $88-290/tCO . However, these prices only include the 2

cost of capture, not the cost of net carbon removal. When factoring in removing supply chain and process emissions, the prices for net carbon removal from the atmosphere can be higher.

Capital costs also vary by region and are lower in China or India relative to the US and Europe due to differences in cost of capital, material and labour. Increasing demand for bioenergy and BECCS is likely to increase the costs of biomass feedstock. In a BECCS IEAGHG report, the cost of feedstock was estimated to rise from $21/MWh at 4 80

EJ of global bioenergy demand to $240/MWh at 74 EJ demand. (The total global energy supply 81

in 2016 was 576 EJ. ) This is especially worrying as the cost of BECCS is more sensitive to 21

feedstock costs (Fig. 14). Maintaining a low biomass feedstock cost is more important than reducing the capital expenditure of BECCS. This could also have the result that markets with

Fuss, S. et al., 2018. Negative emissions — Part 2 : Costs , potentials and side effects . Environmental Research Letters. Available at: https://doi.org/10.1088/1748-9326/aabf9f 79 Johnson, N., Parker, N. & Ogden, J., 2014. How negative can biofuels with CCS take us and at what cost? Refining the economic potential of biofuel production with CCS using spatially -explicit modeling . Energy Procedia, 63, pp.6770–6791 80 IEA Greenhouse Gas R&D Programme (IEA GHG) & Ecofys 2011 81 IEA World Energy Balances 2018 The Wilberforce Society Cambridge, UK

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high feedstock costs could prove uncompetitive compared to markets with lower costs. This would become especially relevant if global carbon prices were imposed. The total carbon reduction delivered by BECCS in the future varies across different climate 1

models. The use of BECCS in the IPCC 1.5°C Report ranges from fossil fuel intensive scenarios requiring 22 GtCO /yr removal by BECCS to low energy demand scenarios requiring 0 GtCO /yr 2

where all the CDR is covered by afforestation/reforestation and land management. However, it is evident that intermediate scenarios will require some level of CDR from BECCS. Barriers to large scale deployment The key bottleneck for the capacity of BECCS is the total sustainable supply of biomass required for bioenergy production. Sustainable sources of biomass do not require biomass production at the expense of deforestation, competition with food production or threats to ecosystems and biodiversity conservation. There are a large range of estimates for the total sustainable supply of 82

biomass for the energy and industrial system, ranging from 50 EJ to 1200 EJ per annum. The International Energy Agency (IEA) suggest about 70 EJ of bioenergy could be supplied by

UKERC (2011) Energy from biomass: the size of the global resource

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Fig. 14: Cost of a large scale BECCS power plant as a function of feedstock cost and plant capital expenditure (CAPEX) Key assumptions are 26% conversion energy efficiency, 30kgCO 2/MWh biomass supply chain emissions, 85% capacity factor, £20/tCO2 storage cost. The cost of BECCS is more sensitive to the cost of the biomass feedstock over the CAPEX of the plant.21

sustainable wastes and residues. This includes 10-15 EJ of municipal waste, 46-95 EJ of agricultural wastes (e.g. straw and corn stover) and 15-30 EJ of wood harvesting residues. The sustainable supply of biomass is insufficient to meet the demands of all sectors which 2

currently use or have the intension of including biomass in their decarbonisation strategies. It is important that governments and industry prioritise the use of biomass within sectors that have no other means of decarbonisation. This includes aviation, the biomass supply would be able to completely decarbonise aviation and bio-feedstocks for plastics, although 28 EJ would only cover 30% of the feedstock needs so this would need to be combined with increased recycling of the current plastic stock and limit the use of bio-feedstock to compensate for losses in the chain. A possible large-scale use for biomass is in peaking power generation, but 34 EJ of biomass supply would only provide 4% of the global electricity supply, so it is important to minimise this need. The capacity of BECCS is a long way from the large-scale deployment that is required for a net zero economy and this is due to a series of preventative barriers.

IEA (2017) Technology roadmap: Delivering Sustainable Bioenergy

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BECCS plants are more expensive to run than unabated biomass plants so a financial incentive linked to the carbon dioxide removal is necessary for BECCS to be competitive. The revenue potential from the carbon dioxide removal by BECCS is thought to be more valuable th an the energy generation potential.

84,85

However, most emissions trading schemes like the EU ETS

currently have no credits for negative emissions technologies and offer no added revenue for removing CO from the atmosphere. The exception to this is the Californian LCFS scheme 2

discussed previously. Depending on the technology and wholesale energy prices, it is estimated that a CO price of between $32-240/tCO may be required for BECCS to be financially viable. 2

An IEAGHG Report estimated that a moderate CO price of $63/tCO could enable the 2

deployment of 3.5 GtCO /yr.

For BECCS to deliver negative emissions, CO removal by BECCS must outweigh the fossil 2

emissions from the biomass supply chain. This must factor in all the emissions produced along the supply chain as well as direct and indirect land use change. The energy used along the supply chain as well as energy required for the CO capture system reduces the efficiency of BECCS. 2

There is potential for a very small fraction of the raw energy from the biomass to be converted 86

into useful bioenergy (Fig. 15). If the biomass supply for BECCS can be certified as sustainable this will contribute to the positive public perception of BECCS. Three aspects of the BECCS life-cycle need to be covered by sustainability criteria with monitoring and regulation. The first is the life-cycle GHG emissions for the biomass supply. The second is sustainable management of

Mac Dowell, N. & Fajardy, M., 2017. Inefficient power generation as an optimal route to negative emissions via BECCS? Environmental Research Letters, 12(4), p.045004 85 Platt, D., Workman, M. & Hall, S., 2018. A novel approach to assessing the commercial opportunities for greenhouse gas removal technology value chains: Developing the case for a negative emissions credit in the UK. Journal of Cleaner Production, 203, pp.1003–1018. Available at: https://doi.org/10.1016/j.jclepro.2018.08.291 86

UKERC Technology and Policy Assessment (2019). Bioenergy with carbon capture and storage, and direct air carbon capture and storage (Adapted from Fajardy, M. & Mac Dowell, N., 2018. The Energy Return On Investment of negative emissions: is BECCS a threat to energy security? Energy & Environmental Science, 11, pp.1581–1594.) The Wilberforce Society Cambridge, UK

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forest used for biomass and the third is sustainability linked to broader issues such as biodiversity loss, water usage and land use change. Land Availability

Fig. 5: CO2 (left) and energy (right) leakages along a BECCS value chain. 35

Climate models predict that 100 to 800 Mha of land could be required to grow biomass for BECCS.

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The total surface used for agriculture today is 1600 Mha. Direct land use change

(clearing land for biomass production) and indirect land use change (relocation of previous agriculture to another location requiring clearing of land) can impact the BECCS CO balance 2

and also cause biodiversity losses, water use and competition with food. Future investors in BECCS will need to ensure that land is used sustainably. Incentivising the production of biomass can be difficult. The Energy Crop Scheme in the UK aimed to incentivise farmers to grow bioenergy crops on set-aside land but was discontinued due 89

to a lack of applicants. Growing energy crops on marginal and abandoned land increases the cost per tonne of biomass production due to poor land quality, even when considering the reduced land costs. If looking to increased bioenergy crop production, a stakeholder engagement study in 2016 found that the main driver for farmers is income generation and the main challenge they face is policy uncertainty.

In summary, due to high capital expenditure costs and feedstock costs, BECCS is unlikely to be competitive with other energy sources unless significant financial incentives for negative emission

Huppmann, D., Kriegler, E., et al., 2018. IAMC 1.5°C Scenario Explorer and Data hosted by IIASA FAO, FAOSTAT. Available at: http://faostat.fao.org/site/339/default.aspx 89 Committee on Climate Change (2018). Biomass in a low-carbon economy 90 Röder, M., 2016. More than food or fuel. Stakeholder perceptions of anaerobic digestion and land use; a case study from the United Kingdom . Energy Policy, 97, pp.73–81. Available at: http://dx.doi.org/10.1016/j.enpol.2016.07.003 88

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technologies exist. This could take the form of financial penalties such as a carbon tax applied to emissions of competing energy sources or financial payment given to negative emission technologies. It is also vital that the feedstock for BECCS is sustainable sourced to deliver net negative emissions. Sourcing sustainable feedstock could become a problem with increasing demand when looking to scale BECCS to the large quantities required. For this reason, it is important that BECCS is used to decarbonise sectors of the economy that have limited other decarbonisation alternatives, such as aviation. Conclusion The abatement potential of CCS, as well as carbon reduction technologies such as DACCS and BECCS is limited by the amount of investment from the public and private sector they receive. The majority of net zero emission scenarios include these technologies and there are very few feasible ways some sectors of the economy can reach net zero without utilising large volumes of CCS. It is the role of policy to create financially viable markets for CCS and CDR technologies so that they receive the large quantities of private sector funding they require for significant expansion. The costs of decarbonisation will be much greater in the long run if CCS and CDR technologies are not included in the portfolio of technologies used to mitigate severe climate change.

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Section 2 INVESTING IN CLIMATE CHANGE TECHNOLOGIES – A GLOBAL SURVEY On 23rd September 2019, asset owners part of the UN-convened Net-Zero Asset Owner Alliance representing more than US$2 trillion committed to lead the global investment industry to the highest ambition to date in driving economies to carbon neutrality by 2050, i.e. consistent with a maximum temperature rise of 1.5°C above pre-industrial temperatures. Investors are taking a step in the right direction by adjusting their portfolios in two main ways. One is a passive approach based on reducing risk, by avoiding exposure to companies that are less likely to do well in a world that is getting hotter. Those might include oil and gas companies, or those heavily exposed to coal or more highly polluting industries. A very prominent example of this was an announcement earlier in the year that the world’s largest sovereign wealth fund, which manages US$1 trillion (£770 billion) of Norway’s assets, is all set to channel investments into firms that explore for oil and gas, but will still hold a stake in firms such as BP and Shell that have renewable energy divisions. The Government Pension Fund Global (GPFG), said it would phase out oil exploration from its “investment universe”.

The second way is to consider climate change an investment opportunity and actively invest in companies that will aid or benefit from the transition to a low carbon economy. Investing in climate change does not have to mean surrendering returns. Rather, as governments and companies around the world face increasing pressure to change their behaviour, those seeking solutions to climate change will yield strong returns. The following section of this report seeks to highlight these opportunities for investment in climate change technologies that can significantly boost mitigation of and adaptation to climate change. It also seeks to point at the need to address the most vulnerable, who are already bearing the brunt of a changing global climatic system.

https://www.theguardian.com/world/2019/mar/08/norways-1tn-wealth-fund-to-divest-from-oil-and-gas-exploration

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Climate Change Mitigation Technologies Globally, the sectors which are the biggest contributors to GHG emissions include energy (electricity, buildings, transport, industries) (73%), industrial processes (20%) and land use for food and agriculture (6.5%). The most effective technologies to mitigate climate change would aim at these sectors. The technologies highlighted below are expected to be the focus of public policies, private initiatives and academic research, and therefore, in fertile investment ecosystem, supported by a variety of stakeholders.

Other important factors taken into consideration to support these technologies are related to their future potential. Escalation possibility initially required capital costs, political barriers and incentives were all aspects taken into consideration when selecting the technologies to be suggested in this report. In addition, the social aspect was also considered for some of these technologies, as they can also deliver important social benefits. With the aim of addressing different sectors that contribute to GHG emissions, the suggested technologies are among the most effective for mitigation of GHGs at different scales.

Energy

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Renewable energy production: offshore wind Power generation from offshore wind energy has emerged as a promising way for countries to expand their renewable energy portfolios and advance the necessary transformation for a sustainable energy future.

Global offshore wind investment had risen to record levels of US$27.6 billion in 2016 but fell to US$18.9 billion in 2017. Globally, investments in offshore wind are set to grow substantially over the next several years.

Source: IRENA,2018 Despite being more expensive in the short-term, offshore production is a more sustainable 93

investment from a holistic and long-term point of view 6. Onshore production causes significant negative environmental impacts in terms of aesthetic pollution and noise, and, more importantly, competes with other uses of land. With the global population growth expected for the next decades, land use will have to be highly efficient to provide food for everyone. Therefore, offshore generation presents itself as a more sustainable option, leaving land available for other important activities. In addition, adequate spots for onshore generation are frequently located far from large electricity consuming centres. Offshore production, on the other hand, can overcome this issue as half the world’s population lives in coastal areas, including large and economically

https://www.irena.org//media/Files/IRENA/Agency/Publication/2018/Sep/IRENA_offshore_wind_note_G7_2018.pdf?la=en&hash=B18 6614D923AB1F0A07D7285612C4B037057A0C0 University of North Carolina at Chappel Hill http://futureofenergy.web.unc.edu/2016/04/06/where-the-wind-blows-onshore-vs-offshore-wind-energy/ 93

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important cities. As long-term investments usually generate the best results, offshore production appears a more preferable option.

Off-grid renewables Off-grid renewable energy solutions, including stand-alone systems and mini-grids, have emerged as a mainstream, cost-competitive option to expand access to electricity. Illustrating the scalability of off-grid solutions, between 2011 and 2016, the number of people benefiting from such solutions increased six-fold, reaching more than 133 million. This includes about 100 million using solar lights (<11 watts), 24 million using solar home systems (>11 watts) and at least 9 million connected to a mini grid. Concurrently, off grid renewables capacity witnessed a spectacular three-fold increase from under 2 gigawatts (GW) in 2008 to over 6.5 GW in 2017 (IRENA, 2018a)

Figure: Case for off-grid renewable energy solutions (IRENA)

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Despite the impressive growth, the investment gap in the off-grid sector and in energy access broadly remains large. Off-grid solutions, for instance, attracted no more than 1% of the USD 30 billion committed in 2015-16 for expanding electricity access (SEforALL and CPI, 2018).

Both public and private sources of financing have an important role to play in bridging the financing gap. Public finance can close the funding gap through: i) di rect financing for public services, rural enterprises and households that are unable to access available solutions and are at 96

risk of being left-behind (Practical Action, 2018); and ii) financing instruments that de-risk investments and, thereby, attract private capital for enterprises and projects (e.g., high-risk innovation funds, funds for initial feasibility studies).

Smart Grids and Smart Meters Equally important as clean electricity generation is an efficient transmission and distribution system. Smart grids are energy networks that can automatically monitor energy flows and adjust to changes in energy supply and demand accordingly. Information on real -time consumption reaches consumers and suppliers through smart grids when couples with smart meters. With smart meters, consumers can adapt – in time and volume – their energy usage to different energy prices throughout the day, saving money on their energy bills by consuming more energy in lower price periods. Smart grids can help to better integrate renewable energy. While the sun does not shine all the time and the wind does not always blow, combining information on energy demand with weather forecasts can allow grid operators to better plan the integration of renewable energy into the grid and balance their networks. Smart grids also open up the possibility for consumers who produce their own energy to respond to prices and sell excess to the grid. The Central and Eastern European (CEE) region offers one of the most compelling smart grid investment opportunities among emerging markets. Supported by the EU smart grid regulations, the characteristics of the areas include relatively high rates of electricity consumption and high non-technical losses, making it a ripe market for smart grid investment. The largest markets of Poland and Turkey—are in the early stages of smart grid infrastructure investment that will total $28.6 billion over the period 2017-2027. More advanced segments of the smart grid market will

95 96

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develop as more countries deploy, especially distribution automation, wide area measurement, analytics and battery storage, all of which offer a wide set of opportunities to make profitable investments. Some of the players already in the field include large international smart grid vendors as well as several well-established local vendors. ABB, ADD Grup, Ericsson, GE, Honeywell, Itron, Kamstrup, Landis+Gyr, NES, Oracle, Sagemcom, Schneider Electric and Siemens are among the leading international vendors active in the region. Some of the most prominent local vendors include Apator, Elgama-Elektronika, Flashnet and Iskraemeco. The focus on emerging economies is also increasingly relevant. As these projects in developed economies wrap up, vendors will shift their focus to opportunities opening up in countries across emerging market regions. The graph shows the forecast of emerging markets by region.

Transport sector Electric mobility is expanding at a rapid pace. In 2018, the global electric car fleet exceeded 5.1 million, up 2 million from the previous year and almost doubling the number of new electric car sales. A crucial component of electric cars remains the quality of batteries, as they are expected to endure long distances. Lithium-ion batteries are already commercially used in the world but with some limitations that may not be overlooked. Meanwhile, alternatives are beginning to crop The Wilberforce Society Cambridge, UK

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up. The price of LI batteries fell 80% between 2010 and 2017 ($/kWh) with costs projected to fall another 52% between 2018 and 2030.Ultrafast charging is also a characteristic vital to helping electric cars go mainstream and there is a big scope of improvement in this area. As energy production moves towards renewable and intermittent sources, it will be crucial to 97

store large amounts of energy in an efficient way. In this scenario, the electric vehicle sector can act as the driving force for investment and innovation in batteries to reach mass production globally.

Source: Bloomberg NEF Just 10 countries are on course to represent almost three quarters of the global market in gigawatt terms, according to BNEF’s forecast. South Korea is the lead market in 2019, but will soon cede that position, with China and the U.S. far in front by 2040. The remaining significant markets include India, Germany, Latin America, Southeast Asia, France, Australia and the U.K. Industrial processes

Carbon Capture Utilisation and Storage Emissions from cement, iron and steel, and chemical production are among the most challenging to abate. One-third of industry energy demand is for high-temperature heat, for which there are few mature alternatives to the direct use of fossil fuels. Worldwide, coal is the predominant fuel burned in cement kilns. Cement production consumes approximately 120 kg of coal per tonne of cement and is responsible for emitting large amounts of NOx and CO2. For some industrial 97

Johan Rockström, Owen Gaffney, Joeri Rogelj, Malte Meinshausen, Nebojsa Nakicenovic, Hans Joachim Schellnhuber. 2017. A roadmap for rapid decarbonisation. Science. The Wilberforce Society Cambridge, UK

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and fuel transformation processes, CCUS is one of the most cost-effective solutions available for large-scale emissions reductions.

Agriculture Today, agricultural farming emits 25% to 35% of all CO2 into the atmosphere. Indigo Agriculture, a start-up based in Boston make use of natural microbiology to revolutionise the way in which farmers grow crops. They recently launched the Terraton Initiative, a first -of-akind program to tackle climate change globally by accelerating carbon sequestration from agricultural soils on a massive scale. The goal of the initiative is to capture around trillion metric tons (a tera-ton) of carbon dioxide globally from 3.6 billion acres of farmland through a marketplace which gives farmers the incentives to carry out regenerative farming practices. In order to catalyse the initiative and ensure a wider reach, Indigo is creating the Indigo Carbon marketplace. Growers who join the Indigo Carbon will be eligible to receive $15 per metric ton of sequestered carbon during the 2019 crop season. In partnership with the Ecosystem Services Market Consortium and other organizations in this field, such as the Soil Health Institute and The Rodale Institute, Indigo will make use of its software imagery analysis and digital agronomy capabilities to assess and verify soil carbon sequestration and on-farm emission levels.

Synthetic Meats Lab-grown meat is expected to be an important technological alternative in terms of managing climate change for the livestock industry. The main start-ups in this field are Mosa Meat, Memphis Meats, SuperMeat and Finless Foods. Not only cattle meat production, but also pork, poultry and seafood. The market is proving to be very promising, as significant funding is being collected. Memphis Meats attracted $17 million in funding from different sources including Bill Gates and Cargill in 2017. Tyson Foods is the world’s second largest processor and distributor of meat products, and the company has made significant investments in the cultured meat space. These investments committed are ground-breaking investments, and investors should not take Tyson’s scale lightly. Working with Tyson Foods, these start-up companies are gaining access to advance technologies and deep pockets, which should expedite the process of bringing cultured

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meat to supermarkets. The benefits go even beyond about the climate, as traditional meat production often involves vast amounts of natural resources and animal suffering. The production of meat in laboratories basically consists of taking a muscle sample from an animal, collecting stem cells from the tissue and then generating fibres that will bulk up to form muscle tissue. The associated costs remain a challenge, but prices have fallen from US$ 300,000 per burger in 2013 to US$ 600 in 2018.

Adaptation and resilience building technologies

Figure: Types of Adaptation to Climate Change Source: UNFCCC (2006) Technologies for adaptation to climate change One of the most devastating manifestations of climate change are the increasingly frequent disasters. Over the past decade, each year accounted for about 354 disasters, on an average which resulted in 68 000 deaths and left 210 million people affected. Economic losses from ‘natural’ disasters have now risen to $250 and $300 billion each year compared to $50 billion in the 1980s. Future expected losses are estimated at a range of $314 billion per year in the built environment alone. However, even when these numbers are alarming, there are signs that loss of life from major natural hazards are on the decline due to better disaster risk management techniques and technologies. Emerging technologies can help to abate damages for the most vulnerable populations through early warnings and predictions allowing adequate time for precautionary measures.

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Disaster Risk Reduction Technologies Investment in Disaster Risk Management (DRS) continues to be low and also represents only a tiny percentage in the international development assistance. The majority of DRM-related development financing continues to go into emergency response rather than prioritising investments to build resilience. Possibilities of future disaster also impacts the economic growth and decision-making process. High aversion to risk often restricts businesses operations and continue to discourage potential profitable investments that could improve welfare and development of the population. In contrast, action to manage disaster risk can encourage visionary planning, long-term capital investment and entrepreneurship. Investing in DRM actions can also lead to and generate specific social, economic and environmental benefits. These secondary and tertiary dividends are expected to deliver benefits even in the absence of a disaster occurring for many years. Therefore, these additional benefits also become a strong reason for increased investment in disaster risk reduction and management Over this, recent technological advancement and innovation have also created new opportunities for enhancing disaster risk reduction and strengthening resilience. Developments in disruptive technologies such as artificial intelligence (AI), Big data, the Internet of Things (IoT), and recent innovations in areas including robotics and drone technology are transforming disaster risk reduction and management.

In the island nation of Vanuatu, aerial drones were deployed following Cyclone Pam for disaster assessment. Drones were observed to be an effective tool for rapid and granular evaluation of the situation, particularly since cloud cover obscured satellite images. The image s captured by the drones proved to be highly effective in easy identification and mapping of the most affected and damaged terrains and allowed for emergency recovery assistance to reach there effectively. Crops were also surveyed for damage in order to determine how much food people would require from other sources. The imagery was input to an open source mapping platform for volunteers to upload and geo-tag images from social media to overlay on the map. Another example of effective use of technology was during the flooding of the Liboriana River in Colombia, which triggered a devastating landslide in May 2015, causing more than 80 deaths. Following the event, the Colombian Government’s National Unit for Disaster Risk Management The Wilberforce Society Cambridge, UK

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hired a company to implement an early warning system using IoT technology. As a result, five solar powered sensors were installed along the Liboriana river and two other rivers to monitor air temperature and water level using ultrasound. The use of solar energy ensured the sensors to continue functioning even in the event of an electricity outage. The system automatically send s a text message to village authorities in the event of a risk detection, and the data is also stored in the cloud for others to access. Even when traditional technologies such as seismometers and satellite imagery are still considered to be the most used methods for detecting, monitoring and accessing disasters, recent innovations in big data, robots and AI technologies need to be further researched and their large scale impact and effectiveness in disaster risk reduction and resilience building remains to be examined. Below is a summary of other adaptation technologies that may benefit from investment.

Figure: technologies for adaptation in coastal zones Source: UNFCCC (2006) Technologies for adaptation to climate change Global discussions on climate change finance and investments Important milestones that have sent a signal to the global investment community and private sector that mainstream investment practices are no longer appropriate for the challenges ahead were the Principles for Responsible Investment (PRI) launched in 2006 by its initial signatory members, and the Task Force on Climate-related Financial Disclosures (TCFD) launched in 2016 by the Financial Stability Board. Both initiatives clearly demonstrated that an integration

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between natural capital and economic capital was fundamental. They clearly shaped investment trends in leading towards a convergence of environmental aspects and financial outcomes. Initially, with 68 members representing less than US$10 trillion, including pension funds, banks and asset management institutions, PRI has now over 2250 members that represent almost US$90 trillion in assets under management, nearly 50% of the total global institutional assets base – a sharp and steady increase in a period of little over ten years, with no drop recorded in the number of investors or for the invested value (Principles for Responsible Investment, 2019). PRI works closely with United Nations Environment Programme Finance Initiative and United Nations Global compact, ensuring a close alignment with the United Nations Sustainable Development Goals, including climate change. While some private companies are already taking action, others have yet to make this shift. Private firms are hesitant to invest when climate-resilient investments present an added cost or a higher risk. In these cases, government action can help correct these market failures. The following case-study from Norway illustrates the role of public institutions in ushering private finance. Enova SF is a Norwegian government-owned and funded company (owned by the Ministry of Climate and Environment) that contributes to reduced greenhouse gas emissions, development of energy and climate technology and a strengthened security of supply. As it is costly and risky for individual businesses to start using the newest and most climate-friendly technologies, Enova offers a financial contribution to eligible companies so that projects can be implemented even if it is not profitable in the short-term, and even if it does not fulfill the company’s investment strategy. Each year, Enova invests between NOK 2-4 Billion (200-400 mill. EUR) into CCTO projects. Enova is a non-profitable company that supports green projects financially to achieve a return of interest that is satisfying for the company to go through with the investment. The goal for Enova is to support the project so the net present value of the project is zero. Enova has two main areas of financial support: technology development and market development. Enova therefore supports technologies and projects that are unprofitable but give a positive result in kWh, kW or CO . The financial support from Enova is not only to support the specific 2

project. It is to make more people use the technology, so it becomes mature and then the price goes down. As soon as the technology is profitable over the investment period, Enova stops the The Wilberforce Society Cambridge, UK

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financial support to that technology. Enova’s financial support pushes the market development to go faster than it would without financial support. The ultimate goal is to help push ideas to the market and to ensure innovations increase in both scope and speed to reach a low emission society.

Some examples of projects that Enova has supported include: •

a NOK1.55 billion investment into Norsk Hydro ASA’s plan to test an innovative smelting technology in a full-scale aluminium pilot plant at Karmøy, Norway.

•

NOK133.6 million into two companies - Kongsberg and YARA - that are developing the world's first driverless and full-electric container ship.

•

Support towards ‘Power-House Brattørkaia’, an energy-positive office building located in Trondheim, Norway.

•

A microgrid with power generation from solar and wind, battery storage and power management, facilities that can communicate with an overlying communication system and charging solutions for larger vessels such as bus and aircraft.

Several technological innovations have placed us in a better position than ever to control and tackle climate change. Further investment in these technologies not only make them more accessible to all those in need of them, but also bring these technologie s into the mainstream making it more and more profitable for businesses to adjust their portfolios which in turn makes greener businesses more attractive than the ‘business as usual’. However, governments and private investment must go hand in hand to ensure that the transition to a low emission ‘green economy’ remains a just one. Investments with social co-benefits are likely to yield a holistic and inclusive greening of our economies and this section is an attempt to highlight some of these opportunities.

TECHNOLOGICAL, ECONOMIC AND FINANCIAL ASPECTS OF SOLAR ENERGY AS A PATHWAY TO ENERGY SYSTEMS DECARBONISATION Of all the technological solutions for climate change, perhaps none has as much potential to make a global impact or has seen such rapid development in a short period of time, as solar energy technology. Based on the size of the global solar energy resource, and the low and The Wilberforce Society Cambridge, UK

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stilldeclining cost of key technologies, a large-scale transition of global energy use to solar power presents perhaps the most promising avenue to “deep decarbonization” of the energy sector. Here, we will provide an up-to-the-minute survey of the technological and economic status of this essential renewable energy technology.

This case-study will describe the main available technologies for solar energy collection, both in the form of electricity and heat. It will refer to the introduction to this section, which considered the contributions of different sectors to total GHG emissions. We seek to illustrate how solar energy can address the need for decarbonization across all sectors, not only electricity generation, and how investments can be directed to support the deployment of solar energy technology through the economy. A Survey of Solar Energy Technologies

To begin we will offer a survey of the solar energy technologies that are available on the mass market at commercially viable prices. Several different types of solar energy collectors or systems exist: photovoltaic panels which convert sunlight directly into electricity; solar thermal collectors which capture and use solar heat directly; and concentrated solar power systems which use solar heat to generate electricity. Each has its own set of applications and limitations, which will be discussed here.

Solar Energy for Electricity The first goal of much decarbonization activity today is to remove non-renewable carbon-based energy sources from the electric grid. The key challenges in using solar energy to meet this need have historically been the cost of hardware and the intermittency of the solar resource – in other words, the fact that solar panels do not produce electricity when the sun does not shine. However, the price of solar panels has come down dramatically in this decade, and costeffective solutions can increasingly be found to address the challenge of intermittency.

Photovoltaics When we talk about “solar panels” we are typically referring to photovoltaic panels (or modules), usually denoted as PV. A PV module is made from photovoltaic cells, which convert sunlight directly into electricity. Roughly 90% of commercial PV modules use silicon-based cells; ‘thinfilm’ technologies account for the remainder, with the vast majority of thin-film modules based The Wilberforce Society Cambridge, UK

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on cadmium telluride (CdTe). Commercial solar panels typically have efficiencies in the range of 15-20%; i.e. 15-20% of the solar energy that falls on the panel is ultimately extracted as electricity.

Figure 2 Price decrease of silicon PV cells and modules since 2013

Figure 3 The learning curve (price decrease vs. total number of products manufactured) for photovoltaic modules since the 1970s

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ITRPV. "International Technology Roadmap for Photovoltaic (ITRPV)-Results 2018." (2019). ITRPV. "International Technology Roadmap for Photovoltaic (ITRPV)-Results 2018." (2019).

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One of the stories of the decade in the energy sector is the incredibly fast decrease in solar panel prices, driven by the massive scaling-up of solar panel manufacturing, primarily by large companies in China. Thanks to the decrease in module prices, the cost of building a solar power plant is now aligned with the cost of conventional power plants.

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Since solar energy systems do

not consume fuel and therefore have low operating costs, this translates into solar energy prices that are competitive with even the cheapest fossil fuel electricity across much of the world. The ongoing economic changes have transformed the way that solar energy is used for electricity generation. Photovoltaic systems first gained popularity as a way to generate electricity at home, in rooftop solar energy systems that are now a familiar sight across the world. However, as the economics have changed, utility companies have increasingly commissioned large -scale solar power plants composed of large arrays of photovoltaic modules, ranging from the 10-megawatt to the gigawatt scale. These “utility scale” systems now represent most of the new solar capacity being installed and it is these systems that have achieved record-low prices for clean electricity. Later in this chapter, we will consider as a brief case study the factors that allowed PV pricing records to be set in the United Arab Emirates in 2016.

Figure 4 A utility-scale photovoltaic plant [Wikimedia commons https://commons.wikimedia.org/wiki/File:Juwi_PV_Field.jpg] Photovoltaic systems are an intermittent power source – their output varies based on the amount of sunlight available. Nearly all large-scale PV systems have no energy storage, since storing

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EIA. “Cost and Performance Characteristics of New Generating Technologies, Annual Energy Outlook 2019.” US Energy Information Administration, 2019. The Wilberforce Society Cambridge, UK

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electricity requires large battery banks which greatly increase the cost of the system. Electric grids with a large amount of PV (the state of California is one example) frequently see PV producing more energy than is required to meet demand band must curtail or “dump” the excess energy, since it cannot be stored. Later in this chapter we will consider ways to avoid the need for curtailment by shifting the demand for electricity onto the hours when the solar resource is strongest. This approach of modifying demand for electricity to match a fixed generation profile goes against the way that utility companies naturally think: the standard approach is to treat electricity demand as being fixed, and then generate electricity as needed to meet that demand. To do this, utilities need dispatchable energy – energy that can be generated when needed based on fluctuations in demand. This can be provided by a second category of solar generating technologies: concentrated solar power or CSP.

Concentrated Solar Power CSP systems use light-concentrating optics to focus sunlight onto an absorber transporting a working fluid, typically a thermal oil engineered to tolerate temperatures near 400°C. This solar heat is then used to generate steam, which drives a turbine as in a conventional thermal power plant. Concentrated solar power is decades older than photovoltaics but has only recently seen its cost reduce to the level where it is economically viable for large-scale electricity generation. Construction costs for CSP plants are still typically several times higher than for PV plants, but CSP has the advantage of being able to cheaply store large quantities of solar energy as heat in thermal storage tanks. The heat is then used to produce steam and drive the turbine later, allowing electricity to be produced on demand. This configuration is referred to as concentrated solar power + thermal energy storage (CSP+TES), and is now the dominant configuration of new CSP power plants.

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Figure 5 Concentrating solar power (CSP) plants using parabolic trough (left) and central tower receiver (right) configurations. [https://commons.wikimedia.org/wiki/File:Solar_Plant_kl.jpg; https://commons.wikimedia.org/wiki/File:Crescent_Dunes_Solar_December_2014.JPG] There are two main optical configurations for CSP plants: parabolic trough and tower or central receiver systems. Parabolic trough systems are the most mature; these circulate a heat transfer fluid through a field of parabolic reflectors and deliver this heat into a boiler or molten -salt storage tanks. Central receiver systems achieve temperatures higher than the tolerance of typical heat-transfer oils by using a field of mirrors (heliostats) to directly heat molten salt in central tower. The heated salt, typically about 550°C, is then fed into storage tanks and used as needed to generate electricity. These systems experience higher turbine efficiency due to this higher temperature, but also more optical losses as well as higher construction costs. CSP systems also have unique limitations on where they can be used. CSP plants require clear skies and direct sunlight in order to operate -- the output of a CSP system drops to zero on a cloudy day. This is in contrast to PV, which will continue to produce some electricity even under an overcast sky. Therefore, CSP can only be installed in sunny locations, mainly deserts, with minimal cloud cover or haze. However, in such settings, CSP+TES offers the perfect complement to PV. While PV provides low-cost electricity during the day, CSP can quickly adjust its output to respond to changes in demand and can store energy for many hours to continue producing electricity overnight. Our case study of the UAE will also examine another pioneering project, a combined PV+CSP plant that is currently under construction to provide 24-hour solar energy to Dubai.

Solar Energy for Heat

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An entirely different set of applications for solar energy involve utilizing heat directly rather than converting it to electricity. Commercial technologies exist to span a wide range of temperature requirements, from domestic hot water to high-temperature steam.

Flat plate collectors Flat plate collectors are the oldest commercial solar energy technology, and have long been used for domestic water heating. Flat plate collectors consist of a black front cover in contact with a set of heat pipes, which are separated from the back surface by an air gap. The heat pipes carry water through the panel where it is heated by the absorbed solar energy. Flat plate collectors are effective at collecting heat for low-temperature applications, but suffer significant losses when the atmospheric temperature is low.

Evacuated tube collectors Evacuated tube collectors use an absorber pipe enclosed in a vacuum tube. There is typically a cost premium associated with evacuated tube collectors relative to flat-plate, but evacuated tube collectors suffer less thermal loss due to the better insulation of the tube, and therefore can perform more efficiently at low temperatures. They are often used for hot water generation in cold climates. A variant on the evacuated tube collector is the compound parabolic concentrator or CPC. In this configuration, each tube is fitted with a curved reflector that slightly concentrates light onto the tube. These systems can still be mounted on a fixed surface and have been demonstrated to reach temperatures up to 200°C; however, they have not been widely adopted in the commercial market.

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Figure 6 Flat-plate (left) and evacuated tube (right) solar thermal collectors [https://commons.wikimedia.org/wiki/File:Solar_panels,_Santorini2.jpg; https://commons.wiki media.org/wiki/File:Solar_vacuum_tube_collectors_Thessaloniki.jpg] Parabolic Trough systems for solar steam Higher temperatures can be reached by using CSP technology to capture solar heat for direct use. Large-scale parabolic trough systems to generate steam for industrial processes are now beginning to gain popularity in areas where a strong solar resource ex ists in the same place as a suitable industry. In a particularly striking example, which we will detail in an application study, the Sultanate of Oman has begun operation of a 1GW parabolic trough system to provide steam for enhanced oil recovery. Attention is increasingly turning to the possibility of using solar heat for a variety of industrial processes that to this point have relied on combustion of fossil fuels. This section has surveyed the main technologies that are commercially available for the collection of solar energy. Combined, they would be capable of meeting the great majority of human energy needs across large parts of the world at reasonable cost. The key to realizing this potential is to identify the appropriate technical solutions for a wide range of applications and secure the necessary capital to implement these solutions. In the upcoming discussion, we will present several real-world examples of how solar technology is currently being deployed to meet the energy needs of nearly all sectors of the world economy. We intend for these examples to provide a body of background information – highlighting success stories, projects to watch, emerging applications and the companies that are on the front lines of developing these solutions – that can guide investors towards those projects that have the greatest potential to make an impact in the struggle to decarbonise the world’s energy systems.

APPLICATION STUDIES AND INVESTMENT OPPORTUNITIES This section offers examples of real-world applications of solar energy technologies to decarbonise activities in many sectors around the world. These include low-cost, 24-hour electricity in the United Arab Emirates; solar-powered oil extraction in Oman; thermal storage systems allowing solar powered air conditioning in California and heating in Scandinavia; innovations on the use of electric cars to balance solar-heavy electric grids in the United States; The Wilberforce Society Cambridge, UK

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and a movement towards integrating solar panels into buildings, greenhouses and agricultural land across the world. The aim is to give climate-conscious investors a framework for understanding the current state of technology and the ways that it can be used to displace GHG emissions across different sectors of the economy.

We begin with a case study of an unlikely solar energy pioneer: the oil-rich desert Sheikhdoms of the United Arab Emirates.

CASE STUDY: PIONEERING SOLAR PROJECTS IN THE UNITED ARAB EMIRATES The United Arab Emirates (UAE) became an unlikely leader in solar energy development in the middle of this decade, when they began breaking pricing records for large -scale solar energy projects. In 2016, both Dubai and Abu Dhabi announced gigawatt-scale photovoltaic plants that would produce electricity for less than 3 c/kWh, lower than all but the cheapest fossil fuel electricity. The claim initially attracted scepticism. However, since that time, many other countries including the US, have followed the UAE’s lead in bringing solar electricity prices to 3¢/kWh and below. Recent studies have demonstrated how the changing economics of solar energy have allowed large-scale photovoltaic projects to remain profitable for their investors even while selling electricity at low prices.

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The declining cost of solar hardware, coupled with increased experience in system design and construction, has fundamentally changed the way that solar project development must be approached. In the past, the high cost of hardware meant that projects could only be viable with heavy government subsidies. Therefore, the first areas of the world to build large amounts of solar generating capacity were those with government support for renewables. Some of these places, such as Spain and California, have a strong solar resource which leads to high output from solar generating systems; others, such as Germany and the north-eastern US, would not have developed their solar industries so quickly if not for state subsidies. Now, this situation has changed. Major surveys have shown that the capital costs for building solar power plants are now comparable to those for equivalent low-cost fossil fuel plants, and the main factor that will control how quickly solar energy capacity is built will be how much capital can be raised, mostly from the private sector, to finance the construction of new solar power plants.

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Apostoleris, H., Sgouridis, S., Stefancich, M., & Chiesa, M. (2018). Evaluating the factors that led to low-priced solar electricity projects in the Middle East. Nature Energy, 3(12), 1109. The Wilberforce Society Cambridge, UK

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In the case of Dubai and Abu Dhabi’s projects, various steps were taken to lower construction costs, and a change in the attitude of banks towards solar energy allowed the developers to obtain 102

large loans at low interest rates. Both of these aspects appear to be being replicated in other parts of the world. Solar parks in the southwestern US are being built next to decommissioned coal-fired plants and making use of the old plants’ electric transmission lines, which otherwise would represent a major cost for the developer. Meanwhile, the achievement of prices below 3 ¢/kWh and the proliferation of new solar projects suggests a strong financing environment, where investors and lenders have high confidence in PV to deliver returns. One aspect that has helped solar energy to be seen as a safe investment is the rise of power purchase agreements (PPAs) for utility-scale solar plants. A PPA is a contract signed between the company that builds the plant (typically a private firm that retains full or partial ownership) specifies a fixed price that the utility company will pay for electricity from the plant. In the UAE, PPAs for solar have typically been signed for 25 years or more. Thus, the project has a contractually guaranteed revenue stream for most of its expected lifetime. This provides investors and lenders with some assurance of the revenue-generating potential of the projects. These low-cost projects use only photovoltaics to produce electricity for immediate use – they do not include energy storage. The UAE is now moving to the next phase of solar development – combining PV with CSP+TES to provide 24-hour solar energy. Dubai’s most recent solar project – Phase 4 of the Mohammed bin Rashid Al Maktoum Solar Park -- was ordered in 2017, with construction currently underway. It will total 950MW and has the ambition of providing electricity 24 hours per day by combining PV and CSP technology. The project includes the following components: •

250MW PV providing energy during the day (no energy storage) at 2.4c/kWh;

•

600MW Parabolic trough collecting solar heat at 400°C to feed thermal energy storage tanks. The troughs will use a high-performance heat-transfer fluid, DOWTherm by DOW Chemical, which is engineered to withstand temperatures above 400°C;

•

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100MW Solar Tower heating molten salt to 560°C;

Bincliffe, Jordan. “Debt terms revealed as Masdar, EDF close on Dubai PV” IJGlobal 2017 June 14.

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•

15 hours thermal energy storage in molten salt storage tanks. This means that the tanks can store enough heat to operate the turbines at full capacity for 15 hours, allowing electricity to be produced throughout the night.

The power purchase agreement for the project specifies two different electricity prices: 2.4 c/kWh for the PV component, and 7.3c/kWh for the CSP component. This is related to the lower construction costs for PV systems relative to CSP. For this reason, the project is designed to use the PV component during the day, and the CSP component at night.

Overall, the three projects described here total nearly 3GW of solar energy capacity in a country that until this decade was almost entirely dependent on fossil fuels. The development process has been eased by the availability of large amounts of capital; however, it is worth reiterating that the contribution of government money has taken the form of an investment, not a subsidy, and an analysis of the projects shows that the contracted electricity prices are sustainable given the current cost structure for solar energy projects. Abu Dhabi’s 1.1GW PV park is now operational; Dubai’s 800MW PV project is nearing completion and their 950MW PV+CSP plant is under construction. These will be projects to watch in the coming years and will provide critical experience in the operation of large scale, 24-hour/day solar energy generation with low electricity prices. The success – technical and economic – of these projects would likely lead the way to a further acceleration in the construction of large solar power plants.

The preceding case described the rise of low-cost, round-the-clock solar energy, based on a combination of cheap photovoltaics and concentrating solar power with thermal energy storage, as a major contributor to the United Arab Emirates’ power grid. This represents the UAE’s approach to adding large amounts of renewable energy to its electric grid while avoiding the need to invest in and maintain large battery banks for electrical energy storage. But this is not the only possible way to address the intermittency of solar energy, nor is it the most appropriate in all parts of the world. Furthermore, it does little to address GHG emissions from other sectors. In the following section we will offer snapshots of other solar applications that address emissions from different sectors and provide other ways of matching the supply of solar energy to the demand. Each of these applications has been selected based on its potential to significantly reduce greenhouse gas emissions by enabling more activities to be converted to solar power; and for its potential to be scaled up in the near term, without major scientific breakthroughs. In other

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words, we have highlighted technologies that could make a difference in the near term, if sufficient capital can be marshalled to bring them to scale. APPLICATION SNAPSHOT 1: Solar steam in the energy sector

Process heat derived from fossil fuel combustion is a major contributor to GHG emissions in both the industrial and energy sectors. Deep decarbonization will require addressing these sources of emissions. The Miraah Solar Project in the Sultanate of Oman is a pioneering project that aims to reduce fossil fuel consumption by the petroleum industry, by replacing it with solar heat. In the oil fields of the Arabian Peninsula, enhanced oil recovery techniques are often used to increase the productivity of oil wells. One of the most common is to inject steam into the wells to expel heavy oil. Typically, this steam is generated by burning natural gas. The Miraah project was developed by Glasspoint Solar to replace gas combustion with solar heat. The project uses Glasspoint’s signature technology, parabolic troughs enclosed in greenhouse -like structure to protect the mirrors from desert sand. Solar heat is used to produce steam which is then injected into the oil wells. The first phase of the project is now operational and is reported to be meeting all targets, with 660 tons of steam produced per day. When completed, Miraah is expected to prevent 300,000 tons of CO2 emissions per year, the equivalent of removing 63,000 cars from the road.

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Figure 7 Glasspoint Solar’s Miraah solar steam facility at the Amal oilfield in Oman [https://www.glasspoint.com/miraah/] APPLICATION SNAPSHOT 2: THERMAL STORAGE FOR HEATING AND COOLING Our case study illustrated a way to produce solar energy on demand and over the entire day and night, solving the problem of intermittency. This approach allows solar energy supply to meet demand. There is another way to address the problem as well – by modifying demand to match the supply of solar energy. Solar energy systems without energy storage tend to produce too much energy in the middle of the day, and not enough energy in the evening. California is pioneering a solution to this problem in the simplest imaginable way – by making ice when energy is available and using this ice in air-conditioning systems when it is needed. The cooling systems are built by the company Ice Energy, which serves commercial, residential and industrial customers and has a large number of projects across the state. Using stored ice for cooling solves a major problem for grid operators in hot climates, who must provide enough electricity to cover the afternoon demand peak, when air conditioners are heavily used. Ice storage smooths this peak by running compressors to make ice earlier in the day, avoiding the need to provide large amount of electricity to meet cooling demand on hot afternoons. As demand for air conditioning skyrockets around the world, cooling systems based on ice storage will likely be the critical ingredient that makes widespread AC use compatible with renewable energy.

Figure 8 Ice Energy’s Ice Bear air conditioning system uses electricity as available to make ice (left), then uses this ice to provide cooling with minimal energy consumption [https://www.ice energy.com/] A way of implementing this type of solution on a large scale is through district heating and district cooling systems. District heating has a long history in Europe, where large networks of pipes The Wilberforce Society Cambridge, UK

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distribute heat from central boilers, waste incinerators, power plants and factories to provide heat to residential and commercial buildings. Building on the concept, the United Arab Emirates has developed an extensive network of district cooling systems, where centralised cooling plants chill water and distribute it for air-conditioning in buildings.

Solar energy can enter into such systems in a variety of ways. Heat can be directly captured using solar thermal collectors and fed into district heating systems. Excess solar electricity can also be diverted into boilers or compressors which then feed into the central heating or cooling system. Both the heating systems of northern Europe and the cooling systems of the UAE are beginning to add thermal storage capacity in anticipation of this trend, which can be expected to become more pronounced in the coming years as solar and wind take a larger share of electricity generation. APPLICATION SNAPSHOT 3: Electric cars supporting the electric grid Most automobile manufacturers now believe that electric vehicles are the future, with major automakers pushing to convert their fleets to electric power. This presents a major challenge for the world’s electric grids and an opportunity for decarbonization. Electric grids will soon need to provide the energy for transportation that previously had been provided by burning gasoline or diesel fuels. However, if this new electricity demands can be supplied by renewable energy, it would significantly decarbonise a sector that has been dominated by fossil fuels. Depending on how they are charged, electric vehicles may be a blessing or a curse for the electric grid. If no controls are put on when vehicles are charged (i.e., if electric vehicles are charged in the same way that we currently put gas in a car – stopping at a gas station and filling up whenever we need to), they would represent a huge, unpredictable load that utilities would need to supply electricity for. However, another model is possible. Electric cars could be left plugged into “smart” chargers for a long period of time – e.g. overnight or during the workday – and charge only when excess electricity is available on the grid. This matches well with photovoltaics, which tend to produce more electricity than is demanded during the midday hours. Electric vehicles could provide another way to use this excess energy, without investing in large battery banks to store it for later use on the grid. A study of this concept was conducted by Lawrence Berkeley

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National Laboratory and found that deploying a network of smart chargers to charge electric vehicles in this way could avoid the need for billions of dollars in standalone battery st orage.

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APPLICATION SNAPSHOT 4. Solar everywhere: Installing solar energy systems with limited land Much of the large-scale solar development has been done in deserts. However, most electricity demand is in urban and agricultural areas. To more effectively meet this demand and avoid the costs associated with long-distance power transmission, it is necessary to incorporate solar energy generation into these settings. Building-integrated photovoltaics seeks to incorporate solar cells into building materials in a way that is both aesthetically satisfying and allows significant energy generation. “Solar glass” is an especially popular concept in which solar cells are incorporated into windows in such a way that significant transmission of light is still possible. Onyx Solar is a leader in custom solar glass solutions for commercial customers. A Swiss start-up, Insolight, is pioneering a new solar glass concept that uses concentrating photovoltaic technology to achieve high electrical output as well as strong transmission of light through the glass. As mandates to reduce emissions and energy consumption in new buildings begin to go into effect, including one in the state of California that will take effect in 2020, the market for building integrated PV is likely to boom.

Figure 9 Building-integrated photovoltaic glass from Onyx solar (left) and a test of semitransparent concentrating PV modules by Insolight [https://www.onyxsolar.com/dewa-dubai, https://insolight.ch/technology/]

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Coignard, Jonathan, Samveg Saxena, Jeffery Greenblatt, and Dai Wang. "Clean vehicles as an enabler for a clean electricity grid." Environmental Research Letters 13, no. 5 (2018): 054031. The Wilberforce Society Cambridge, UK

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Another anticipated boom area in is agricultural photovoltaics, where solar installations coexist with cropland. This concept has gained strength as several studies have suggested that some corps in fact grow better under the partial shade of solar panels, and regulations are being updated around the world to enable farmers to install solar panels on their fields, as long as crop yields remain above an acceptable level. Solutions are also being explored to integrate photovoltaic cells into greenhouses.

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OPPORTUNITIES FOR INVESTMENT One of the messages that we have attempted to convey through this discusson is that solar energy has reached maturity as an industry and offers many economically viable solutions to the problem of decarbonization across different sectors. As such, there are many projects that could be implement in short order to directly reduce GHG emissions, many of which are associated with opportunities for private investment.

Utility-scale solar energy projects are typically built by private project developers, who finance construction with a combination of loans and private equity. Green investment funds are growing that target investors’ money towards renewable energy (mainly solar and wind) projects. Public investment in both renewable energy and in infrastructure projects that will enable the further penetration of renewables is also increasing. Projects such as district heating and cooling and smart electric vehicle charging networks, such as those described in the preceding snapshots, will require a further expansion of public investment. Many countries (including the Netherlands and Ireland) have begun to issue green bonds to raise funds for these projects. These offer another avenue for targeted investment in decarbonization efforts generally. Innovative start-ups have developed a number of the applications described here, including solutions for building-integrated and agricultural PV, and solar heat collection for industrial use. A third, higher-risk investment approach is to invest directly in such companies that are developing new solutions to satisfy unmet needs of the market. The aim of this chapter has been to provide a technology background that will allow the investor to begin the process of identifying promising investments.

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“India prepares to embrace Agrivoltaics,” PV Magazine India 2019/09/27.

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A final point that must be made is that the importance and applicability of solar energy is likely to expand, not shrink, as global energy markets expand. Much of the operational experience of solar energy systems until recently was in the global north. In these areas, challenges such as cloud cover and large seasonal changes in the solar resource are commonplace. These issues are less pronounced in large parts of the global south, where the solar resource is typicall y stronger and more uniform over the year. Incidentally, it is in the global south that one of the greatest challenges lies: as economies and living standards in this part of the world rise, is it necessary that they should follow the same environmentally destructive path that was taken by the industrialised world? Or have changes in technology made it possible to meet both the needs of economic growth and decarbonization in the developing world? This question will be explored in the discussions that follow. CLIMATE CHANGE ADAPATION & MITIGATION TECHNOLOGIES IN SUBSAHARAN AFRICA (SSA) It is a cruel irony that the areas least responsible for the emission of greenhouse gases that lead to global warming, are anticipated to suffer the adversities brought about by an altered climate 105

system most acutely. Sub-Saharan Africa (SSA) is an archetypal example of such a region where total carbon dioxide emissions released in 2014 amounted to 16% of those released by the 106

United States. However, in SSA the synchronised presence of multiple climate change risk factors, both socioeconomic and geographical, produces a discord of impacts that resonates more than the sum of any individual adversity. This is exemplified by the influence of drought events on sectors such as health care, agriculture and sanitation. Here, the effects of drought traverse the temporal divide from primary impacts - such as direct loss of life through heat stress, to secondary repercussions - ranging from decreased food availability to higher incidences of diseases. The increased strain induced by such extreme events has historically forced SSA to channel resources into sectors such as health care on an ad hoc basis.

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This approach diverts

capital away from future planning and development, which is of critical importance as the 105

A Decade in, Why the Pay-As-You-Go Solar Sector is Maturing and Brightening [Internet]. NextBillion. 2019 [cited 2019 Aug 1]. Available from: https://nextbillion.net/pay-as-you-go-solar-maturing/ Cogan D, Good M, McAteer E. Addressing climate risk. Financial institutions in emerging markets. A best practices report Cologne/Boston, MA/New York, NY: Ceres/DEG/RiskMetrics. 2009 A Decade in, Why the Pay-As-You-Go Solar Sector is Maturing and Brightening [Internet]. NextBillion. 2019 [cited 2019 Aug 1]. Available from: https://nextbillion.net/pay-as-you-go-solar-maturing/; Africa’s First Sustainable Biofuel Plant Opens in Mozambique [Internet]. [cited 2019 Aug 1]. Available from: https://www.triplepundit.com/story/2012/africas-first-sustainable-biofuel-plant-opens-mozambique/65541 106

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population of SSA is anticipated to reach two billion by 2050.

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Consequently, mitigating and

ameliorating the impacts of climate change now is of significance for both the sustainable development and environmental protection of SSA in the future. This overview focuses on anticipated changes in precipitation, heat extremes, aridity and sea level rise and how these climatic shifts are spatially organised across SSA. Impacts are discussed in relation to their repercussions for sectors such as agriculture and healthcare, as it is within these that the effects of natural hazards are mediated by social vulnerabilities. The perspective adopted here - which considers exposure to environmental threats in conjunction with vulnerability, is intended to broaden the range of possible mitigation and adaptation technologies considered later. Technologies will be discussed that both mitigate the direct effects of climate change and decrease vulnerability.

Changing Precipitation, Heat Extremes, Aridity and Sea Level Rise Global warming is anticipated to exert its influence at the extremes of current climate regimes, 109

strengthening both seasonal and regional contrasts. In SSA this is exemplified by the predicted polarised patterns of precipitation between regions in the eastern horn of Africa, which are expected to get wetter, and regions in the south and west which are expected to get dryer. Across all areas very wet days (defined as the top 5% currently experienced) show the strongest increases 110

in incidence. These patterns of intense rainfall increase the likelihood of large-scale flooding events.

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Changes in evapotranspiration are also anticipated to display spatial disparity. Decreases in evapotranspiration are anticipated to be worse in the south and west than the east, in alignment 112

with changing patterns of precipitation. The strongest deterioration into aridity brought about

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by the combined influence of decreased rainfall and increased evapotranspiration is predicted in southern Africa.

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In alignment with increases at the extremes of current climate regimes the occurrences of previously considered heat extremes (defined as temperatures three and five standard deviations 114

above the historical norm) are expected to increase. For example, under RCP.8.5, all African regions are anticipated to move into a new climate regime.

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Due to its tropical location SSA is expected to suffer a 10% higher increase i n sea level rise than the global average under conditions of global warming. The magnitude of sea level rise differs between RCP 2.6 and RCP 8.5, with a median anticipated change of 0.65m under RCP 8.5, and a change of 0.4m expected under RCP2.6.

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Changing Agriculture, Water, Health and Population Dynamics

Agriculture Within SSA 65% of the labour force is employed in the agriculture sector. Despite the increasing 117

commercialisation of this sector, 96% of crop production remains rain-fed. This has created a problem where farmers are increasingly exposed to competition from global markets yet remain dependent upon the prevailing climatic conditions to return reasonable crop yields. The situation is untenable under conditions of global warming as both the crops grown, and the rain-fed nature of the agricultural system render farmers highly vulnerable to changes in temperature and precipitation, placing farmers’ livelihoods as well as domestic food security at 118

risk. The IPCC has reported ‘high confidence’ in the anticipated negative impacts of climate

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Jr KD. Africa’s Renewable Energy Potential [Internet]. Africa.com. 2013 [cited 2019 Aug 1]. Available from: https://www.africa.com/africas-renewable-energy-potential/ Africa’s First Sustainable Biofuel Plant Opens in Mozambique [Internet]. [cited 2019 Aug 1]. Available from: https://www.triplepundit.com/story/2012/africas-first-sustainable-biofuel-plant-opens-mozambique/65541 Mentis D, Hermann S, Howells M, Welsch M, Siyal SH. Assessing the technical wind energy potential in Africa a GIS-based approach. Renewable Energy. 2015;83:110–125. Jr KD. Africa’s Renewable Energy Potential [Internet]. Africa.com. 2013 [cited 2019 Aug 1]. Available from: https://www.africa.com/africas-renewable-energy-potential/ Jr KD. Africa’s Renewable Energy Potential [Internet]. Africa.com. 2013 [cited 2019 Aug 1]. Available from: https://www.africa.com/africas-renewable-energy-potential/ Jr KD. Africa’s Renewable Energy Potential [Internet]. Africa.com. 2013 [cited 2019 Aug 1]. Available from: https://www.africa.com/africas-renewable-energy-potential/ 114

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change on agriculture in SSA, warming of 2°C by 2100.

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with losses of up to 27-32% for key crop species assuming

These negative consequences may be further exacerbated by the

growing atmospheric concentrations of carbon dioxide (C0 ), which creates a fertilisation effect 2

capable of increasing the rate of photosynthesis heterogeneously between plant species. Popular crop species such as maize, millet and sorghum will benefit to a lesser extent from the C0

fertilisation effect when compared with woody shrub species, leading to the encroachment of woody species into savannah grasslands and further decreasing the land available for crops and 121

livestock. The C02 fertilisation effect is important when considering the uses of alternative woody species for biofuel production. The repercussions of the anticipated decline in agricultural productivity are inequitable. Of the 65% of the population employed in agriculture it will be the most vulnerable - who lack the access to capital to construct irrigation systems or invest in more resilient crop species – who suffer the greatest losses.

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This will increase the social stratification of SSA society, as it is the most

vulnerable who similarly lack the means to diversify into other sectors of the economy and therefore fall further into poverty.

Water In rural SSA, ground water is the sole source of safe drinking water. However, this resource is predicted to decrease by up to 70% in southern Africa and parts of western Africa in accordance 123

with patterns of increased aridity. This geography of water scarcity is positioned within the broader framework of increased demand from population growth, and the use of water in large scale hydropower and irrigation systems.

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Here political and socioeconomic vulnerabilities

intersect with spatial determinants to dictate how much water is available and to whom. This has

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Biofuels Mandates Around the World: 2016 : Biofuels Digest [Internet]. [cited 2019 Aug 1]. Available from: http://www.biofuelsdigest.com/bdigest/2016/01/03/biofuels-mandates-around-the-world-2016/ Serdeczny O, Adams S, Baarsch F, Coumou D, Robinson A, Hare W, et al. Climate change impacts in Sub Saharan Africa: from physical changes to their social repercussions. Reg Environ Change. 2017 Aug 1;17(6):1585– 600. Fields S. Continental divide: why Africa’s climate change burden is greater. National Institute of Environmental Health Sciences; 2005. A Decade in, Why the Pay-As-You-Go Solar Sector is Maturing and Brightening [Internet]. NextBillion. 2019 [cited 2019 Aug 1]. Available from: https://nextbillion.net/pay-as-you-go-solar-maturing/; Jr KD. Africa’s Renewable Energy Potential [Internet]. Africa.com. 2013 [cited 2019 Aug 1]. Available from: https://www.africa.com/africasrenewable-energy-potential/ Hussain A, Arif SM, Aslam M. Emerging renewable and sustainable energy technologies: State of the art. Renewable and Sustainable Energy Reviews. 2017;71:12–28. Jr KD. Africa’s Renewable Energy Potential [Internet]. Africa.com. 2013 [cited 2019 Aug 1]. Available from: https://www.africa.com/africas-renewable-energy-potential/ 120

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implications for the use of hydropower as an energy source in western and southern Africa, due to its capacity to draw critical resources away from populations in need.

Health Climate change induced fatalities are anticipated from direct effects such as flooding, landslides and heat-stress, and secondary effects such as the decreased availability of water and food and 125

the increased incidence of diseases. In SSA, undernutrition is already high and the percentage of the population that is undernourished is anticipated to increase by 25-90% assuming warming 126

of 1.2-1.7°C by mid-century. Poor diet negatively impacts cognitive development in children 127

and leads to poor health and increased susceptibility to disease in adulthood. In concert the risk from diseases such as Malaria and Rift Valley fever are predicted to increase.

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Ocean systems and Population Dynamics Along the west coast of Africa fish accounts for up to 80% of the animal protein consumed, leaving this area particularly exposed to predicted decreases in maximum catch potential under climate change. For RCP 2.6, declines in catch potential of up to -50% for Liberia and Sierra Leone are anticipated, as fish migrate to higher latitudes due to warming waters.

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This decreases both the protein sources available to, and the income generating potential of, populations in these countries. Coastal areas are additionally vulnerable to threats from sea level rise such as coastal flooding, salinity intrusion and loss of dry land, which have the potential to displace vast numbers of people. In Nigeria under RCP 8.5, three million peopl e are predicted 130

to be flooded annually. On the east coast, sea level rise increases the severity of tropical cyclone

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Jr KD. Africa’s Renewable Energy Potential [Internet]. Africa.com. 2013 [cited 2019 Aug 1]. Available from: https://www.africa.com/africas-renewable-energy-potential/ Estimating the Renewable Energy Potential in Africa: A GIS-based approach. :73. Financing Renewable Energy in Developing Countries: Drivers and Barriers for Private Finance in sub -Saharan Africa – United Nations Environment – Finance Initiative [Internet]. [cited 2019 Aug 1]. Available from: https://www.unepfi.org/publications/regions-publications/africa-middle-east-publications/financing-renewableenergy-in-developing-countries-drivers-and-barriers-for-private-finance-in-sub-saharan-africa/ Leijon J, Boström C. Freshwater production from the motion of ocean waves –A review. Desalination. 2018;435:161–171. Get ready for tens of millions of climate refugees - MIT Technology Review [Internet]. [cited 2019 Aug 1]. Available from: https://www.technologyreview.com/s/613342/get-ready-for-tens-of-millions-of-climate-refugees/ April 05, Platt 2018 Author: Gordon. Global Finance Magazine - 44 African Nations Sign On To Single African Market [Internet]. Global Finance Magazine. [cited 2019 Aug 1]. Available from: https://www.gfmag.com/magazine/april-2018/44-african-nations-sign-single-african-market 126 127

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activity, with Mozambique and Madagascar being vulnerable to storm events. Coastal flooding has repercussions for international trade systems if port infrastructures are compromised, this is anticipated in Dar es Salaam - a port in Tanzania which handles approximately 95 % of Tanzania’s international trade.

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Such ports also serve landlocked interior countries, and

consequently their loss is magnified through dependant countries and their economies.

Population Movement and conflict Population movement in response to climate change is highly personal and depends not solely on the environmental context but a myriad of other social, economic and political considerations. The most common migration pattern in SSA is within countries, from rural areas affected by drought and desertification, to urban environments.

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This migration pattern has associated

health risks from the contamination of water supplies, to heat-island effects in overpopulated 134

urban centres. It also instigates and aggravates conflict between ethnic groups as competition for limited land increases, and poverty and unemployment rise amongst migrants.

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larger scale conflict propagating from changing climate conditions has been found by independent researchers

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who have posited a relationship between

precipitation and temperature deviations, increased competition for resources and the enhanced risk of conflict. The impacts of climate change are spatially explicit and context specific within SSA. In the east the risk from flooding is anticipated to increase and this will be accompanied by heightened threats from diseases such as malaria and cholera. In the west the rise in sea temperature will 131

Wanzala J. Google invests in Lake Turkana, power project [Internet]. The Standard. [cited 2019 Aug 1]. Available from: https://www.standardmedia.co.ke/business/article/2000180339/google-invests-in-lake-turkana-power-project How do cow herders spot water in the Sahara? With satellites, of course. - MIT Technology Review [Internet]. [cited 2019 Aug 1]. Available from: https://www.technologyreview.com/s/613335/how-do-cow-herders-spot-waterin-the-sahara-with-satellites-of-course/ Jr KD. Africa’s Renewable Energy Potential [Internet]. Africa.com. 2013 [cited 2019 Aug 1]. Available from: https://www.africa.com/africas-renewable-energy-potential/ IEA Renewable Energy [Internet]. [cited 2019 Aug 1]. Available from: https://www.iea.org/policiesandmeasures/renewableenergy/; Mercure J-F, Pollitt H, Viñuales JE, Edwards NR, Holden PB, Chewpreecha U, et al. Macroeconomic impact of stranded fossil fuel assets. Nature Climate Change. 2018;8(7):588. New study identifies Nigeria as leading seed hub in Western and Central Africa; Nigeria’s Value Seeds tops ranking | African Media Agency [Internet]. [cited 2019 Aug 1]. Available from: http://amediaagency.com/new-studyidentifies-nigeria-as-leading-seed-hub-in-western-and-central-africa-nigerias-value-seeds-tops-ranking/ SAROS Buoy Harvests Wave Energy to Desalinate Sea Water [Internet]. Digital Trends. 2016 [cited 2019 Aug 1]. Available from: https://www.digitaltrends.com/cool-tech/saros-buoy/; Kalogirou SA. Seawater desalination using renewable energy sources. Progress in energy and combustion science. 2005;31(3):242–281. Brunet C, Savadogo O, Baptiste P, Bouchard MA. Shedding some light on photovoltaic solar energy in Africa – A literature review. Renewable and Sustainable Energy Reviews. 2018;96:325–342. 132

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reduce ocean productivity, and drought events will limit agricultural output, handicapping both these industries and threatening food security. The south is anticipated to suffer the greatest decreases in precipitation and concomitant increases in drought events, leading to food shortages 138

and associated health risks. Cape Town in South Africa is currently anticipating the day when it runs out of water (termed ‘day zero’) at some point in the near future.

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The suffering of individuals within countries will be determined by synchronous socioeconomic and political vulnerabilities. Socially marginalised and economically impoverished members of society face greater exposure to both the primary and secondary threats from extreme weather events. Individuals who are socially marginalised frequently also face political disregard, and are consequently not prioritised for protective infrastructure investments, climate change education, 140

or relief following a disaster. In these instances, it is often international organisations and private companies who can strengthen the resilience of these communities.

Where to invest and in what – adaptation and/or mitigation The historically low emission burdens of countries in SSA, in concert with their amplified vulnerability to the anticipated effects of global warming, advocates for a primary focus on adaptation and a secondary focus on mitigation. Adaptation is often a more amenable strategy in the context of SSA as it can be operationalised by augmenting existing technologies that span 141

diverse sectors of society and the economy, and often utilise local knowledge. In contrast, mitigation has been focused predominantly on the energy sector and the use of nascent, foreign renewable energy technologies (RETs) which need to be adapted to conditions in SSA. The larger sphere of influence of adaptation approaches positively mirrors the ubiquitous nature of climate change impacts, which are not confined to the energy sector but affect agriculture, water, health, and infrastructure. The breadth of focus for adaptation solutio ns enables less capital intensive, small-scale interventions tailored to local needs to blossom across multiple sectors.

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Jr KD. Africa’s Renewable Energy Potential [Internet]. Africa.com. 2013 [cited 2019 Aug 1]. Available from: https://www.africa.com/africas-renewable-energy-potential/ Green D. Solar Energy facts – Concentrated Solar Power (CSP) Vs Photovoltaic panels (PV) [Internet]. [cited 2019 Aug 1]. Available from: http://www.renewablegreenenergypower.com/solar-energy-facts-concentrated-solarpower-csp-vs-photovoltaic-pv-panels/, http://www.renewablegreenenergypower.com/solar-energy-factsconcentrated-solar-power-csp-vs-photovoltaic-pv-panels/ Africa’s First Sustainable Biofuel Plant Opens in Mozambique [Internet]. [cited 2019 Aug 1]. Available from: https://www.triplepundit.com/story/2012/africas-first-sustainable-biofuel-plant-opens-mozambique/65541 Amankwah-Amoah J. Solar energy in sub-Saharan Africa: The challenges and opportunities of technological leapfrogging. Thunderbird International Business Review. 2015;57(1):15–31. 139

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However, mitigation remains a necessary objective particularly considering the embryonic nature of many countries’ energy sectors, which make them suitable for technological leapfrogging. Technological leapfrogging occurs when countries avoid investing in resource intensive and expensive incumbent technologies, and instead jump ahead to become leaders in a new technology. There is a precedent for this already in SSA with the case of mobile phones, which 142

rose to prominence in the absence of landline technologies. In the case of RETs this would not only bring about economic advantages and opportunities, but concurrently avoid the release of devastating quantities of greenhouse gases (GHGs) if Africa were to industrialise following the western model of development. Often the RETs in question have adaptative capabilities, such as the desalinisation of water by some ocean energy technologies, which would aid coastal 143

communities at risk from ground water infiltration by rising sea levels. These hybrid mitigationadaptation technologies are to be expected given the enabling nature of energy and electricity. What is the regulatory environment for adaptation and mitigation technologies? The ability of mitigation and adaptation technologies to provide both private and public goods have historically inhibited private investment in these technologies, and thus passed the economic opportunities to the public sector. However, the prosperity of companies such as M-Kopa (which 144

provides solar home systems to rural communities), Ignitia (which delivers accurate weather 145

forecasts to farmers)

and the commissioning of the first privately owned geothermal plant in

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Ethiopia, have demonstrated the profitability of private investment in projects at di verse scales, for both mitigation and adaptation technologies. To enable investment, systems may need to be imposed to direct some of the value of the public good provided back to the investor to make these technologies competitive with polluting incumbents. Variations of these techniques exist today, such as generous feed-in-tariffs (FITs) for RETs which provide clean electricity directly to the grid, or quantity-based instruments such as 147

renewable energy quotas. Approaches such as these are operational in multiple countries across 142

Kabir E, Kumar P, Kumar S, Adelodun AA, Kim K-H. Solar energy: Potential and future prospects. Renewable and Sustainable Energy Reviews. 2018;82:894–900. STAMP+: Building on success [Internet]. [cited 2019 Aug 1]. Available from: http://www.snv.org/project/stampbuilding-success Change UNFC on C. Technologies for adaptation to climate change. Bonn. Retrieved July 17, 2013, from; 2006. Olhoff A, Bee S, Puig D. The Adaptation Finance Gap Update-with insights from the INDCs. 2015 Li Z, Siddiqi A, Anadon LD, Narayanamurti V. Towards sustainability in water-energy nexus: Ocean energy for seawater desalination. Renewable and Sustainable Energy Reviews. 2018;82:3833–3847. Schellnhuber HJ, Hare B, Serdeczny O, Schaeffer M, Adams S, Baarsch F, et al. Turn down the heat: clima te extremes, regional impacts, and the case for resilience. Turn down the heat: climate extremes, regional impacts, and 143

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SSA. However, to be considered legitimate they must also be congruent with existing policies and situated within a perceived secure political and regulatory environment. Issues concerning policy disharmony are significant. For example, a paper by Szabo et. al. has found that the prices of diesel and gasoline fuels are critical determinants for the cost competitiveness of RETs across SSA countries. These prices are directly impacted by government subsidies for fossil fuels, which are asynchronous with incentives for investment in RETs and rightfully create circumspection amongst investors regarding a governments position on clean energy.

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Additionally, issues relating to regulatory ineptitude and instances of

inappropriate political interference in the energy sector diminish the validity of encouraging 149

policies. Consequently, political and regulatory factors will be considered alongside a country’s policy framework when considering the areas most promising for investment in this report. Many of the discussed incentives address mitigation rather than adaptation technologies and focus on the provision of clean energy. This is consistent with the narrow focus of mitigation on energy provision, which enables the development of targeted strategies within this domain. The absences of intentioned policies in the realm of adaptation reflects its diverse applications, and normative beliefs regarding the level at which adaptative solutions should occur. Viewed at the macro-level adaptation is seen as a problem for the public sector, as it protects universal rights more basic than the provision of energy, such as food, water and health. However, at the micro level adaptation is seen as a highly contextualised, individual responsibility. Despite these opinions, governments across SSA are failing to invest in adaptation, and individuals are frequently unaware of or unable to prepare for the risks of climate change. This void in public investment has created opportunities for private investment in risk -management technologies. These products enable individuals and governments to better adapt to the anticipated impacts of climate change and decrease their vulnerability. They include weather-forecasting services,

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the case for resilience. 2013; UNDP Climate Change Adaptation: Impacts [Internet]. [cited 2019 Aug 1]. Available from: https://www.adaptation-undp.org/privatesector/. Bank TW. Weather index-based crop insurance in Malawi : facilitating farmers’ access to agricultural credit [Internet]. The World Bank; 2012 Mar [cited 2019 Aug 1] p. 1–2. Report No.: 97471. Available from: http://documents.worldbank.org/curated/en/734611467986308477/Weather-index-based-crop-insurance-inMalawi-facilitating-farmers-access-to-agricultural-credit Kumar Y, Ringenberg J, Depuru SS, Devabhaktuni VK, Lee JW, Nikolaidis E, et al. Wind energy: Trends and enabling technologies. Renewable and Sustainable Energy Reviews. 2016;53:209–224. Olhoff A, Bee S, Puig D. The Adaptation Finance Gap Update-with insights from the INDCs. 2015. 148

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drought resistant seed varieties

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and novel insurance products.

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In this report, a country’s

general political and regulatory environment will be assessed in the absence of a specific adaptation policy framework. It should be noted that, as in the case of adaptation, specific policies to enhance the competitiveness of mitigation technologies are not ubiquitously required and their necessity can change as a function of time, as technologies approach economic maturity. This is demonstrated in the contrasting cases of solar energy in Kenya and Ghana. In Kenya the current focus of private investment is on the provision of small home and commercial systems, and there exists a thriving unsubsidised business environment in which individuals elect to purchase these systems independently of government incentives. In contrast, Ghana currently relies on strong political support in the form of premium long-term FIT agreements. The success of these in attracting foreign investment is evidenced in the large-scale, grid-connected Nzema Project, built by the 153

UK-based Blue Energy Group. These case studies suggest that the policy ecosystem within a country needs to be considered in the context of the hypothesised project, and the country’s current economic climate. Strong policies are not always necessary if private demand has become sufficient for a product to be competitive in a more liberal economy. Existing Policies and strategies that make investment attractive In 2012, the United Nations Environmental Programme (UNEP) conducted a survey of 38 financial institutions to understand the variables that influenced their investment decisions 154

regarding RET projects in SSA. The results of this survey recommended 3 steps that should be undertaken by countries in SSA to incentivise investment: 1. Create a level playing field between RETs and incumbent technologies 2. Provide easy market and grid access 151

“New study identifies Nigeria as leading seed hub in Western and Central Africa; Nigeria’s Value Seeds tops ranking | African Media Agency.” [Online]. Available: http://amediaagency.com/new-study-identifies-nigeria-asleading-seed-hub-in-western-and-central-africa-nigerias-value-seeds-tops-ranking/. [Accessed: 01-Aug-2019]. T. W. Bank, “Weather index-based crop insurance in Malawi : facilitating farmers’ access to agricultural credit,” The World Bank, 97471, Mar. 2012. J. Amankwah-Amoah, “Solar energy in sub-Saharan Africa: The challenges and opportunities of technological leapfrogging,” Thunderbird Int. Bus. Rev., vol. 57, no. 1, pp. 15–31, 2015. “Financing Renewable Energy in Developing Countries: Drivers and Barriers for Private Finance in sub-Saharan Africa – United Nations Environment – Finance Initiative.” [Online]. Available: https://www.unepfi.org/publications/regions-publications/africa-middle-east-publications/financing-renewableenergy-in-developing-countries-drivers-and-barriers-for-private-finance-in-sub-saharan-africa/. [Accessed: 01-Aug2019]. 152

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3. Mitigate political and regulatory investment risk These steps pave the way for the following section of this report; which will look explicitly at certain policies and their ability to increase the relative competitiveness of RETs within countries across SSA. It will then examine the broader impacts of the political and regulatory environment within these countries considering both mitigation and adaptation technologies, to determine apt locations for investment. Level Playing Field Within the UNEP report the most powerful policies for creating a level playing field between RETs and incumbent technologies were considered to be national renewable energy targets, FITs 155

and tax incentives. The following table has been created using data from the International Renewable Energy Agency (IRENA)

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and the World Bank ‘Lighting Africa’ project.

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It also

highlights countries within SSA which have in place the most important policies to promote investment in RETs as identified by UNEP and makes these identifiable using the IRENA database. It also highlights areas that have previously supported competitive auctions for tenders, as there is growing evidence of the benefits these policy instruments bring to both investors and governments.

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This table should be viewed as an introduction to the policy landscape across SSA, with more specific enquiry necessary to comprehensively evaluate an individual country’s optimality for investment. For example, it is necessary but not sufficient to consider the binary criteria of whether a policy exists in a country - its characteristics are equally paramount. The initial success of the regulatory environment in Kenya which enabled the burgeoning inde pendent market for solar energy, may be attributed to its appropriate FIT system. In Kenya the tariffs were denominated in the US$ - a stable foreign currency, and in 2012 guidelines were put in place to 158

aid the connection of small-scale renewables. These policy attributes de-risked investments and buttressed the development of the small-scale solar market which is so successful today.

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However, many countries, including Tanzania, do not denominate their tariffs in a foreign currency and have few mechanisms for the connection of smaller systems.

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Thus, the nuances

of individual policies should be examined in detail when considering where to invest. Market and Grid Access In many developing countries, the energy sector is dominated by outmoded state-owned utility companies, which have a legally endowed monopoly secured in place by vertically and horizontally integrated supply chains. These utilities are subject to political interference, which 161

has historically forced energy prices lower at the cost of financial stability. Many countries have failed to disaggregate these monopolistic structures, as they enhance the state’s role and power as the sole provider of energy. However, countries with such energy sectors suffer from financial losses due to their inefficient and artificial pricing. Consequently, some countries are beginning 162

to unbundle current supply and distribution chains to better facilitate private investment. The following table was created using data from Climatescope2019 from Bloomberg new energy 163

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finance, and from the IRENA policy database, and details the core indicators for electricity sector reform in developing countries.

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“Policies.” [Online]. Available: https://www.irena.org/policy. [Accessed: 29-Feb-2020]. “M-KOPA-IMPACT-REPORT-2019.pdf.” “Policies.” [Online]. Available: https://www.irena.org/policy. [Accessed: 29-Feb-2020]. T. Jamasb, D. Newbery, and M. Pollitt, “Core indicators for determinants and performance of electricity sector reform in developing countries,” Int. J. Regul. Gov., vol. 6, no. 1, pp. 43–78, 2006. “Financing Renewable Energy in Developing Countries: Drivers and Barriers for Private Finance in sub-Saharan Africa – United Nations Environment – Finance Initiative.” [Online]. Available: https://www.unepfi.org/publications/regions-publications/africa-middle-east-publications/financing-renewableenergy-in-developing-countries-drivers-and-barriers-for-private-finance-in-sub-saharan-africa/. [Accessed: 01-Aug2019]. “Climatescope 2019.” [Online]. Available: http://global-climatescope.org/. [Accessed: 24-Feb-2020]. “Policies.” [Online]. Available: https://www.irena.org/policy. [Accessed: 29-Feb-2020]. 159 160 161

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Mitigate political and regulatory risk Political and regulatory risk factors present within SSA are problematic for the deployment of both mitigation and adaptation technologies. Currently the return expectations are higher for investors acting in this region due to threats from macroeconomic instability, regulatory inefficiency, and political corruption within countries. These threats take many specific forms. For example, insecure property rights are known to be problematic for projects within SSA as 165

the legal status of land is often ill-defined, and currency exposure due to inflation and nontransferability linked to macroeconomic instability are also known to perturb investment.

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However, on 29 April 2019 the African Continental Free Trade Agreement was ratified by the 167

requisite 22 signatories from African Union states and thus came into effect. This agreement marks a significant progression towards a long-term goal of the African Union to accelerate

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C. Toulmin, “Securing land and property rights in sub-Saharan Africa: the role of local institutions,” Land Use

Policy, vol. 26, no. 1, pp. 10–19, 2009. 166

“Climatescope 2019.” [Online]. Available: http://global-climatescope.org/. [Accessed: 24-Feb-2020]. April 05 and 2018 Author: Gordon Platt, “Global Finance Magazine - 44 African Nations Sign On To Single African Market,” Global Finance Magazine. [Online]. Available: https://www.gfmag.com/magazine/april-2018/44african-nations-sign-single-african-market. [Accessed: 01-Aug-2019]. 167

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economic integration of the continent, thus enhancing the macroeconomic stability of individual states. The agreement is also hoped to stimulate advancement towards the African Union’s ambition of policy co-ordination and harmonisation across the continent. This would reduce risks from regulatory non-enforcement if an approach similar to the EU was adopted, in which EU law is supreme and governs all states. The recency of this agreement coming into force precludes substantive evidence of its ability to reduce political and regulatory risk. However, it is anticipated to achieve this end and make investing in SSA more attractive through creation of a pan-African single market of approximately 1.2 billion people.

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In accordance with UNEP, the most promising countries for investment are those in which a level playing field between RETs and incumbent technologies has been established, the market for the mitigation or adaptation technology is accessible, and political and regulatory risk is low. However, alternative considerations such as philanthropic motivations may direct investment into alternative areas, such as those where the technology may best alleviate suffering or bring greatest benefit to users. Once a location for investment has been determined the importance of sociocultural factors on product acceptance and subsequent upscaling must not be overlooked. The product should be tailored for the nuances of the society and culture targeted for its use. Research has also demonstrated the importance of usability, and the feeling of self-efficacy that results from successful utilisation of a technology in decreasing individual resistance to change and aiding the incorporation of novel technologies into new sociocultural environments.

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Thus, products

should be appropriate and easily operated to garner support and grow effectively.

Mitigation Technologies This section focuses on solar photovoltaic and wind as current technologies suitable for investment in SSA. The limited applicability of current geothermal systems to countries across SSA, and the capacity for hydropower projects to iniquitously consume resources or cease to 170

operate during drought events, decreases the attraction of these technologies. Additionally, both

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April 05 and 2018 Author: Gordon Platt, “Global Finance Magazine - 44 African Nations Sign On To Single African Market,” Global Finance Magazine. [Online]. Available: https://www.gfmag.com/magazine/april-2018/44african-nations-sign-single-african-market. [Accessed: 01-Aug-2019]. P. S. Ellen, W. O. Bearden, and S. Sharma, “Resistance to technological innovations: an examination of the role of self-efficacy and performance satisfaction,” J. Acad. Mark. Sci., vol. 19, no. 4, pp. 297–307, 1991. O. Serdeczny et al., “Climate change impacts in Sub-Saharan Africa: from physical changes to their social repercussions,” Reg. Environ. Change, vol. 17, no. 6, pp. 1585–1600, Aug. 2017, doi: 10.1007/s10113-015-0910-2. 169

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geothermal and hydropower technologies are implicated in adverse environmental disturbances 171

from ecosystem destruction to flooding and subsidence. Sustainable biofuels and concentrating solar power (CSP) will be considered in the emerging technologies section. The choice of technology to invest in is influenced by the natural resource base of a country in conjunction with the considered political environments across SSA. IRENA has used geographical imaging software (GIS) to assess the natural resource endowments for wi nd, solar photovoltaic (PV), concentrating solar power (CSP) and bioenergy technologies across the African continent. Results indicated that wind potential is universally greater at the coast, with eastern African countries such as Somalia having the greatest potential, followed by southern and then western coastal regions. The centre of the continent had significantly lower potential for wind energy than other regions. Similarly, solar PV and CSP potentials are greatest in eastern and southern regions due to high levels of direct irradiation. Solar PV exhibits significant potential in western SSA, however due to higher solar fluctuations experienced here, CSP is less viable in the west as it requires direct sunlight to operate effectively. Due to its broad applicability solar PV exhibited the greatest overall potential across the African continent, with a theoretical energy potential of 660 pwh.

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With regard to bioenergy, the fertile equatorial region offers the greatest potential for the cultivation of energy crops; however, most countries below the Sahel region exhibit potential for bioenergy production.

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Solar Photovoltaic and Wind Technologies Solar PV and wind technologies are apposite in the context of SSA for diverse environmental, social and political reasons. The ability of these technologies to reduce the emissions of GHGs by replacing energy generation from the combustion of fossil fuels implicates them in a multitude of environmental virtues, from direct air pollution reductions to ameliorated climate change effects. Socially, the use of solar-PV and wind technologies to replace traditional power stations

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D. Massonnet, T. Holzer, and H. Vadon, “Land subsidence caused by the East Mesa Geothermal Field, California, observed using SAR interferometry,” Geophys. Res. Lett., vol. 24, no. 8, pp. 901–904, 1997, doi: 10.1029/97GL00817; S. Sharma, J. C. Kuniyal, and J. C. Sharma, “Assessment of man-made and natural hazards in the surroundings of hydropower projects under construction in the beas valley of northwestern Himalaya,” J. Mt. Sci., vol. 4, no. 3, pp. 221–236, Sep. 2007, doi: 10.1007/s11629-007-0221-2. “Estimating the Renewable Energy Potential in Africa: A GIS-based approach,” p. 73. “Estimating the Renewable Energy Potential in Africa: A GIS-based approach,” p. 73. 172 173

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significantly decreases the water requirements for electricity generation, serving to mitigate water 174

shortages and power outages in times of drought. In rural Africa many households rely on diesel for ~ $1 per Kwh, however currently decentralised solar-PV systems can produce power 175

for ~ $0.20 per Kwh. Thus, this technology is known to decrease the economic burden of energy provision for rural families. This is significant as energy acts as an enabler for improvements in a myriad of sectors including health, education and agriculture, and acts to 176

decrease overall vulnerability to climate change. Politically the ability of solar-PV and wind to help countries progress towards their specific electrification and general development targets is reflected in their enormous theoretical potentials (660pwh for solar, 460pwh for wind).

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Furthermore, a transition towards utilising diverse RETs in energy supply enhances a

country’s energy security by diversifying the current portfolio of power supply and decreasing any reliance on imported fuels.

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Solar-PV Currently solar-PV is envisaged as one of the most promising renewable technologies available 179

due to its exceptional cost decreases and efficiency improvements over time. In the context of SSA it is viewed as under-exploited with ‘great opportunities for growth.’

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These growth

potentials can be seen blossoming in the privatisation, liberalisation and deregulation of energy markets across SSA and in the normative policies currently in force specifically to promote private investment in solar power – these are anticipated to increase further as governments recognise the political, social and environmental advantages of diversifying into clean energy.

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T. J. Feeley et al., “Water: A critical resource in the thermoelectric power industry,” Energy, vol. 33, no. 1, pp. 1–11, Jan. 2008, doi: 10.1016/j.energy.2007.08.007. J. Amankwah-Amoah, “Solar energy in sub-Saharan Africa: The challenges and opportunities of technological leapfrogging,” Thunderbird Int. Bus. Rev., vol. 57, no. 1, pp. 15–31, 2015. K. Olsen and A. Jimenez, “Renewable energy for rural health clinics,” Natl. Renew. Energy Lab. Publ., 1998; K. R. Daka and J. Ballet, “Children’s education and home electrification: A case study in northwestern Madagascar,” Energy Policy, vol. 39, no. 5, pp. 2866–2874, 2011; S. Mushtaq, T. N. Maraseni, J. Maroulis, and M. Hafeez, “Energy and water tradeoffs in enhancing food security: A selective international assessment,” Energy Policy, vol. 37, no. 9, pp. 3635–3644, 2009. “Estimating the Renewable Energy Potential in Africa: A GIS-based approach,” p. 73. O. Rosnes and M. Shkaratan, Africa’s power infrastructure: investment, integration, efficiency. World Bank Publications, 2011. M. Taylor, P. Ralon, and A. Ilas, “The power to change: solar and wind cost reduction potential to 2025,” Int. Renew. Energy Agency IRENA, 2016. J. Amankwah-Amoah, “Solar energy in sub-Saharan Africa: The challenges and opportunities of technological leapfrogging,” Thunderbird Int. Bus. Rev., vol. 57, no. 1, pp. 15–31, 2015. “Climatescope 2019.” [Online]. Available: http://global-climatescope.org/. [Accessed: 24-Feb-2020]. 174

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At the small systems level the commercial viability of a product is dependent upon the business model chosen. Despite providing the least cost option over time, solar-PV systems require a large upfront cost for the module and associated components. Consequently, business models such as the pay-as-you-go plan (PAYG), which allow incremental payments over time for a product, have been successful in enabling rural households to overcome the initial high upfront costs for solarPV systems. This model additionally often requires the ability for payments to be made via 182

mobile phones in small instalments. The use of mobile payment collection in the PAYG model has enabled the company M-Kopa to become so successful.

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Case Study: M-Kopa In Kenya, Uganda and Tanzania the least cost electrification option for rural households is represented by Solar-PV home systems (SHS) available from the commercial company M-Kopa. Rural customers are predicted to save $750 over the first 4 years of using SHS compared with traditional polluting kerosene fuel. These cost savings enable rural households to invest in th eir future development, and the decreased use of Kerosene reduces household air pollution and the co-occurring adverse health consequences. The company connects approximately 500 new customers daily, and in January 2018 M-Kopa had connected 600,000 homes. By May 2020 MKopa is anticipated to have reached 4 million people and achieved $300 million in cumulative income. The company is thus able to be both highly profitable and alleviate the economic and social burdens of rural populations reliant on Kerosene.

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In conjunction with the PAYG model, the ‘Avon’ model, which involves a personal sale and distribution service for solar-PV technologies to consumers in their homes, is fruitful. This model provides a link between the solar-PV producer and the consumer which aids in the reflective and reflexive design of the modules themselves, and the pricing systems used to market them - thus 185

making the products more culturally and financially acceptable. This is the model used by the highly successful solar sisters in Nigeria and Tanzania.

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J. Amankwah-Amoah, “Solar energy in sub-Saharan Africa: The challenges and opportunities of technological leapfrogging,” Thunderbird Int. Bus. Rev., vol. 57, no. 1, pp. 15–31, 2015. “M-KOPA-IMPACT-REPORT-2019.pdf.” “M-KOPA-IMPACT-REPORT-2019.pdf.” J. Amankwah-Amoah, “Solar energy in sub-Saharan Africa: The challenges and opportunities of technological leapfrogging,” Thunderbird Int. Bus. Rev., vol. 57, no. 1, pp. 15–31, 2015. “Home - Solar Sister.” [Online]. Available: https://solarsister.org/. [Accessed: 27-Feb-2020]. 183 184 185

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At larger scales, the commercial viability of solar-PV is linked instead to external factors, such as the liberalisation of the energy sector and the incentive mechanisms in place for foreign investment in solar-PV.

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The success of these in enabling commercially successful independent

power production using solar-PV can be seen in the Nzema project in Ghana, and other private solar-PV projects in South Africa (Sishen Photovoltaic Plant) and Morocco (Ouarzazate solar power plant). Wind The technical wind power potential on the African continent exceeds the current total levels of electrical power consumption, however the resource potential is heterogeneously dispersed 188

across SSA in contrast to solar energy. Coastal countries and those in the east and the south of the continent have significantly greater wind energy potential than those in the interior, thus the 189

universality of this technology is reduced. However, like solar-PV, over the past 30 years wind technologies have seen advancements in power output and efficiency. Presently the post-initial costs of electricity generation are lower for wind than other RETs due to the high intensity of wind energy, the superior efficiencies of turbine technologies and the lowe r land requirements 190

for wind plants. Thus, if placed in apt locations wind energy technologies can represent optimal long-term investments. Currently wind power already plays a ‘significant role in power grid systems’ in both developed and emerging country markets, for example the 1458MW capacity 191

Alta wind energy Centre in the U.S and the 1064MW Jaisalmer wind park in India. However, due to the higher initial start-up costs for wind farms these technologies are most amenable to large-scale grid connected infrastructure projects, which can achieve greater economies of scale. These are already emerging in SSA. Case Study: The lake Turkana wind power project

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“Financing Renewable Energy in Developing Countries: Drivers and Barriers for Private Finance in sub -Saharan Africa – United Nations Environment – Finance Initiative.” [Online]. Available: https://www.unepfi.org/publications/regions-publications/africa-middle-east-publications/financing-renewableenergy-in-developing-countries-drivers-and-barriers-for-private-finance-in-sub-saharan-africa/. [Accessed: 01-Aug2019]. D. Mentis, S. Hermann, M. Howells, M. Welsch, and S. H. Siyal, “Assessing the technical wind energy potential in Africa a GIS-based approach,” Renew. Energy, vol. 83, pp. 110–125, 2015. D. Mentis, S. Hermann, M. Howells, M. Welsch, and S. H. Siyal, “Assessing the technical wind energy potential in Africa a GIS-based approach,” Renew. Energy, vol. 83, pp. 110–125, 2015. Y. Kumar et al., “Wind energy: Trends and enabling technologies,” Renew. Sustain. Energy Rev., vol. 53, pp. 209–224, 2016. Y. Kumar et al., “Wind energy: Trends and enabling technologies,” Renew. Sustain. Energy Rev., vol. 53, pp. 209–224, 2016. 188

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The lake Turkana wind power project in Kenya was completed in 2018 and represents Africa’s largest wind farm. The project has 365 turbines which provide 17% of the country’s installed electricity generation capacity. It was developed by the Lake Turkana Wind Power Limited company, which is owned by a consortium of public and private entities including KP and P Africa B.V, and Aldwych International. Additionally, Google has invested $40 million for a 12.5% equity stake in the project, suggesting it believes in the profitability of this large-scale wind 192

development on the African continent. Like with expansive, grid-connected solar-PV systems the viability of wind projects is linked to appropriate government policies and incen tives. The lake Turkana wind power project was made possible by a 20-year power purchase agreement with the Kenya Power and Lighting Company.

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Future Technologies Concentrating solar power Concentrating solar power (CSP) generates energy by focusing direct irradiation from the sun on a point with a small surface area using mirrors, this causes a massive increase in temperature for the targeted area. This heat can be transferred using an aptly named heat transfer fluid and used to drive a heat engine such as a steam turbine, which can be connected to an electrical power generator.

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CSP is advantageous in comparison to current photovoltaic systems as it can be readily combined with a heat storage system, which acts as a giant battery and enables CSP plants to continue to generate electricity when the sun is not shining. These heat storage systems have greater scale, longevity and are more efficient than solar-PV modules supplemented with electrical batteries. Consequently, CSP plants are more amenable for integration into existing grids. Furthermore, CSP arrangements such as solar towers have working temperatures that can range from 2501000°C and the technologies efficiency increases non-linearly with respect to its working temperature - this increases the potential efficiency of CSP systems in comparison with solarJ. Wanzala, “Google invests in Lake Turkana, power project,” The Standard . [Online]. Available: https://www.standardmedia.co.ke/business/article/2000180339/google-invests-in-lake-turkana-power-project. [Accessed: 01-Aug-2019]. J. Wanzala, “Google invests in Lake Turkana, power project,” The Standard . [Online]. Available: https://www.standardmedia.co.ke/business/article/2000180339/google-invests-in-lake-turkana-power-project. [Accessed: 01-Aug-2019]. A. Hussain, S. M. Arif, and M. Aslam, “Emerging renewable and sustainable energy technologies: State of the art,” Renew. Sustain. Energy Rev., vol. 71, pp. 12–28, 2017. 192

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PV.

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However, CSP can only use direct normal irradiation (DNI), unlike solar-PV which can

use both DNI and diffuse horizontal irradiance (DHI). This limits the operability of CSP to very hot dry regions. Fortunately, appropriate climatic conditions are abundant across much of southern and eastern SSA, and the prevalence of hot dry regions is anticipated to increase further under conditions of global warming.

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Four main CSP technologies exist; parabolic troughs, linear Fresnel reflectors, parabolic dishes and solar towers. These are distinguished by their mirror arrangements, the surface area onto which irradiation is concentrated, and the heat transfer fluids they use. Curre ntly parabolic troughs are the most mature technology, with commercially proven investment costs, operation costs and storage capabilities. However, parabolic trough arrangements are less amenable to dry cooling than solar towers, and therefore have the potential to increase water stress in times of drought by drawing on sparse water reserves for cooling - as in traditional power plants.

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Case Study: The Ouarzazate solar power plant The Ouarzazate solar power plant in Morocco, north Africa has experience of issues regarding CSP technology choice. The project progressed through three developmental phases, termed Noor I, Noor II and Noor III. Noor I used commercially proven parabolic trough technologies 3

with wet cooling - which consumed 1.7 million m of water per year - more than a typical fossil fuel burning power station. In contrast the final phase Noor III used solar tower technologies with dry cooling to reduce the environmental and social costs of water consumption in the Sahara 198

Desert. Like the lake Turkana wind power project, the Ouarzazate solar power plant was accomplished through public private partnerships which were effectively engineered to de -risk private investment. These partnerships demonstrate current belief in the private sector regardi ng the profitability of CSP technologies.

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A. Hussain, S. M. Arif, and M. Aslam, “Emerging renewable and sustainable energy technologies: State of the art,” Renew. Sustain. Energy Rev., vol. 71, pp. 12–28, 2017. D. Green, “Solar Energy facts – Concentrated Solar Power (CSP) Vs Photovoltaic panels (PV).” [Online]. Available: http://www.renewablegreenenergypower.com/solar-energy-facts-concentrated-solar-power-csp-vsphotovoltaic-pv-panels/, http://www.renewablegreenenergypower.com/solar-energy-facts-concentrated-solar-powercsp-vs-photovoltaic-pv-panels/. [Accessed: 01-Aug-2019]. A. Hussain, S. M. Arif, and M. Aslam, “Emerging renewable and sustainable energy technologies: State of the art,” Renew. Sustain. Energy Rev., vol. 71, pp. 12–28, 2017. “Fourati FFCO.3 Vladimir FAGBOHOUN, Principal Legal Counsel.pdf.” .https://www.afdb.org/fileadmin/uploads/afdb/Documents/Environmental-and-Social-Assessments/Morocco__Ouarzazate_Solar_Power_Station_Project_II_-_ESIA_Summary.pdf 196

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Biofuels: Cellulosic Ethanol There exists a precedent for energy production using biofuels in SSA, with Zambia, Tanzania, Mali and Cote de Ivoire pursuing biodiesel production using Jatropha – a drought resistant crop 199

species. The seeds of Jatropha contain up to 40% oil, which is high in comparison to alternative species such as soybean that contain just 20%, and this oil can be used directly in standard diesel 200

engines. However, none of the species have been properly domesticated and consequently the 201

productivity of Jatropha is highly variable. Furthermore, as a crop species it competes with land for food production. This is problematic considering the Food and Agricul tural organisation anticipates a 60% rise in global food demand before 2050.

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This rise in food demand is

occurring in concert with a declining availability of land for crop species due to anticipated encroachments of woody shrub species, and other climate transitions which are unfavourable for agriculture.

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Emerging cellulosic ethanol production (CEP) technologies can utilise wood residue and the integuments of straw, corn-starch and herbaceous woody crops. Consequently, these technologies do not directly compete for land with crops species but instead utilise the inedible 204

waste they produce. CEP methods are also sustainable under changing climatic conditions - as 205

they can exploit the anticipated proliferation of woody flora to produce ethanol. The benefit of ethanol as an alternative fuel source is attested in the success of the existing NDZiLO ethanol plant in Mozambique. This was a joint venture between the commercial businesses CleanStar Mozambique and Novozymes.

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Financially the competency of the plant is evidenced in the

success of its first marketing campaign, during which 80% of the addressable market placed an

K. D. Jr, “Africa’s Renewable Energy Potential,” Africa.com, 19-Nov-2013. [Online]. Available: https://www.africa.com/africas-renewable-energy-potential/. [Accessed: 01-Aug-2019]. “Estimating the Renewable Energy Potential in Africa: A GIS-based approach,” p. 73. “Estimating the Renewable Energy Potential in Africa: A GIS-based approach,” p. 73. “Estimating the Renewable Energy Potential in Africa: A GIS-based approach,” p. 73. O. Serdeczny et al., “Climate change impacts in Sub-Saharan Africa: from physical changes to their social repercussions,” Reg. Environ. Change, vol. 17, no. 6, pp. 1585–1600, Aug. 2017, doi: 10.1007/s10113-015-0910-2. A. Hussain, S. M. Arif, and M. Aslam, “Emerging renewable and sustainable energy technologies: State of the art,” Renew. Sustain. Energy Rev., vol. 71, pp. 12–28, 2017. A. Hussain, S. M. Arif, and M. Aslam, “Emerging renewable and sustainable energy technologies: State of the art,” Renew. Sustain. Energy Rev., vol. 71, pp. 12–28, 2017; O. Serdeczny et al., “Climate change impacts in SubSaharan Africa: from physical changes to their social repercussions,” Reg. Environ. Change, vol. 17, no. 6, pp. 1585– 1600, Aug. 2017, doi: 10.1007/s10113-015-0910-2. “CleanStar Mozambique launches world’s first sustainable cooking fuel facility.” [Online]. Available: https://www.novozymes.com/en/news/news-archive/2012/05/cleanstar-mozambique-launches-worlds-firstsustainable-cooking-fuel-facility. [Accessed: 29-Feb-2020]. 199

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order. Socially, the plant has already diminished charcoal use in rural populations, decreasing local air pollution and the associated negative health effects. Ethanol can also be used directly as a fuel in motor vehicles, and Angola, Ethiopia, Kenya, Malawi, Mozambique, South Africa and Zimbabwe currently have blending mandates for biofuels, ensuring product demand.

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There are two approaches to CEP – cellulolysis and gasification. Under cellulolysis, cellulose from the wood and crop residues is hydrolysed to form glucose, and glucose is then fermented to produce ethanol. In contrast, gasification converts the carbon content of the wood and crop residues into a synthetic gas. The micro-organism Clostridium then ingests this gas and produces 209

ethanol and water. Current challenges for improving CEP methods include enhancing process integration to decrease the inefficiencies that arise from the number of stages, as well as rheological considerations concerning the flow of mater through the production processes which is made difficult by the solid state of input materials.

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For cellulolysis, improving

enzymatic hydrolysis and the development of more robust fermenting organisms is necessary to 211

decrease production costs and increase the efficiency of cellulose conversion. However, these obstacles do not undermine the current viability of CEP as evidenced by the successful SEKAB 212

Birla Domsjö commercial factory in Sweden, but instead suggest it will become increasingly competitive as methods improve over time. Adaptation Technologies Advanced weather and climate forecasting The proliferation of earth-observing satellites in concert with the increasing spatial resolution at which these visualise data, has created an enabling environment for production of hyper-local,

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“Africa’s First Sustainable Biofuel Plant Opens in Mozambique.” [Online]. Available: https://www.triplepundit.com/story/2012/africas-first-sustainable-biofuel-plant-opens-mozambique/65541. [Accessed: 29-Feb-2020]. “Policies.” [Online]. Available: https://www.irena.org/policy. [Accessed: 29-Feb-2020]. A. Hussain, S. M. Arif, and M. Aslam, “Emerging renewable and sustainable energy technologies: State of the art,” Renew. Sustain. Energy Rev., vol. 71, pp. 12–28, 2017. A. Hussain, S. M. Arif, and M. Aslam, “Emerging renewable and sustainable energy technologies: State of the art,” Renew. Sustain. Energy Rev., vol. 71, pp. 12–28, 2017. A. Hussain, S. M. Arif, and M. Aslam, “Emerging renewable and sustainable energy technologies: State of the art,” Renew. Sustain. Energy Rev., vol. 71, pp. 12–28, 2017. “Our sustainable history,” SEKAB. [Online]. Available: https://www.sekab.com/en/sustainability/our-sustainablehistory/. [Accessed: 29-Feb-2020]. 208 209

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highly accurate weather forecasts and terrain imagery.

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These can be used by both pastoralist 214

and agriculturalists in SSA to plan livestock movements and growing seasons. For example, the commercial company Ignitia provides highly localised, accurate weather forecasts to farmers in the tropics. These forecasts enable agriculturalists to optimise agricultural practices for current weather and long-term climatic conditions. The benefits of Ignitia are demonstrated in the 80% increase in income that customers using the service experience - due to the decreased risk of loss 215

from unforeseen inclement conditions. The results are particularly promising in the context of SSA where 65% of the labour force is employed in agriculture, and 96% of this agriculture is rain fed and thus dependent on prevailing conditions.

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The STAMP project, now a private public partnership coordinated by the Dutch NGO SNV, uses satellite data to liberate pastoralists from traditional methods of determining water and biomass location. Cow herders in the Sahel region would previously pay motorcyclists or passing camel drivers to report back to them water availability in the surrounding area.

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This was

expensive, time consuming and often unprofitable as tips would be bad or the water source would be occupied by another herd upon arrival. The STAMP project instead uses satellite data to describe to pastoralists the availability and quality of biomass, surface water abundance and current herd concentrations around these resources in the surrounding area. Since 2017 the project has received 1307 calls and 84,816 text messages from over 55,000 customers, and 98% of users are satisfied or very satisfied with the service.

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The successes of the STAMP project and Ignatia may be attributed to their usability. Both projects require simple mobile phones (already abundant in SSA due to technological leapfrogging) and can be used and understood in native languages. They have also built up user trust over time due to the reliability of the data they provide. Projects hoping to imitat e their success should follow a similar user-centric approach. The value of companies such as Ignitia is 213

“How do cow herders spot water in the Sahara? With satellites, of course. - MIT Technology Review.” [Online]. Available: https://www.technologyreview.com/s/613335/how-do-cow-herders-spot-water-in-the-sahara-with-satellitesof-course/. [Accessed: 01-Aug-2019]. “STAMP+: Building on success.” [Online]. Available: http://www.snv.org/project/stamp-building-success. [Accessed: 01-Aug-2019]. “Ignitia | Tropical Weather Forecasting.” [Online]. Available: https://www.ignitia.se/. [Accessed: 24-Feb-2020]. O. Serdeczny et al., “Climate change impacts in Sub-Saharan Africa: from physical changes to their social repercussions,” Reg. Environ. Change, vol. 17, no. 6, pp. 1585–1600, Aug. 2017, doi: 10.1007/s10113-015-0910-2. “STAMP+: Building on success.” [Online]. Available: http://www.snv.org/project/stamp-building-success. [Accessed: 01-Aug-2019]. “STAMP+: Building on success.” [Online]. Available: http://www.snv.org/project/stamp-building-success. [Accessed: 01-Aug-2019]. 214

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anticipated to increase in the future as satellite imaging becomes ever cheaper, abundant and higher in resolution. This forward progression occurs against a backdrop of historic data accumulation from existing imagery, which can be used to further increase the accuracy of predictive algorithms, improving the precision of future forecasts.

Insurance Products Traditional crop insurance is under-utilised in SSA as it is inappropriate for small-hold farmers who are over-represented within this region. The methods are unsuitable as they involve costly individual loss assessments and are vulnerable to problems such as moral hazard and adverse selection - due to the information asymmetries between the insurer and the policyholder.

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However, crop insurance products are increasingly necessary in SSA. Currently, banks are unwilling to lend to farmers due to risk of non-repayment during times of drought; this creates a self-fulfilling prophecy by preventing farmers from purchasing seeds or equipment to improve their productivity and drought resistance.

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Crop insurance could sever this cycle by mitigating

the financial losses incurred by farmers if crops fail, making them eligible for loans to develop their climate robustness.

Weather based crop insurance (WBI) is an innovative insurance product that uses weather observations as a proxy for losses in individual production. This mitigates the issues of moral hazard inherent in traditional crop-insurance by eliminating the information asymmetries involved in attributing cause and effect in individual loss assessments. The lack of individual assessment in WBI also decreases the administrative and technical complexity of the scheme, increasing its affordability for rural farmers. The World Bank created a WBI in Malawi that is more efficient, effective and easily distributed than traditional methods and has enabled local banks to expand their lending portfolios whilst concomitantly increasing farmers’ access to 221

credit. The World Bank system measures changes in rainfall and assumes under drought conditions yields will suffer; the insurance then pays out in part or in whole depending on the

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T. W. Bank, “Weather index-based crop insurance in Malawi : facilitating farmers’ access to agricultural credit,” The World Bank, 97471, Mar. 2012. T. W. Bank, “Weather index-based crop insurance in Malawi : facilitating farmers’ access to agricultural credit,” The World Bank, 97471, Mar. 2012. T. W. Bank, “Weather index-based crop insurance in Malawi : facilitating farmers’ access to agricultural credit,” The World Bank, 97471, Mar. 2012. 220

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severity of the drought. In 2008 when the project was piloted 2,600 farmers participated and bought policies worth up to $2.5m.

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To operate effectively WBI requires reliable, timely and high-quality data from weather stations and satellite networks. Weather based insurers and their clients could use forecasting technologies such as those employed by Ignitia to anticipate and prepare for future drought events. Consequently, these adaptation products have interdependencies that may be exploited to accelerate growth in both industries. Currently the existing insurance frameworks across countries in SSA do not include WBI explicitly, thus regulatory action is required to rewrite these existing frameworks to include WBI if programmes are to be expanded.

Drought Resistant Crops Present varieties of important crop species in SSA such as maize, sorghum, millet and groundnut have demonstrated high sensitivities to temperature and precipitation deviations. For example, maize exhibits high sensitivity to temperatures above 30°C (each day during the growing season the crop spends above 30°C causes its yield to decline by 1% compared to optimal conditions).

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These sensitivities increase the vulnerabilities of extant crop varieties to ch anging climatic conditions, thus there is a need for seed sector development throughout SSA. However, an investigation by the Access to Seeds Foundation has found that international and domestic seed companies operating in western and central Africa are not delivering new varieties seed to smallhold farmers.

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This is attributed to the lack of plant breeding by companies, which limits the

number of new varieties adapted to the region that can be made commercially available. There is therefore a gap in the market for developing new crop varieties adapted to the changing climatic conditions of central and western Africa. The development of resilient crop varieties is pertinent presently as in 2019, the FAO released a report that concluded, ‘hunger is on the rise in almost all subregions of Africa… and the prevalence of undernourishment has reached levels of 22.8

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T. W. Bank, “Weather index-based crop insurance in Malawi : facilitating farmers’ access to agricultural credit,” The World Bank, 97471, Mar. 2012. O. Serdeczny et al., “Climate change impacts in Sub-Saharan Africa: from physical changes to their social repercussions,” Reg. Environ. Change, vol. 17, no. 6, pp. 1585–1600, Aug. 2017, doi: 10.1007/s10113-015-0910-2. “New study identifies Nigeria as leading seed hub in Western and Central Africa; Nigeria’s Value Seeds tops ranking | African Media Agency.” [Online]. Available: http://amediaagency.com/new-study-identifies-nigeria-asleading-seed-hub-in-western-and-central-africa-nigerias-value-seeds-tops-ranking/. [Accessed: 01-Aug-2019]. 223

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percent in sub-Saharan Africa’,

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undernourishment is anticipated to increase further with

current crops under conditions of global warming.

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The commercial viability of both domestic and international crop companies in SSA has been demonstrated in the success of the Nigerian company Value Seeds, and the French firm Technisem – which operates in 17 countries across western Africa. However, the market is far from saturated as evidenced by low number of companies operating in the Central Africa Republic, Guinea and Guinea-Bissau, and the current void in in-situ breeding which could provide a new company with a competitive advantage.

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As mentioned previously regarding

biofuels, the crop plant Jatropha has not been domesticated and consequently currently suffers from erratic changes in productivity (0.1 to 12 tons per hectare variations have been reported).

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There therefore exists an additional market opportunity for domesticating Jatropha specifically, to increase its productivity and the reliability of its productivity. The infrastructure required to produce biofuels using Jatropha already exists in many SSA countries, thus there would be immediate demand for high productivity Jatropha crops.

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THE DEVELOPMENT OF SMART CITIES IN JAPAN Increasing

environmental concerns and

awareness,

urbanization and

technological

advancements have together resulted in an urgent requirement and opportunity to rethink how we construct and manage our cities. During the last decade, these interlinked issues and developments have converged under the new heading of Smart Cities. The concept of smart cities is becoming popular in scientific and policy debates. To understand this concept, it is important to understand why cities are considered as key elements for the future. Cities play a crucial role in economic and social aspects globally and have a huge impact 230

on environment. United Nations Department of Economic and Social Affairs, in 2018 Revision 225

I. FAO, W. WFP, and UNICEF, “The state of food security and nutrition in the world 2019: safeguarding against economic slowdowns and downturns,” 2019. O. Serdeczny et al., “Climate change impacts in Sub-Saharan Africa: from physical changes to their social repercussions,” Reg. Environ. Change, vol. 17, no. 6, pp. 1585–1600, Aug. 2017, doi: 10.1007/s10113-015-0910-2. “New study identifies Nigeria as leading seed hub in Western and Central Africa; Nigeria’s Value Seeds tops ranking | African Media Agency.” [Online]. Available: http://amediaagency.com/new-study-identifies-nigeria-asleading-seed-hub-in-western-and-central-africa-nigerias-value-seeds-tops-ranking/. [Accessed: 01-Aug-2019]. “Estimating the Renewable Energy Potential in Africa: A GIS-based approach,” p. 73. P. Döll, “Vulnerability to the impact of climate change on renewable groundwater resources: a global-scale assessment,” Environ. Res. Lett., vol. 4, no. 3, p. 035006, Jul. 2009, doi: 10.1088/1748-9326/4/3/035006. Mori, K., & Christodoulou, A. (2012). Review of sustainability indices and indicators: Towards a new City Sustainability Index (CSI). Environmental impact assessment review, 32(1), 94-106. 226

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of World Urbanization Prospects, indicated that more than 55 percent of the world’ population is living in urban areas and this is projected to rise to 68 percent by 2050.

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This indicates that

globally most resources are consumed in the cities, contributing to their economic importance, but also highlighting their poor environmental performance. As cities are major contributors to climate change because according to UN Habitat, cities consume 78 percent of the world’s energy and produce more than 60 percent of greenhouse gas emissions and yet they account for less 232

than 2% of the earth’s surface. This scenario can become challenging in future and that is why it requires cities to find ways to manage new challenges. Cities across the globe have started looking for solutions which can enable mixed land uses, transportation linkages and high -quality urban services with long-term positive effects on the economy. Many new approaches related to urban services are based on harnessing technologies, including ICT, helping to create what people call “smart cities”.

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Smart cities, associated with technological innovation initiatives will drive technology adoption into the public sector at an increasing rate, particularly in emerging markets which are facing acute demographic challenges.

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Many definitions of smart cities exist and sometimes the

adjective “smart” is replaced by other words like “intelligent” or “digital”. A ‘smart city’ is a vague concept and that is why it is used in ways which are not always consistent. One definition sees smart cities as “a high-tech intensive and advanced city that connects people, information and city elements using new technologies in order to create a sustainable, greener city, competitive and innovative commerce, and an increased life quality”.

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According to Marsal-Llacuna et al., ‘Smart City’ initiatives try to improve urban performance by using data, information and information technology (IT) to provide more efficient services to citizens, monitor and optimise existing infrastructure, increase collaboration among different

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DESA, UN. (2018). “Revision of world urbanization prospects”, accessed 29 April 2019 at https://www.un.org/development/desa/publications/2018-revision-of-world-urbanization-prospects.html. United Nations (2019), “Cities and Pollution contribute to climate change”, accessed 29 April 2019 at https://www.un.org/en/climatechange/cities-pollution.shtml. Albino, V., Berardi, U., & Dangelico, R. M. (2015). Smart cities: Definitions, dimensions, performance, and initiatives. Journal of urban technology, 22(1), 3-21. Bélissent, J. (2010). Getting clever about smart cities: New opportunities require new business models. Cambridge, Massachusetts, USA. Bakıcı, Tuba, Esteve Almirall, and Jonathan Wareham. "A smart city initiative: the case of Barcelona." Journal of the knowledge economy 4, no. 2 (2013): 135-148. Marsal-Llacuna, M. L., Colomer-Llinàs, J., & Meléndez-Frigola, J. (2015). Lessons in urban monitoring taken from sustainable and livable cities to better address the Smart Cities initiative. Technological Forecasting and Social Change, 90, 611-622. 232

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economic actors, and encourage innovative business models in both the private and public sectors. The term “smart cities” has two kind of domains – the ‘hard’ domain and the ‘soft’ domain.

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The hard domains include physical infrastructure such as buildings, energy grids, water 238

management, natural resources, mobility, waste management and logistics. In hard domains, ICT plays a vital role in the functions of the system. On the other hand, in soft domains like education, policy, culture, innovations, social inclusion and government, ICT is utilised, but it is not usually decisive. Bélissent listed some examples of smart solutions, utilising technology, for the city systems - addressing both hard and soft domains (see Figure 1):

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Figure 1. Examples of Technology Solutions for Smart Cities

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Albino, V., Berardi, U., & Dangelico, R. M. (2015). Smart cities: Definitions, dimensions, performance, and initiatives. Journal of urban technology, 22(1), 3-21. Neirotti, P., De Marco, A., Cagliano, A. C., Mangano, G., & Scorrano, F. (2014). Current trends in Smart City initiatives: Some stylised facts. Cities, 38, 25-36. Bélissent, J. (2010). Getting clever about smart cities: New opportunities require new business models. Cambridge, Massachusetts, USA. 238

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Key Components and Characteristics Dirks and Keeling emphasised on the importance of integration of various systems of the city (transport, energy, healthcare, education, physical infrastructure, food, water and safety) in 240

creating a smart city. In the dense city environment, no system operates in isolation and systems are interlinked. Lombardi et al. identified six components of smart cities, associated with different aspects of urban life, as shown in Table 1. characteristics of smart cities which are: •

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Albino et al. listed the most common

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Political efficiency and social and cultural development, enabled by city’ networked infrastructure;

•

Business-led urban development and creative activities for urban growth are emphasized;

•

Social inclusion of various urban residents and social capital in urban development;

•

Natural environment is considered as strategic component for the future.

Table 1. Key Components of Smart City Aspect of Urban Component of Life

Industry

Education

Smart City Smart Economy

Smart People

Description Public expenditure on R&D, Public expenditure on education, GDP

per head

city population,

Unemployment rate etc. Percentage of population with secondary-level education, Foreign language skills, Participation in life-long learning,

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Dirks, S., & Keeling, M. (2009). A vision of smarter cities: How cities can lead the way into a prosperous and sustainable future. IBM Institute for business Value, 8. Lombardi, P., Giordano, S., Farouh, H., & Yousef, W. (2012). Modelling the smart city performance. Innovation: The European Journal of Social Science Research, 25(2), 137-149. Albino, V., Berardi, U., & Dangelico, R. M. (2015). Smart cities: Definitions, dimensions, performance, and initiatives. Journal of urban technology, 22(1), 3-21. 241

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Individual level of computer skills, Patent applications per inhabitant etc. Number of universities and research centers in the city, E-Democracy

Smart

e-Government

on-line availability,

Percentage

Governance

households with Internet access at home, e-Government use by individuals etc.

Logistics

Infrastructures

Smart Mobility

The use of ICT in modern transport technologies to improve urban traffic. Ambitiousness of CO2 emission reduction strategy,

Efficiency

Efficient use of electricity, Efficient use of water, Area in

& Smart

Sustainability

green space, Greenhouse gas emission intensity of energy

Environment

consumption, Policies to contain

urban

sprawl,

Proportion of recycled waste etc. Proportion of the area for recreational sports and leisure Security Quality

use, Number of public libraries, Total book loans and

Smart Living

other media, Museum visits, Theater and cinema attendance.

Smart Cities in the Face of Climate Change We can understand the development of smart cities as an urban strategy that seeks advanced technological solutions to the challenges faced by the policy makes today, among which climate change has taken centre stage. The existing major cities across the globe are fuelling their infrastructure with technology to give birth to what is called a “smart city”. Smart cities are the last tool standing to curb the carbon and greenhouse gas emissions at its earliest. According to Global e-Sustainability Initiative,

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globally, ICT-enabled smart buildings can generate a

CO )emission reduction potential of 1.96 Gt CO , 5 billion MWh of energy saved and 261 billion 2

litres of water saved from being wasted due to use of data-driven more efficient processes. ICT has the potential to curb Global Greenhouse Gas (GHG) emissions by 20% by 2030 by helping consumers and companies to save and use energy more intelligently. Smart cities offer ICT-enabled solutions in the form of smart grids and smart meters, which have a great potential to deliver and save energy more efficiently. Similarly, applying ICT to mobility 243

http://smarter2030.gesi.org/# Retrieved on 29th April, 2019.

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can make travelling more efficient. The renewable fuel and low-energy consumption in smart vehicles have tremendous opportunities to eliminate carbon emissions completely.

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Smart cities allow cities to have green spaces, while maintaining a rich countryside as well. Deforestation is another reason behind the carbon emissions. Having green spaces in the urban areas, while protecting forests and farmlands on the countryside can help reduce the GHG from the atmosphere.

Actions to reduce greenhouse gas (GHG) emissions often reduce co-emitted air pollutants, bringing co-benefits for air quality and human health. A study by West et al. in 2012 simulated the co-benefits of global GHG reductions on air quality and human health, via two mechanisms: a) reducing co-emitted air pollutants; and b) slowing climate change and its effect on air 245

quality. Results of the study indicated that air quality and health co-benefits provides strong additional motivation for transitioning to a low-carbon future. Hence, converting cities into smart cities can make them more liveable. Smart cities providing opportunities for investment in climate change technology Smart cities open the opportunities for the global technology companies to mark et solutions which can support more sustainable urban futures. Global institutions such as the World Bank, World Economic Forum, OECD, and EU back the idea of digitising urban systems and infrastructures as a viable proposition for securing environmental sustainability and economic 246

growth. The proliferation of smart cities is providing private sector with an opportunity to work with governments. It is a mutually beneficial partnership, given that this means new business for 247

private sector and greater expertise and cost-efficiency for government sector. A combination of the technology and innovation of government, cities and companies to benefit citizens, is offered by a successful public-private partnership. Public-private partnerships can help accelerate

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https://www.smartcity.press/smart-city-strategies-for-global-warming/ Retrieved on 29th April, 2019. West, J. J., Smith, S., Silva, R. A., Adelman, Z., Fry, M. M., Anenberg, S., ... & Emmons, L. K. (2011, December). Co-benefits of Global Greenhouse Gas Mitigation for Air Quality and Human Health via Two Mechanisms. In AGU Fall Meeting Abstracts. Viitanen, J., & Kingston, R. (2014). Smart cities and green growth: outsourcing democratic and environmental resilience to the global technology sector. Environment and Planning A, 46(4), 803-819. https://www.information-age.com/collaborative-city-smart-cities-123473907/ Retrieved on 2nd May, 2019. 245

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the pace of change and implementation of smart cities infrastructure, by working together for the greater good.

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Connecting cities with financial opportunities is an essential component of building smart cities, ensuring urban resilience and achieving the right targets. This requires reallocation of existing budgets and the ability to raise revenues. The case-studies from Japan, discussed below, highlights public-private partnerships as the primary mechanism used to finance capital-intensive, smart cities’ infrastructure. In order to encourage investment in such infrastructure, targeted taxes and incentives can also be used by favouring low-carbon energy over fossil-fuel sources or density over urban sprawl. Green infrastructure can be encouraged with the help of land value capture mechanism while leveraging private finance. Debt financing instruments such as green bonds have great potential to drive climate-smart investment by allowing cities to acquire long-term debt at stable prices. Apart from traditional approaches, some of the innovative approaches to promote investments in smart cities are already being piloted in some cities in the developed countries. These innovative approaches include resilience bonds and climate insurance. Innovative financial and collaborative projects will be a key to preparing and implementing sustainable smart cities as bankable projects, developing domestic financial markets and mobilizing private financing for local investment. To deliver promising smart cities, it is vital to move from planning to pilots, from pilots to projects and from projects to partnerships. Smart Cities and Inclusivity (Developed and Developing Countries Collaboration) Sustainability and inclusion have been recently emphasized in smart city development projects. This will make sure that smart city projects are more inclusive and not a luxury for developed countries only. Japan, as a case, aims to create inclusive, secure, creative, competitive and environmentally friendly cities with the help of civic participation and evidence-based planning.

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Cities in japan have shared their urban planning expertise to help their counterparts, specifically from developing countries, across the globe. For example, Yokohama city supported Metro Cebu, Philippines to complete the Roadmap Study for Sustainable Urban Development for that

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https://enterprise.verizon.com/resources/articles/the-importance-of-public-private-partnerships-to-make-smartcities-a-reality/ Retrieved on 2nd May, 2019. “JICA Assistance for Sustainable Urban Development,” World Bank, 2015, http://www.worldbank.org/content/dam/Worldbank/Feature%20Story/japan/pdf/event/2015/070115_JICA.pdf. 249

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city

and Kitakyushu city collaborated with Surabaya, Indonesia, to address pollution251

management problems. Japan has also funded mass rapid transit (MRT) system in Jakarta to provide an attractive and modern alternative to vehicular transport to ensure smart city operation. Japan International Cooperation Agency (JICA) also partnered with Inter-America Development Bank, Switzerland and Australia in the Emerging Sustainable Cities Initiative in 2013. This program helped cities in Caribbean and Latin America target environmental sustainability, urban sustainability and good governance. The initiative provided technical and financial aid by fostering partnerships with 71 cities.

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Government of Japan has also introduced the Joint Crediting Mechanism (JCM) which is a project-based bilateral offset crediting mechanism to facilitate the diffusion of low-carbon technologies. So far 16 countries including 10 countries from Asia and Pacific region have joined JCM. Government of Japan, Asian Development Bank (ADB) and affiliated organizations provide the financial support to the projects under JCM. Jakarta as a smart city in Indonesia employed JCM as an authoritative carbon trade scheme that promotes cooperation among Japanese and Indonesian companies to achieve Japan’s and Indonesia’s greenhouse gases (GHGs) emission reduction targets [20].

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Investors and Venture Capital Firms Focusing on Technological Investment in Smart Cities Green is becoming the new gold and the growth of smart cities are leading towards directing many investors’ and venture capital firms’ funds towards smart cities with the specific focus on technological solutions. Some of the examples include:

Alliance Ventures (Norway and USA)

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JICA Concludes Metro Cebu Roadmap Study for Sustainable Growth toward 2050,” Japan International Coopera- tion Agency, November 2, 2015, http://www.jica.go.jp/philippine/english/office/topics/news/151102.html. “JICA Assistance for Sustainable Urban Development,” World Bank, 2015, http://www.worldbank.org/content/dam/Worldbank/Feature%20Story/japan/pdf/event/2015/070115_JICA.pdf. “IDB and JICA Strengthen Cooperation: Focus on Emerging and Sustainable Cities,” Inter -American Development Bank, November 7, 2013, http://www.iadb.org/en/news/announcements/2013-11-07/esci-and-jicacooperation,10640.html. CSIS Project on Prosperity and Development and The JICA Research Institute (JICA-RI), 2016 - Transformative Innovation for International Development - Operationalizing Innovation Ecosystems and Smart Cities for Sustainable Development and Poverty Reduction Available at: https://www.jica.go.jp/jicari/publication/booksandreports/jrft3q0000005yj3-att/TransformativeInnovation.pdf. 251

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It is a new €1B fund of automotive alliance of Mitsubishi, Nissan and Renault which is currently targeting business model and technology innovation in vehicle electrification, car connectivity, autonomous system and mobility services.

Breakthrough Energy Ventures (USA) It is also a new $1B fund initiated by Bill Gates and a few of his billionaire friends around the world. The strategy of this venture capital firm is to invest in the early stage start-up with disruptive technologies that can make this world a better place and accelerate a global energy transition to a 100% renewable energy system.

Munich Venture Partners (Germany and Europe) It is a German cleantech venture capital which closed their second fund at €130M in 2013. European Investment Fund is the largest investor in this venture capital. Its portfolio features 50% of the cleantech deals.

Evercity (Russia) Another venture capital and private equity firm which provides early stage investment and acceleration for tech companies that help make global cities smarter and more sustainable. All the above-mentioned venture capital firms and investors have allocated their funds to green tech which are used to build smart and sustainable cities. Hence, smart cities are creating opportunities for venture capitalists to invest in green technology and on the other hand they are also creating opportunities for green tech-based start-ups to flourish. ASEAN Smart City Network (ASCN) The ASCN is collaborative platform where up to three cities from each ASEAN Member States (AMS), including capitals – with room for expansion when it matures – work towards the common goal of smart and sustainable urban development. The initial proposal of ASCN was compiled by Singapore and the Inaugural Meeting of the ASCN was held on 8 July 2018 in Singapore. The aim of ASCN is to: (a) Facilitate cooperation on smart cities development in AMS; (b) Catalyze bankable projects with the private sector by linking up with private sector solution providers; (c) Secure funding and support from ASEAN’s external partners (e.g. multilateral financial institutions) to plan and implement smart cities. The Wilberforce Society Cambridge, UK

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Successful Smart Cities - Case-Studies from Developed Countries This section provides some examples of the successful smart cities in the developed countries of Asia. Two cases - Kashiwa-no-ha smart city and Yokohama smart city - are taken from Japan. Kashiwa-no-ha Smart City, Japan 254

The conception of Kashiwa-no-ha Smart City has been celebrated as an example of sustainable urban planning that pools the academic, private, and public spheres together. The Shimosa Plateau, now home to Kashiwa-no-ha, was a famous horse-breeding area since early times. After the Korean War, United States Air Force built a communication base, on an area of 188 hectares, in Kashiwa-no-ha. In 1961, Mitsui Fudosan (a Japanese real estate company) opened Kashiwa Golf Club in Kashiwa-no-ha and in 1979, when United States Air Force returned the entire property, the area made a fresh start as a new town. In 2008, the University of Tokyo and Chiba University announced the Kashiwa-no-ha International Campus Town Initiative, spotlighting the area as a next-generation model city. Kashiwa-no-ha Smart City entails the partnerships among public, private, and academic sectors with the vision to create an open platform for all of humanity as well as a stage for resolving issues. The aim is to realize the new vision for the cities of tomorrow via Kashiwa-no-ha smart city.

Key Aspects/Concepts Mitsui Fudosan formulated three urban development concepts to help Japan fulfill its commitment of tackling the challenges of future:

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(a) The first concept is about creating an environmentally friendly city i.e. EnvironmentalSymbiotic City; (b) The second concept is called City of New Industry Creation and it is focused on fostering growth fields that become sources of new vitality for Japan; and

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Kashiwa-no-ha Smart City. Mitsui Fudosan Co., Ltd. Accessed April 2019. https://www.kashiwanoha-smartcity.com/en/concept/whatssmartcity.html Retrieved on 2nd May, 2019.

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(c) The third concept is about people of all ages enjoying healthy and secure life, i.e. City of Health and Longevity. All these concepts are not isolated but interlinked and connected to each other.

Environmental initiatives to deal with climate change involving technology Kashiwa-no-ha was created as an Environmental-Symbiotic City for the future by taking advantage of natural resources and leveraging world class knowledge and technology to tackle environmental and energy issues, while ensuring resilience during disasters. As mentioned earlier, energy use management via technology can lead to reducing CO

emissions. For the entire city, Kashiwa-no-ha smart city optimizes the energy use. Figure 2 (a & b) shows how does Area’s Energy Management System (AEMS) looks like. Kashiwa-no-ha is one of the most advanced demonstration in all Japan (and the world), in terms of energy consumption and production, because if its sophisticated AEMS.

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With the help of AEMS, the energy use,

production, storage, distribution and human’s relation to energy is completely reimagined.

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Russell, P. (2015). The Emergence of Smart Cities. UT School of Architecture. Retrieved from https://sustainability. utexas. edu/sites/sustainability. utexas. edu/files/EmergenceofSmartCiti es_PatrickRussell. pdf. The Wilberforce Society Cambridge, UK

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On one side, the Home Energy Management System (HEMS) optimizes energy use for residential area and on the other end Building Energy Management System (BEMS) does that for commercial buildings. AEMS coordinates all the energy interactions among all homes and commercial buildings. The city also claims to have Japan’s first smart grid which uses distributed power sources to share electricity, efficiently and smartly, in the community. The use of smart grid reduced the CO emissions by lowering the peak consumption of the city 2

by 26% and conserving energy. The sustainable design of the buildings (including green walls and roofs, air tubes, LED lightening, natural ventilation and lightening, thermos wood etc. (See Figure 3 (a & b)) also compliments the reduction of CO emissions. Two model Gate Square buildings 2

are constructed (Figure 3 (c)), in Kashiwa-no-ha smart city with Japan’s world-leading green building technology, and by combining the sustainable design and AEMS in these buildings the CO emissions from these two buildings are reduced by 40%. 2

The smart city also taps the renewable and unused energy sources, including solar panels, well and rainwater, wind power equipment and other renewable sources of energy. The unt apped energy, for example, heat from cogeneration systems, biogas generated from waste are being drawn to slash CO emissions. 2

The overall long-term vision of Kashiwa-no-ha smart city is to reduce CO2 emissions and increase comfort. In the roadmap to future, appropriate steps have been embarked to minimize the carbon footprint by lowering CO2 emissions by 60% by 2030.

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Yokohama Smart City, Japan The Yokohama Smart City Project is a part of national initiative for Japan Smart City. The history of Yokohama city can be traced back to 1854 when a trade treaty was negotiated by U.S Navy, with Japan, and that made Yokohama a trading city. In 1923, the great Kanto earthquake severely damaged the city. In 1960s, with the rail lines linking its north to Tokyo, the South was a center for local government and businesses and the central area was largely occupied by Mitsubishi Heavy Industries Corporations shipbuilding dockyards and industrial functions. Yokohama was regarded as a “huge suburban town”. In 1970s, the formalized planning of the city took off after it successfully negotiated with Mitsubishi to relocate their shipyards. In 1984, the Minato Mirai 21 Corporation was established as an organization, which was a hybrid of public and private 257

sector, to facilitate the processes of $20 billion project. During the early 1990’s the development flourished but in 1996, the land prices dropped drastically.

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In 2010, Yokohama was selected

by the Ministry of Economy, Trade and Industry (METI) as a "Next- Generation Energy and Social System Demonstration Areas” or smart city. Through Yokohama Smart City Project (YSCP), the city has been working to provide systems to optimize energy demand and supply in the city in collaboration with 34 companies (including Japan's leading energy companies, an electrical manufacturer, and construction companies). The vision of Yokohama smart city is to be an energy-recycling city that is economically strong, environmentally healthy and disaster resilient. he YSCP project has an ambitious vision, in which it “will pioneer the establishment of the world’s best smart city model in the City of Yokohama which is an advanced city with a population of 3.7 million people.

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Key Aspects/Concepts With an aim to create a city where everyone would want to live in, three concepts were conceptualized for YSCP. These concepts are: (a) Economic Value – to promote creativity to deal with various challenges; (b) Social Value – to deal with the challenge of ageing society; (c)

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Lin, Z. J. (2007). From megastructure to megalopolis: Formation and transformation of mega -projects in Tokyo Bay. Journal of urban design, 12(1), 73-92. Doo, M., Feliciano, K. (2010). Minato Mirai 21, Yokohama, Japan. Available at: https://courses.washington.edu/gehlstud/gehl-studio/wp-content/themes/gehlstudio/downloads/Autumn2010/MinatoMirai21.pdf To, K., Miyoshi, K., & Nakaseko, A. (2018). Smart plus Liveable: How Public Space should be designed towards Smart and Livable Districts. Proceedings of APPS. 258

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Environmental Value – to create environmentally friendly and liveable city. See Figure 4 – adapted from City of Yokohama 2015.

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Environmental initiatives to deal with climate change involving technology The YSCP was established with the objectives to: (a) Reach the CO emission reduction target of 2

30% by 2020; (b) Develop smart houses and Electric Vehicles (EVs); (c) Deploy Energy Management System with public participation.

During the pilot phase between 2010 – 2014, Yokohama smart city successfully implemented EMS including: House Energy Management System (HEMS), Building Energy Management System (BEMS), Community Energy Management System (CMES), Supervisory Control and Data Acquisition (SCADA), and EVs. The conceptualized city was brought into reali ty, in the form of demonstration, with the help of 34 private partners with the responsibility to manage the EMS and EVs (See Figure 6). In the pilot run, HEMS was introduced into around 4,200 households, 37 megawatts of solar panels were installed/managed, and 2,300 electric vehicles 262

were introduced. The amount of CO reduction was 39,000 tons. In 2015, a new public- private 2

body called the Yokohama Smart Business Association (YSBA) was established to advance the

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City of Yokohama (2015). FutureCity Yokohama: Innovative Solutions. Presentation at ICLEI World Congress 2015. Available at: http://www.iuc.eu/japan-en/bestpractice/yokohama/ City of Yokohama (2015). FutureCity Yokohama: Innovative Solutions. Presentation at ICLEI World Congress 2015. Available at: http://www.iuc.eu/japan-en/bestpractice/yokohama/ http://www.iuc.eu/ Retrieved on 2nd May, 2019. 261

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project from demonstration to implementation. The body aimed to promote the operation of energy-control systems and new energy partnership efforts, in addition to spreading of accumulated technology and system at home and abroad.

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Renewable energy sources in the form of solar panels (see Figure 7) and wind energy generation 264

has been installed to supplement the grid power supply. The city is currently implementing a virtual power plant project. The project started, with cooperation between the City of Yokohama, TEPCO Energy Partner, Inc. and Toshiba Energy Systems & Solutions Corporation, in 2016. The storage batteries were installed at 36 different schools and the stored energy is utilised in adjusting the energy use volume.

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In June 2013, Yokohama smart city won the “Global Green City Award” during the UN “High Level Dialogue in Implementing Rio+20 Decisions on Sustainable Cities and Urban Transport” in Berlin. Yokohama was awarded “for its outstanding efforts to create a sustainable, green and liveable city together with its citizens”.

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Challenges/Limitations Linked to Smart Cities Throughout the stages of design, implementation and operation, the realistic implementation of smart cities is challenges. Silva et al. discussed some common challenges of smart cities including cost of design and operation, heterogeneity among devices, enormous data collection and analysis, information security, and sustainability.

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Design and Maintenance This is one of the major challenges for realizing the smart city implementation. There are two categories of costs i.e. design cost and operational cost. Design cost is the capi tal cost for deploying a smart city and smaller the design cost, the higher the probability of real -world 263

City of Yokohama (2016) FutureCity Yokohama-City Development in Harmony with the Environment- Available at: https://www.nedo.go.jp/content/100778180.pdf To, K., Miyoshi, K., & Nakaseko, A. (2018). Smart plus Livable: How Public Space should be designed towards Smart and Livable Districts. Proceedings of APPS. http://www.iuc.eu/ Retrieved on 2nd May, 2019. yokohama-city.de/ Retrieved on 2nd May, 2019. Silva, B. N., Khan, M., & Han, K. (2018). Towards sustainable smart cities: A review of trends, architectures, components, and open challenges in smart cities. Sustainable Cities and Society, 38, 697-713. 264

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implementation. Similarly, operational costs are incurred due to daily city operations and maintenance tasks. In order to assure sustainability of service provision, without putting additional financial toll to the municipality, minimal operational costs are highly demanded. Smart cities have high capital as well as operational costs and this makes it quite challenging to implement sustainability.

Heterogeneity This is another key challenge for the implementation of smart cities. Smart city is composed of multiple purpose devices, sensors, appliances etc. and multi-vendors. The realization of smart city notion depends on the integration of all these heterogeneous things at the application layer. The ability to integrate and inter-operate at the application layer gets hindered if heterogeneity causes incompatibilities in the platform. It is important for smart cities to design, identify and purchase hardware and software to integrate the heterogeneous sub systems. This can make smart cities expensive not only regarding finances and technology but also regarding the appropriate human resource required to operate hardware and software.

Data and Security Infrastructure security and information security are highly emphasised in smart cities. Technological advancements have brought revolutionary changes in the major cities across the globe. Smart cities have adopted technology to improve the lives of residen ts, visitors and businesses. But at the same time, technology is also vulnerable to malicious threats and attacks, which has caused huge controversy about securing smart cities and their operations from possible attacks. For example, an attack on Illinois water utility control system in 2011, has destroyed a water pump and cut off water supply for 2200 residents. In smart cities the data volumes also tend to grow exponentially and instantly. Hence, to store, recall, analyse and transfer this amount of data, the right strategies are required. Hence, infrastructure security and information security are highly required in smart cities which incurs additional expenditures on design and implementation.

Sustainable/Resilient Design Failure management can be a key challenge for smart city development. Failures can result from natural disasters i.e. floods, tornadoes, earthquakes etc. and system failures i.e. network The Wilberforce Society Cambridge, UK

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unavailability or infrastructure breakdown. Sustainable or resilient design means immediate recovery strategies to recover from failure and revert the operations of the city back to normal. This further increases the design and operational cost of the smart city. The challenge would be to put recovery system in place with minimal effect on cost and operational efficiency.

When the above-mentioned challenges are considered the question which comes to mind is that do all these challenges make smart cities exclusive and a luxury for developed world? In context of developing countries, the implementation of smart cities can become a serious challenge, and this is attributable to many causes, including lack of economic and human resources, perceived 268

incompatibilities between cultures and technologies. Apart from this, the use of ICTs is biased by gender, race and location. For example, only a small percentage of Africans enjoy internet 269

connectivity. So, there is a need to make smart cities more inclusive for the developing world because the challenges which smart cities address are not local, but these challenges have global impact. Conclusion Increasing

environmental concerns and

awareness,

urbanization and

technological

advancements have together resulted in an urgent requirement and opportunity to build “smart” cities. Smart Cities initiatives try to improve urban performance by using data, information and information technologies (IT) which open the opportunities for the global technology companies to market solutions which can support more sustainable urban futures, specifically focusing on climate change. The proliferation of smart cities is also providing private sector with an opportunity to work with governments. It is a mutually beneficial partnership, given that this means new business for private sector and greater expertise and cost-efficiency for government sector. Keeping in mind the Public-Private-Partnership (PPP) concept in terms of governance framework, the development and implementation of Smart City projects require considerable investments that are difficult to fund with traditional public finance. In this context, PPP appear to be a suitable solution to overcome the shortage of public finance and cuts on public spending. Political will has a great role in promotion of sustainability and development of smart cities that is why the private sector cannot lead or initiate the development of smart cities; however, the

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Davison, R., Vogel, D., Harris, R., & Jones, N. (2000). Technology leapfrogging in developing countries–an inevitable luxury? The Electronic Journal of Information Systems in Developing Countries, 1(1), 1-10. Amoako, K. Y. (1998). Opening Statement at the Global Connectivity for Africa Conference. Addis Ababa,(June 2-4). 269

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private sector can: (a) advocate for smart cities; (b) actively pursue PPPs in the context of green technology investments for the development of smart cities; and (c) incentivise the development of green technology for smart cities. Japan is one of the top countries which actively promotes PPPs and investment in Greentech from private sector for the development of smart cities. With this backdrop, two case-studies from Japan, Kashiwa-no-ha and Yokohama, were discussed in this section followed by the challenges and opportunities linked to planning and implementation of smart cities for future consideration and policy recommendations.

Section 3 THE INTERNATIONAL POLITICS AND LEGAL DIMENSIONS OF CLIMATE CHANGE TECHNOLOGY INVESTMENT Introduction There are three main debates at play in the international arena when it comes to climate change and investment in climate change technology. The first is the broad ideological debate of climate emergency vs climate scepticism. The latter has been characterised in recent years by US President Donald Trump’s regular public opinion that climate change is either not occurring, or not an important priority. The policies pursued by his administration seem at sharp contrast with

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his predecessor, although it could be argued that President Obama did not take drastic enough measures in taking climate change seriously. The second debate surrounds developing countries and their development strategies. Many developed countries today enjoy the opportunity to explore a greener future with minimal loss in modern lifestyles. To get to that stage however, they have all gone through phases of industrial development and growth involving heavy emissions and pollution. Many developing nations now face criticism for the same activities which propelled more developed nations towards their current state, and this right to development at the cost of the environment is at the centre of the second major debate. While there are those who argue that sustainable development solutions are possible, there remains issues around its intricacies and the political will for it. Ironically, while traditional industrialising development fuels climate change, those developing states will also be affected the most by climate change.

The final debate is a cluster of smaller debates over specific policies and their impacts. For example, carbon tax vs cap-and-trade schemes. Criticisms of policies such as carbon credits and emissions trading schemes include the idea that they ‘greenwash’ pollution, and that they act as ‘feel-good’ measures as opposed to effective climate policies. Furthermore, many see a reliance on technology as a ‘silver bullet’ as distracting from lifestyle and public policy changes such as diet and investment in public transport infrastructure. Intertwined through these debates is the history of international climate politics, other political phenomena such as nationalism, and the role of the private sector in the development of climate change technology. These disputes and considerations, with all their complexities and nu ances demonstrate some of the difficulty in acting on climate change even at a broad international level. However, a significant portion of action against climate change needs to come from this level to have substantial impact. The Kyoto Protocol While the United Nations Framework Convention on Climate Change (UNFCCC) was signed in 1992, the Kyoto Protocol was the first international treaty which precipitated as a result of the UNFCCC’s mission, and set tangible goals in fighting climate change.

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Arguably the first cohesive global action against climate change the 1997 Kyoto Protocol (although it only entered into force in 2005) had the overarching aim of reducing greenhouse gases. In comparing it with the more recent Paris Agreement, this is one of the ways in which they differ; the Paris Agreement is much more comprehensive, targeting energy, infrastructure, agriculture, and more, whereas the Kyoto Protocol had a greater focus on greenhouse gases. However, the Kyoto Protocol did present as a rare moment of vindication for the optimists of the international system, lauded as being a binding international treaty which many developed states signed on to. And despite a focus on greenhouse gases (carbon dioxide, nitrous oxide, methane, hydrofluorocarbons, etc.), the UN’s climate experts have for many decades understood the wide-ranging effects of climate change, including extinction of flora and fauna, and a rise in the rate of extreme weather events. At its centre, the Kyoto Protocol specified ‘Flexibility Mechanisms’: strategies and means by which the 55 Annex I countries could reduce their emissions. This included International Emissions Trading, the Clean Development Mechanism (which allows Annex I states to invest in sustainable development projects in developing states) and Joint Implementation (like the Clean Development Mechanism, except that the project is based in another Annex I country).

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The main criticism throughout the entire Kyoto Protocol negotiation process and post -signing is that the targets it set would have a minimal effect on climate change and global temperatures. This was especially relevant in light of the United States never ratifying the treaty and countries like China and India – quickly industrialising states – not being subject to binding targets. One could point to a variety of reasons why this was the case: a failure of diplomacy, domestic politics, systematic flaws in the design of the Kyoto Protocol, etc. Ultimately, while the idea of the Kyoto Protocol is still hailed as a triumph of the international system, its results are mostly seen as symbolic as best. The abstract of the Kyoto Protocol is that it could be conside red as being an important diplomatic achievement. but woefully lacked the kind of results needed in the face of climate change. A more effective agreement was therefore needed, especially one that engages

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Wytze van der Gaast, ‘The Negotiation Process Leading to the Kyoto Protocol’, in International Climate Negotiation Factors, by Wytze van der Gaast (Cham: Springer International Publish ing, 2017), 57–90, https://doi.org/10.1007/978-3-319-46798-6_4. The Wilberforce Society Cambridge, UK

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important countries like the US and BRICS (Brazil, Russia, India, China, and South Africa) states.

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A key element of international climate diplomacy is the Conference of the Parties (COP), an annual meeting of the representatives of the Parties to the UNFCCC. At COPs, progress on the Convention and its respective treaties are measured, and further negotiations are undertaken. The original commitment period of the Kyoto Protocol was from 2005-2012, but COP18 in Qatar produced the Doha Amendment to the Kyoto Protocol. Under this Amendment, a second commitment period of 2013-2020 was established, adding new emission reduction targets. Importantly, the US, Canada, Russia, Japan, Australia, and New Zealand did not sign onto this 272

second commitment period. The justifications for this varied. For example, New Zealand’s Prime Minister at the time John Key spoke on how New Zealand would be a “fast follower”.

Prior to the Doha Amendment however, several other non-binding agreements had been put forth. This included the Washington Declaration by the G8+5 which agreed on emissions trading being set up for developed and developing states, and the Copenhagen Accord of COP15 which among other things put forth the establishment of the Green Climate Fund (GCF). The GCF helps to fund climate adaptation and mitigation projects in developing states. In the context of investment in climate change technology, it is an important tool to consider. One of the largest investments the fund has made has been in the form of a loan for a solar power plant in Chile. The fund operates in collaboration with banks (development banks and commercial banks) and other groups, and its effectiveness can mean that the risk in investment towards climate projects can be lowered, enticing other players to invest. However, the source of its funding is a fundamental issue in its efficacy. While President Obama pledged $3b USD to the fund and contributed $1b USD to it while in office, President Trump has derided the fund along with the 2015 Paris Agreements which he famously pulled out of, 271

Laura Poppick, ‘Twelve Years Ago, the Kyoto Protocol Set the Stage for Global Climate Change Policy’, Smithsonian, accessed 8 August 2019, https://www.smithsonianmag.com/science-nature/twelve-years-ago-kyotoprotocol-set-stage-global-climate-change-policy-180962229/; Amanda M. Rosen, ‘The Wrong Solution at the Right Time: The Failure of the Kyoto Protocol on Climate Change: The Wrong Solution at the Right Time’, Politics & Policy 43, no. 1 (February 2015): 30–58, https://doi.org/10.1111/polp.12105; Aiten Musaeva McPherson, ‘Let Them Eat Carbon: The End of the Kyoto Protocol’, Georgia Journal of International & Comparative Law 4, no. 1 (2012): 219–50; van der Gaast, ‘The Negotiation Process Leading to the Kyoto Protocol’. Rosen, ‘The Wrong Solution at the Right Time’. 272

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saying: “[b]eyond the severe energy restrictions inflicted by the Paris Accord, it includes yet another scheme to redistribute wealth out of the United States through the so -called Green Climate Fund -- nice name -- which calls for developed countries to send $100 billion to developing countries all on top of America’s existing and massive foreign aid payments.” In doing so, he pulled out of the GCF, leaving a large hole in the original $10b USD pledged in total by all the parties. The loss in potential from this is l ikely to reduce the confidence that investors and other relevant actors have in the fund and threatens tangible progress in climate change projects. The Paris Agreement The Paris Agreement arising from the 2015 COP21 in France and entering into force in November 2016, is the successor to the Kyoto Protocol. It could be said of the agreement that it aims to be as diplomatically successful as the Kyoto Protocol, while at the same time creating a tangible impact against climate change – where the Kyoto Protocol failed. The argument for its diplomatic success certainly has many points in its favour: it has been signed by 196 parties (one of which is the entire EU) including Brazil, India, and China, includes more comprehensive actions, and marked an exceptional moment of agreement amongst states of the seriousness of climate change. Importantly, the Paris Agreement also arrived in parallel with the Sustainable Development Goals (SDGs), the evolution of the Millennium Development Goals (MDGs) set by the UN as an ambitious plan to better the world and bring people out of poverty. The SDGs, like the name suggests, have a greater focus on sustainability in the face of climate change, and in some ways, it is difficult to entirely separate the Paris Agreement from the SDGs, and achieving the aims of either will also serve the other.

Table 3: Key Elements of the Paris Agreement

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Sources: European Commission, n.d.-c; United Nations Framework Convention on Climate Change, n.d.-f However, the Paris Argument has arguably had more international political drama than the Kyoto Protocol, largely due to the polarising nature of President Donald Trump. His lack of trust in multilateral institutions is not limited to the UNFCCC, but his 2017 pledge to pull out of 273

the Paris Agreement (which would happen in 2020 at the earliest) carries a significant risk to the global fight against climate change. The rise of similar leaders such as Brazil’s Bolsonaro – who is fuelling deforestation of the Amazon – and European populist parties that reject the anthropogenic causes of climate change also pose a danger. The established fact that humans are

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responsible for rising global temperatures and climate change is a hard-fought battle that has taken decades to be accepted in mainstream discourse. By re-establishing cynicism into conversation, such movements threaten to bring the conversation back in time to debate the facts instead of pushing forward in addressing the problem. The rise of nationalist politics and isolationist policies is closely intertwined with this and highlights the fragile nature of climate politics: it is still heavily reliant on the political will of state leaders, rather than the institutions and actors set up to tackle it.

Figure 1: Climate Action Tracker, based on analysis by New Climate Institute, ECOFYS, and Climate Analytics, using UNFCCC frameworks. Figure 1 from Climate Action Tracker gives a broad overview of states’ progress towards meeting o

the Paris Agreement, which aims to limit warming to 1.5 C. With the accepted lack of results from the Kyoto Protocol, many small states – especially Small Island Developing States (SIDS) o

who are at the highest risk of rising sea levels – pushed for this limit of 1.5 C rise in global o

temperatures instead of 2 C.

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From this figure, it can be clearly seen that Morocco and The Gambia (in West Africa) are the only countries currently on track to meeting the Paris Agreement’s requirements, with no country meeting the role model requirement (for going beyond the Paris Agreement). The Gambia has been given its rating due to its ambitious goal to unconditionally reduce its emissions by 2.7% by 2030, especially through the adoption of renewable technologies. It also places a strong emphasis 274

Timothée Ourbak and Alexandre K. Magnan, ‘The Paris Agreement and Climate Change Negotiations: Small Islands, Big Players’, Regional Environmental Change 18, no. 8 (December 2018): 2201–7, https://doi.org/10.1007/s10113-017-1247-9. The Wilberforce Society Cambridge, UK

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on the agriculture and forestry sectors, pledging to restore forests and increase efficiency of farmland among other strategies.

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Morocco similarly targets agriculture and forestry, though

energy appears to be where its focus is. By driving adoption of renewable energy, it aims to have more than half of its electricity come from renewable energy. One concern is that Morocco still plans to grow its coal power use, which is not compatible with the Paris Agreement.

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examples of Morocco and The Gambia however highlight the important role that renewable energy technology can play.

Concerningly, states that have been marked as ‘Critically Insufficient’ include the United States, Russia, Turkey, and Saudi Arabia. Other industrially large and important states such as China, Brazil, and Australia are labelled as ‘Insufficient’ or ‘Highly Insufficient’, whereas India is o

currently in the ‘2 C Compatible’ section. Interestingly, India is on the verge of being 1.5 C Paris Agreement Compatible, with the Climate Action Tracker remarking that India’s plans to expand its coal power generation are the only policy preventing this. India’s rapidly rising investment in renewable energy is noted as being one of the linchpins of India’s climate strategy, and it is widely agreed that the cost of renewable energy technology has dramatically reduced in recent years, and that the return on investment continues to grow. Therefore, it is perhaps confusing that India 277

would not cut back on its coal usage. This confusion also extends to China, which in the media is often both reported as being a heavy polluter through its industrialisation efforts, and a world 278

leader in green technology. The former continues to be a factor due to continual growth in coal power and other fossil fuels, not only within China, but overseas. It should be made clear: the Paris Agreement, like the Kyoto Protocol, while audacious and necessary, is still built upon the liberal international order and largely capitalist systems. Some activists argue that capitalist systems cannot be reconciled with environmental protection, while populist leaders rail against globalism and multilateralism. These ideological debates can impact the tangible work necessary to tackle climate change, as confidence in the international system affects business confidence and investment priorities. Perhaps more concerningly, some political

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‘The Gambia | Climate Action Tracker’, accessed 1 September 2019, https://climateactiontracker.org/countries/gambia/. ‘Morocco | Climate Action Tracker’, accessed 1 September 2019, https://climateactiontracker.org/countries/morocco/. ‘India | Climate Action Tracker’, accessed 1 September 2019, https://climateactiontracker.org/countries/india/. ‘China | Climate Action Tracker’, accessed 1 September 2019, https://climateactiontracker.org/countries/china/. 276

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leaders are of the belief that innovation in clean technology will eventually make its way into society and therefore all other activities can proceed business as usual for now. International trade has an important role to play. A coalition of 5 countries – New Zealand, Fiji, Costa Rica, Norway, and Iceland – are planning to begin negotiations on an “Agreement on Climate Change, Trade and Sustainability”. The plan would be to use the countries’ relatively small sizes to make rapid headway into a trade agreement that would aim to manifest into a Treaty. The core goals of the agreement involve phasing out subsidies on fossil fuels, developing guidelines on labelling of environmentally friendly goods, and eliminating tariffs on 279

environmental goods including wind turbines and solar panels. The latter goal especially could present a case for similar technologies being more attractive to international markets, spurning greater investment in them. Development vs The Environment: A Two-Way Street One of the wider challenges that developing states face is in their development itself. While developed states have gone through industrialisation in the past, usually involving significant emissions of greenhouse gases, developing states are now criticised for their ‘dirty’ development. There are several layers to this: the practical aspect of attempting to develop a state and build an industrial sector without excessive pollution is one important idea. There is also the historical hypocrisy and privilege that people in developed states enjoy their human rights (to food, water, clean air, education, etc.) because of “dirty” industrial revolutions in the past – not to mention the roles that colonisation and conflict play. There is also the complex interdependency between developed and developing states. One way this can be easily seen is in the exporting of recyclable material to China, which for many years has taken paper and plastics from the US, Canada, and other developed countries to process – which is often a toxic and environmentally damaging process. While the idea of ‘recycling’ is its own story, it is not entirely fair to deride China for its environmental practices when much of it is in service to more developed countries, and the economic value it produces for China helps its development. More recently, China has

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‘New Zealand’s Ardern Announces Five-Way Climate Trade Talks’, accessed 28 September 2019, https://news.yahoo.com/zealands-ardern-announces-five-way-climate-trade-talks-182015235.html. The Wilberforce Society Cambridge, UK

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implemented new policies, rejecting lower-quality waste. This has resulted in growing landfills as developed states find themselves unable to process these materials in cost-effective ways.

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It is therefore perhaps unfair to single out industrialising states like China or developing nations. The goods and services produced in such countries are often exported out to developed states; it is difficult to separate countries from the interconnected global economy that they all participate in. Measuring successes and failures becomes that much more difficult, and an indication of progress on one metric can be countered with other data that demonstrates a more worrying picture based on different variables. This does not take away from the fact that a handful of states contribute towards a significant percentage of emissions, but rather it highlights the complexity in focussing on individual countries. The divisions are not only between developed and developing states, but the Global North vs Global South, smaller vs larger countries. Among these are also the BRICS countries being states at a more advanced stage of development, and among which large populations look to grow wealthier as they rise out of poverty, bringing with it questions on managing per capita emissions and resource use, as carbon footprints are proportional to prosperity. The right to development and environmental protection are both enshrined in international law, but in many ways, continued development is detrimental to the environment. Calls for industrialising states to curb emissions are therefore seen as inequitable towards developing states, prompting one idea of Greenhouse Development Rights, which aims to share the “effort” in climate adaptation and mitigation more fairly.

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The idea of “sustainable development” for

developing states especially is perhaps rightly met with a sense of cynicism – creating extra steps for already disadvantaged states to go through to achieve the same things that developed states have. However, India and China have attempted to tackle the problem head on, with significant investment particularly in the energy sector. China, in particular, is a world leader in renewables: in 2017, it accounted for approximately 45% of global investment in renewable energy. It

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Cheryl Katz, ‘Piling Up: How China’s Ban on Importing Waste Has Stalled Global Recycling’, Yale E360, 7 March 2019, https://e360.yale.edu/features/piling-up-how-chinas-ban-on-importing-waste-has-stalled-globalrecycling. ‘Greenhouse Development Rights – Climate Equity Reference Project’, accessed 1 September 2019, http://gdrights.org/. 281

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continues to hold its place as the biggest producer of wind turbines and solar panels, as well as batteries. The two figures below highlight the significant role China plays in this area.

As net importers of fossil fuels, investment in domestic energy generation also provides China the strategic benefit of energy independence. This global move away from fossil fuels of course draws eyes towards the Middle East, which for many decades has had oil and gas as the centrepiece of their economic development. The gulf states are thankfully proactive and pragmatic, creating ambitious plans to diversify their economies in a future that is not reliant on fossil fuels. However, the concrete effects of these diversification strategies draw some cynicism, with analysts suggesting that significant public policy and economic policy changes need to be made domestically before these states can truly see a future beyond oil.

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The optimism should also not shade the continued reliance on coal that many states have. As previously noted, India has planned expansion of coal plants, and China is only slowly making progress on the air quality in its bustling metropolises.

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Dr. Hayder H. Tuama, ‘Economic Diversification and Oil Revenuesin the Arab Gulf Countries - The Case of Saudi Arabia’, JOURNAL OF ECONOMICS AND DEVELOPMENT STUDIES 6, no. 4 (2018), https://doi.org/10.15640/jeds.v6n4a15; Martin Hvidt, ‘Economic Diversification in GCC Countries- Past Record and Future Trends’ (Kuwait Programme on Development, Governance and Globalisation in the Gulf States, London School of Economics, March 2013). The Wilberforce Society Cambridge, UK

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Another incorrect assumption is also to imagine that developed states are free from coal either. Australia in particular is one of the world’s leading coal producers and exporters, and its climate diplomacy and climate policies are strongly influenced by the domestic politics of coal. While energy remains a highly important and strategic sector, infrastructure could be argued to be more relevant. A report by The Development Bank of Singapore Limited (DBS) and the UN Environment Programme suggests that in ASEAN, the biggest opportunity for investment is in infrastructure – centred around energy distribution, water, telecommunications, and climate 283

mitigation and adaptation. The creation of the Asian Infrastructure Investment Bank (AIIB) in 2015 heralded the central role that infrastructure plays in rapidly developing economies, and the st

comprehensive opportunities that infrastructure development in the 21 century brings – to build resilient systems incorporating the knowledge and experiences of urban planning from around the world.

Policies: The Price of Emissions Pricing carbon remains among the most hotly contested technical debates in emissions reduction mechanisms, with a carbon tax and cap-and-trade systems on either side. Without digging too deeply into the economic theory behind taxes and international trade, it can be hard to understand the debate. And even with a strong theoretical background there is no unanimous consensus. In recent years some economists and policy analysts have offered that a hybrid system which incorporates some aspects of one mechanism into the other provides the best chance for significant progress on the matter. Indeed, it would seem that a mixed policy provides the greatest emissions reductions for a country like China.

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Both carbon taxes and cap-and-trade schemes are means by which a price can be placed on carbon, and thereby a way to measure and integrate emissions into national and international economic activity. While a carbon tax simply taxes emissions, a cap-and-trade system sets a limit on emissions and allows trading of permits or carbon credits where possible, which means that firms wanting to emit more than their allocation must buy credits to do so from other firms which

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‘Green Finance Opportunities in ASEAN’, The Inquiry into the Design of a Sustainab le Financial System, November 2017. Wei Li and Zhijie Jia, ‘Carbon Tax, Emission Trading, or the Mixed Policy: Which Is the Most Effective Strategy for Climate Change Mitigation in China?’, Mitigation and Adaptation Strategies for Global Change 22, no. 6 (August 2017): 973–92, https://doi.org/10.1007/s11027-016-9710-3. 284

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have credits to spare. Sources of complexity are not only in how such systems are implemented, but also how collected money is spent. For example, carbon taxes generate significantly more revenue globally than emissions trading systems, but a significantly lower amount of those 286

revenues are spent on ‘green initiatives’ compared to emissions trading systems. However, the state of local energy markets also factors into the success of either system – depending on whether the market is a monopoly or collusive – and therefore empirical evidence and context also ought 287

to be taken into account. Regardless, policies on pricing carbon are one of the most important and established ways in which climate change can be tackled. Domestic and Regional Politics However, domestic politics and non-state actors again play an important role in how effective such policies are. Australia is perhaps the clearest example of this. The government of the day implemented a carbon tax in 2012 which was slated to be one of the world’s biggest state revenues from carbon pricing, but the opposition party went into the next election with a key platform of repealing the tax. In 2014, after winning the election the previous year, they fulfilled their campaign promise.

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While corporate influence is not as big of a political issue in Australia as it is in countries like the US or Brazil, the coal industry is among a few that at least holds the attention of the Australian political sphere. The mining sector plays a significant role in Australia’s economy, and it is therefore unsurprising that in the most recent election the coal industry spent several million dollars on political advertising, and continues to lobby the government on issues such as cancelling transition policies for skilled coal workers and instead supporting new industry-related 289

construction. It does not help that Australia has had considerable instability in its federal leadership for the past decade, which contributes to a lack of confidence in Australian politics nationally and internationally. 285

James K. Boyce, ‘Carbon Pricing: Effectiveness and Equity’, Ecological Economics 150 (August 2018): 52–61, https://doi.org/10.1016/j.ecolecon.2018.03.030; Rachel Cleetus, ‘Finding Common Ground in the Debate between Carbon Tax and Cap-and-Trade Policies’, Bulletin of the Atomic Scientists 67, no. 1 (January 2011): 19–27, https://doi.org/10.1177/0096340210393705. Jeremy Carl and David Fedor, ‘Tracking Global Carbon Revenues: A Survey of Carbon Taxes versus Cap-andTrade in the Real World’, Energy Policy 96 (September 2016): 50–77, https://doi.org/10.1016/j.enpol.2016.05.023. Fan-Ping Chiu et al., ‘The Energy Price Equivalence of Carbon Taxes and Emissions Trading—Theory and Evidence’, Applied Energy 160 (December 2015): 164–71, https://doi.org/10.1016/j.apenergy.2015.09.022. Carl and Fedor, ‘Tracking Global Carbon Revenues’. Ben Smee, ‘Coal Industry Urges Re-Elected Morrison Government to Build New Coal Plants’, The Guardian, 20 May 2019, sec. Australia news, https://www.theguardian.com/australia-news/2019/may/20/coal-industry-urges-reelected-morrison-government-to-build-new-coal-plants. 286

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In Brazil, the rise of the far-right populist Jair Bolsonaro to the Presidential post has also brought with it reports of a drastic rise in deforestation to make way for farming, and agriculture lobbies 290

have been implicated in political decisions relating to that. In such cases, domestic politics and non-state actors – namely, multinationals and industry lobby groups – can obfuscate the political conversation on climate policies, and can also prove very detrimental, like the case of Amazonian deforestation has shown.

In regional institutions, the EU is arguably the only effective player. The design of the system allows for policies and legislation to be enacted across the region, under which member states are all broadly bound. Its climate strategies include legislation under a “climate and energy package” with targets for the year 2020, a “climate and energy framework” for the 2021 – 2030 291

period, and a long-term strategy appealing for a “climate-neutral Europe by 2050”. The EU’s climate policies have not been without criticism and challenges, but the strength of its institutions and the relative level of cooperation between member states to politically participate in it demonstrates the potential of regional cooperation, especially in the face of an issue like climate change. The EU is often compared to ASEAN, and as is the case with most issues, ASEAN’s design and geopolitics prevents significant regional progress on an issue like climate change. This comparison is largely unfair, as ASEAN is not purposed to be like the EU. Indeed, ASEAN prides itself on not signing away the complete independence of states through multitudes of legally binding treaties. But, the lack of progress is nevertheless troubling considering ASEAN states are among those likely to be most impacted by rising sea levels, extreme weather events, and ecological distress. The ASEAN Agreement on Transboundary Haze Pollution is one of the 292

only relevant environmental treaties the group has signed, with limited reported success. With regard to climate change, a consensus has been reached to “explore the possibility of developing a harmonised approach to measuring, reporting and verifying greenhouse gas emissions as a first

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Gabriel Stargardter and Anthony Boadle, ‘Brazil Farm Lobby Wins as Bolsonaro Grabs Control over Indigenous Lands’, Reuters, 3 January 2019, https://www.reuters.com/article/us-brazil-politics-agriculture-idUSKCN1OW0OS. European Commission, ‘Climate Strategies & Targets’, Text, Climate Action - European Commission, 23 November 2016, https://ec.europa.eu/clima/policies/strategies_en. Daniel Heilmann, ‘After Indonesia’s Ratification: The ASEAN Agreement on Transboundary Haze Pollution and Its Effectiveness as a Regional Environmental Governance Tool’, Journal of Current Southeast Asian Affairs 34, no. 3 (December 2015): 95–121, https://doi.org/10.1177/186810341503400304. 291

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step towards further regional collaboration on carbon markets.” This demonstrates the extent to which ASEAN cooperation stands in general: aspirational, cohesive, but little immediate legislative impact. A casual observer may also miss the cooperation seen in the ASEAN Climate Change Initiative (ACCI), or the various working groups under particular sectors such as agriculture, fisheries. However, these are mostly mechanisms to monitor progress or develop strategies. This is not to say that individual states are not acting – rather, that formalised regional cooperation or action on climate change outside the EU is not a trademark of any regional body.

There is, however, increasing cooperation between the EU and ASEAN, especially as it relates 294

to sustainable development and disaster risk reduction. Additionally, unlike the EU, ASEAN states also have the assistance of the Asian Development Bank (ADB) and Asian Infrastructure Investment Bank (AIIB), among others, to aid in development. The ADB for example has pledged several billion dollars in energy and in sustainable transport for the Asia-Pacific member states. A lesser known but still important regional intergovernmental group is the South Asian Association for Regional Cooperation (SAARC). The SAARC has in many instances generated formal declarations on the seriousness of climate change but has struggled to tangibly act to meet the aims of those declarations. A large part of this is due to political and strategic tensions between member states, which hinders cooperation. Moreover, geopolitical conflicts will always take precedence over issues such as climate change, and the relative volatility of the region does not currently support significant collaborative action.

Furthermore, regions in any part of the world are not strictly defined, and regional organisations have a lot of overlap. The diagram below shows the main regional organisations of Asia. This allows for politics to be played out between organisations: a recent example is reports of India shifting focus from SAARC to the Bay of Bengal Initiative for Multi-Sectoral Technical and

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‘ASEAN Countries Join Forces for Climate Action | UNFCCC’, accessed 9 August 2019, https://unfccc.int/news/asean-countries-join-forces-for-climate-action. European Union External Action, ‘Backgrounder on EU-ASEAN Development Cooperation’, Text, EEAS European External Action Service - European Commission, accessed 1 September 2019, https://eeas.europa.eu/headquarters/headquarters-homepage/66301/backgrounder-eu-asean-developmentcooperation_en. 294

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Economic Cooperation (BIMSTEC).

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The opportunities for politicking pose an added risk in

preventing urgent cooperative action.

Similarly, the African Union has issued statements concerning the threat that climate change poses to the region. And like ASEAN, cooperation is certainly visible: in 2009, the Committee of African Heads of State on Climate Change (CAHOSCC) was established, to act as a cohesive political platform to speak on climate change on behalf of the continent. Like Southeast Asia and the Pacific, Africa stands as one of the most threatened regions against climate change. By some measures, Africa contributes less than 5% to global greenhouse gas emissions, a figure that provides some perspective to the disproportionate impact the continent faces. Africa also has several intra-regional groups, such as the Economic Community of West African States (ECOWAS) and the Intergovernmental Authority on Development (IGAD) which have developed climate policy frameworks for their specific sub-regions.

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The Pacific islands make up a significant portion of SIDS, and due to factors such as low population, level of development, and distance from other parts of the world, are regularly overlooked in climate politics – despite the heavy use of the term “Asia-Pacific” or “Indo-Pacific”. The Pacific Islands Forum in 2008 signed the Niue Declaration on Climate Change, but the region continues to often be at the mercy of states like Australia and the US. In recent meetings

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Sudha Ramachandran Diplomat The, ‘India’s BIMSTEC Gambit’, The Diplomat, accessed 10 August 2019, https://thediplomat.com/2019/05/indias-bimstec-gambit/. Florian Krampe, Roberta Scassa, and Giovanni Mitrotta, ‘Responses to Climate-Related Security Risks: Regional Organizations in Asia and Africa’, SIPRI Insights on Peace and Security (Stockholm International Peace Research Institute, August 2018); ‘Africa’s Approach to Climate Change Negotiation’, Oxford Research Group, accessed 9 August 2019, https://www.oxfordresearchgroup.org.uk/blog/africas-approach-to-climate-change-mitigation. 296

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of the Pacific Islands Forum, it has been reported that Australia worked to weaken a climate change resolution due to a section which called on the US to return to the Paris Agreement, and succeeded in diminishing a more serious tone in a declaration.

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There is also a growing debate that climate change is a serious national security issue: not simply in terms of food and water, but also in more traditional strategic matters such as conflict; concerns grow that climate change could act as a ‘threat multiplier’. Several intergovernmental groups in Africa have also warned of the role climate change could play with regards to creating or exacerbating conflict in the region.

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Another important consideration is that broad commitments and even policies can have many loopholes, which can be difficult to see without digging into the specifics of legislation. One common criticism of climate politics is that leaders and institutions are fond of making optimistic sweeping statements about their commitments and progress in meeting them. However, in the implementation it is not difficult for certain sectors to be advantaged over others, or for state capture (corruption) to allow for exceptions to be made for certain firms. Indeed, Transparency International marked the United States, Brazil, and Czech Republic as states to watch in their 2018 Corruption Perception Index.

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Kate Lyons and Ben Doherty, ‘Australia Tried to Water down Climate Change Resolution at Pacific Islands Forum: Leader’, The Guardian, 6 September 2018, sec. World news, https://www.theguardian.com/world/2018/sep/06/australia-tried-to-water-down-climate-change-resolution-at-pacificislands-forum-leader. Krampe, Scassa, and Mitrotta, ‘Responses to Climate-Related Security Risks: Regional Organizations in Asia and Africa’. 298

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The dramatically low scores across developed states highlights the low probability of seeing favourable private sector activity, in the areas that need positive action the most. The Role of the Private Sector This raises the matter of the varying roles the public and private sector play. With multinational corporations and political non-state actors, it can be difficult to map the playing field. The cynical view that the private sector will fundamentally only act to mitigate risk to its bottom line or to enrich shareholders is not without reason, and corruption is not only a phenomenon seen in developing countries. Corporations are just as guilty as politicians are of delivering strong statements in favour of ideas without necessarily acting on them or engaging in ‘greenwashing’ behaviour which ultimately acts to bolster their brand. However, there are those who argue that the private sector can and do play an important role. When President Trump first arrived in the White House, corporate leaders such as Robert Iger of Disney and Elon Musk of Tesla/SpaceX, lobbied Trump heavily to keep the US in the Paris Agreement. While they failed in this effort, it does show one way in which the private sector can take a leading and actively political responsibility.

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Philanthropy is another avenue, most

famously exemplified by the Bill and Melinda Gates Foundation. In addition to a significant public health and medical focus, the foundation also invests in development of various agricultural and sanitation technologies. When it comes to investment in technologies, the private sector and non-governmental entities have a major advantage over states: a greater appetite for risk. Investment in technology development is a relatively risky venture, but there is a noted gap in climate finance of the funding required for climate adaptation and mitigation. A full transition into a clean green world might mean that states need to find ways to leverage capital in the private sector to funnel investment in relevant areas, especially in developing countries. Partnerships and policies that facilitate this would presumably be necessary, but challenges lie in how individual states work with corporations that stretch across borders. However, they represent an opportunity for addressing

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Luis da Vinha, ‘Competition, Conflict, and Conformity: Foreign Policy Making in the First Year of the Trump Presidency’, Presidential Studies Quarterly 49, no. 2 (June 2019): 280–309, https://doi.org/10.1111/psq.12509; David Shepardson, ‘Musk, Iger to Quit Trump Advisory Councils after Paris Accord Decision’, Reuters, 2 June 2017, https://www.reuters.com/article/us-usa-climatechange-musk-idUSKBN18S6EO. The Wilberforce Society Cambridge, UK

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gaps in engaging with climate challenges. One study suggests that public-private partnerships (PPPs) offer the optimal outcome especially in cases where uncertainty is high. However, the same study found that when bargaining power is unequal, results were not ideal, suggesting that one of the pivotal challenges is in getting the balance right.

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Beyond the UN-related contexts, the World Economic Forum (WEF) and its annual meeting in Davos, Switzerland, represents a more purpose-built environment for relevant discussion. The meeting brings together political leaders, business leaders, NGOs, and more, for talks on a variety of issues relating to global economics and development. The forum has suffered from criticism on a variety of subjects including elitism, lack of gender balance, and ultimately sustaining status quos. The opportunity is being seized however, to have the people who drive global investment acting on climate change, as the meetings increasingly focus on the issue. For example, a WEFfacilitated group of CEOs in 2018 openly called for emissions reductions, global carbon pricing mechanisms, and investment in relevant technologies.

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Regardless, tackling the inertia among polluting industries is perhaps still a puzzle for many states: direct policy interventions, market-influencing mechanisms, taxes, subsidies, etc. can all have complex outcomes, even more so in cases where such industries play a significant role in economies.

Opportunities for Private Sector Stakeholders under the Kyoto Protocol The current global climate change regime illustrates that private sector stakeholders should prepare for a low-carbon future. The main achievement of the Kyoto Protocol and Marrakech accords is to convey signals to businesses that the future is going to be low carbon; therefore, emissions of greenhouse gases will not only cost you money but also will be restricted. It is worth mentioning that businesses in a country are dependent on the eligibility of the Party to engage in CDM, JI, and International Emissions Trading. If the Party is suspended from using a mechanism and/or fails to meet the criteria, then private sector stakeholders will experience the

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Marco Buso and Anne Stenger, ‘Public-Private Partnerships as a Policy Response to Climate Change’, Energy Policy 119 (August 2018): 487–94, https://doi.org/10.1016/j.enpol.2018.04.063. Alliance of CEO Climate Leaders, ‘An Open Letter from Business to World Leaders: “Be Ambitious, and Together We Can Address Climate Change”’, World Economic Forum, accessed 28 September 2019, https://www.weforum.org/agenda/2018/11/alliance-ceos-open-letter-climate-change-action/. 301

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same problem. As the United States does not participate in the process, there are much more uncertainty for American businesses.

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Under the Kyoto mechanisms, especially CDM, TNCs and businesses based in developed countries and developing countries can meet their reduction targets by funding projects for emission reduction in developing countries. Transnational corporations (TNCs) and businesses can improve their corporate performance through the utilization of the CDM and contribute to sustainable development. The rhetoric around the Kyoto Protocol and Climate Change talks expands markets for advanced technologies and new business opportunities. Moreover, TNCs and businesses can consider CDM-related business opportunities. For example, they can benefit from certified emission reduction credits (CERs) themselves. Foreign entities can fund projects in developing countries, where TNCs and businesses operate, in order to meet their targets. Therefore, private sector stakeholders in developing countries could implement their programs, reduce their emissions, and invest in R&D and/or new “green” and energy efficient technologies for their operations.

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For example, industrial installations in the European Union must limit their GHG emissions under the EU Emission Trading Scheme. In 2008, failure to do so could lead to a fine of €100 304

per tonne of CO2. Therefore, TNCs and businesses in the EU have two main ways to achieve Kyoto targets. Either they can take into account lower-cost CDM production opportunities in developing countries or have to limit their GHG emissions (preferably for their future operations).

The carbon market plays a huge role in shifting private investment flows. The expansion of the carbon market as well as the auction of allowances for emissions from international bunker have already been suggested. Those suggestions could be beneficial for the private sector stakeholders considering the benefits coming from the carbon market.

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Torvanger, A. (2001). An evaluation of business implications of the Kyoto Protocol. CICERO Report, 5(December). United Nations. (2005). Kyoto Protocol Offers Investment Opportunities in Developing Countries. Retrieved from https://www.un.org/press/en/2005/tad2011.doc.htm United Nations. (2005). Kyoto Protocol Offers Investment Opportunities in Developing Countries. Retrieved from https://www.un.org/press/en/2005/tad2011.doc.htm United Nations Framework Convention on Climate Change. (2007). INVESTMENT AND FINANCIAL FLOWS TO ADDRESS CLIMATE CHANGE. 303

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The Paris Agreement and Private Sector Stakeholders The Agreement focuses on the role of non-Party stakeholders such as cities, civil society, the private sector, etc. in addressing climate change. The agreement tries to encourage the private sector and other stakeholders to build resilience to the adverse effects of climate change, scale up their support in order to reduce more emissions, and promote cooperation between various stakeholders.

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Moreover, Article 4 stresses the role of supervisory designated body in incentivi sing and facilitating participation of public and private entities in the mitigation of GHG emissions. At the same time, the Article 8 recognises the importance of holistic approach, including e nhancing public and private sector participation, in implementation of NDCs.

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The Paris agreement means that climate regulation is an integral part of policy enabling environment in all sectors. The national climate plans translate into domestic regulations. The agreement recognises the role of the private sector as an important stakeholder in addressing climate change and conveys the signal to make low emission and/or emission-neutral investments. Under the Agreement, governments are committing to accelerate the transition to the clean economy and provide favourable policy environment for investors and businesses. The businesses could use NDCs as for forecasting the regulatory environments that they operate or try to operate. As the Agreement binds countries to implement the policies for reaching the targets, the private sector stakeholders could use that for predicting future opportunities. For example, all new buildings in the EU will be zero energy by 2021 and India will introduce ne w energy efficiency standards. Moreover, as the governments put forward the national climate plans, businesses and investors should be aware of changes if their value chains rely on agriculture, forestry, or land use. The Agreement highlights the importance of results-based payment methods, such as REDD+ (Reducing Emissions from Deforestation and Forest Degradation) for sustainable management of forests.

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European Commission. (n.d.-d). Paris Agreement. Retrieved from https://ec.europa.eu/clima/policies/international/negotiations/paris_en United Nations Framework Convention on Climate Change. (2015). Paris Agreement, 1–16. Wei, D., Cameron, E., Harris, S., Prattico, E., Scheerder, G., & Zhou, J. (2016). The Paris Agreement: What it Means for Business. We Mean Business. 307 308

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Furthermore, the Agreement conveys the signal to investors and businesses to unleash innovation in low carbon technologies, reduce energy consumption, shift investments from high carbon 309

assets, etc. It is worth mentioning that another success in Paris was the creation of Carbon Pricing Leadership Coalition and over 1000 companies have joined it.

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Youth and Civil Society Greta Thunberg, while not the first person to be a voice for youth on climate justice in the international arena, is certainly among the largest and most active voice for millennials and Generation Z on the issue today. The UN General Assembly and Climate Action Summit in September 2019 saw youth and indigenous voices being elevated, the tone increasingly desperate with the frustration of having the issue being highlighted continually over the years – with parties proclaiming a lack of significant action despite the repeated calls for urgency, as well as immediate issues such as the Amazon fires not being appropriately recognised.

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To further their point, 16 children (including Thunberg) from around the world filed an official complaint to the United Nations Committee on the Rights of the Child. The complaint names Brazil, France, Germany, Turkey, and Argentina in violating the UN Convention on the Rights of the Child. The countries named are all signatories of the Third Optional Prot ocol to the convention, allowing children to file complaints directly to the UN.

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Greta and her fellow youth’s impassioned speeches at the UN are the latest, arguably started by young Canadian environmentalist Severn Cullis-Suzuki and her powerful speech at the 1992 313

Earth Summit in Rio de Janeiro, Brazil. Another round of global strikes and protests in late 309

Wei, D., Cameron, E., Harris, S., Prattico, E., Scheerder, G., & Zhou, J. (2016). The Paris Agreement: What it Means for Business. We Mean Business. Grossman, C. (n.d.). We have an agreement in Paris: So, what’s next for the private sector? Retrieved from https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+and+events/news/wehave-agreement-paris-so-what-s-next-private-sector Kayla Epstein and Juliet Eilperin, ‘Greta Thunberg Tells U.N. Climate Summit to Take Action on Climate Change - The Washington Post’, Washington Post, 23 September 2019, https://www.washingtonpost.com/climateenvironment/2019/09/23/greta-thunberg-vows-that-if-un-doesnt-tackle-climate-change-we-will-never-forgive-you/; Jenni Monet, ‘Indigenous Representative Joins UN Climate Summit: “They Need Us”’, The Guardian, 26 September 2019, sec. World news, https://www.theguardian.com/world/2019/sep/26/tuntiak-katan-indigenousrepresentative-un-climate-summit. ‘16 Children, Including Greta Thunberg, File Landmark Complaint to the United Nations Committee on the Rights of the Child’, accessed 28 September 2019, https://www.unicef.org/press-releases/16-children-including-gretathunberg-file-landmark-complaint-united-nations. Tiffany Crawford, ‘Before Greta There Was Severn: The World Listened but Little Changed | Vancouver Sun’, Vancouver Sun, 26 September 2019, https://vancouversun.com/news/local-news/before-greta-there-was-severn-theb-c-girl-who-silenced-the-world. 310

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September 2019, led by youth, demonstrates that the private and public sector ought to be more wary of this large segment of society who are on the cusp of voting age in many democracies, if not already eligible.

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While many unfairly criticise the movement for hypocritical and unrealistic, it comes adjacent to many years of youth movements on topics like divestment from fossil fuels and develop ing infrastructure to create more environmentally friendly cities. It seems clear then, that to dismiss the role of youth and civil society in addressing climate change is to underestimate the contributions they can and do already make. Why Do Investors Matter in Climate Change? Business operations and supply chains are exposed to negative impacts of climate change, such as extreme weather events, droughts and floods, temperature variations, disease vectors, and sea315

level rise, and climate risks. Extreme weather conditions could lead to 45% loss in the global investment portfolios.

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There are both internal and external drivers for investors and companies to get involved. If private sector stakeholders are concerned with reducing costs, stimulating innovation, managing risks, increasing the quality of services/products, and increasing market share, it would be beneficial for them to invest in green technology and contribute to combating climate change. Moreover, there are external drivers such as consumers’ demands for “greener” products, government regulations, and competitive advantage of being the first or one of the first stakeholders to set the trend. 317

There are climate risks to businesses that are essential to note. Therefore, any forward-looking businesses focus on climate resilience.

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Allison Lampert, David Ljunggren, and Steve Scherer, ‘Climate Movement Now “too Loud to Handle” for Trump and Critics, Greta Thunberg Says’, Reuters, 27 September 2019, https://www.reuters.com/article/us-climate-changestrike-canada-idUSKBN1WC0E9. Wei, D., Cameron, E., Harris, S., Prattico, E., Scheerder, G., & Zhou, J. (2016). The Paris Agreement: What it Means for Business. We Mean Business. Grossman, C. (n.d.). We have an agreement in Paris: So, what’s next for the private sector? Retrieved from https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+and+events/news/we have-agreement-paris-so-what-s-next-private-sector Wei, D., Cameron, E., Harris, S., Prattico, E., Scheerder, G., & Zhou, J. (2016). The Paris Agreement: What it Means for Business. We Mean Business. 315

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1. Physical and Operational Risk from climate impacts such as extreme weather conditions to facilities, supplies, workforce, and manufacturing. 2. Input Risk because of deduced availability of raw materials and natural resources. 3. Market Risk as a result of changed market demand. 4. Financial Risk due to climate impacts. 5. Reputational Risk of failing to meet the expectations of key stakeholders. 6. Regulatory Risk because of increasing number of stringent climate policies.

It is worth mentioning that if commitments for limiting global warming are fulfilled, the energy transition will have vast financial implications. Investment opportunities that will arise from the 318

energy transition will outweigh climate-related risks in the long run. The cost of climate action 319

is falling while the cost of not taking an action is increasing. According to Wei et al ., businesses that took climate action have benefited from an average 27% internal rate of return on thei r low carbon investments. Technology experts and economists expect that deep decarbonization alongside with the use of advanced technologies would lower the costs of GHG mitigation options.

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According to Johnson, the report from Climate Strategies highlights that businesses

can profit from the international agreements on climate change and the EU’s trading scheme. Therefore, investors started to shift their investments to climate-friendly ones.

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As the climate change has become an alarming topic nowadays and the number of international agreements on climate change are increasing, the national governments and international organizations are eager to create favourable conditions for the private sector stakeholders. For instance, governments enable the private sector stakeholders to manage risks, shift towards low carbon technologies, and make strategic investment decisions through carbon pricing. Businesses that engaged with carbon pricing policies and established an internal carbon price have seen positive results on their climate and financial strategies. It is worth noting that businesses and investors should be aware that carbon pricing policies shape their markets. The Paris Agreement

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EY. (2016). Climate change. The investment perspective. Wei, D., Cameron, E., Harris, S., Prattico, E., Scheerder, G., & Zhou, J. (2016). The Paris Agreement: What it Means for Business. We Mean Business. Leggett, J. A. (2019). Potential Implications of U.S. Withdrawal from the Paris Agreement on Climate Change. Johnson, T. (2011). The Debate over Greenhouse Gas Cap-and-Trade. Retrieved from https://www.cfr.org/backgrounder/debate-over-greenhouse-gas-cap-and-trade Grossman, C. (n.d.). We have an agreement in Paris: So, what’s next for the private sector? Retrieved from https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+and+events/news/we have-agreement-paris-so-what-s-next-private-sector 319

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also tries to link and integrate carbon markets and modern frameworks that will lead to increased GHG reduction options for businesses, reduced competitive distortions, enhanced carbon price 323

stability, and strengthened political collaboration. The private sector stakeholders understand that carbon pricing is a cost-effective way to meet their corporate climate targets. Microsoft has used carbon pricing and used the revenues from its business units for investing in carbon offsetting measures.

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The World Bank Group, especially IFC, will double its climate investments because of the commitment to increase climate-related investments up to 28% by 2020. The investment could be implemented through direct investments in renewable energy, water efficiency and the like, and/or development of aggregation and de-risking mechanisms, and/or capacity and knowledge building.

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Engaging Investors – Some Ways Forward

Corporate Social Responsibility (CSR)/Created Shared Value (CSV ) Corporate social responsibility that has been transformed today from the notion that used to be in the past, Porter and Kramer’s “shared value,” and Ian Davis’s “social contract” share the same idea. Integrating external engagement into strategies and operations is an essential determinant 326

of competitiveness and success. Therefore, the role of corporate actors is increasing in shaping community and individual experiences. Socially responsible investing efforts encompass environmental, economic, and social responsibilities.

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Corporate sustainability communication (CSC) became popular as a result of public relations efforts of organizations’ environmental communication programs and corporate social reports

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Wei, D., Cameron, E., Harris, S., Prattico, E., Scheerder, G., & Zhou, J. (2016). The Paris Agreement: What it Means for Business. We Mean Business. Wei, D., Cameron, E., Harris, S., Prattico, E., Scheerder, G., & Zhou, J. (2016). The Paris Agreement: What it Means for Business. We Mean Business. Grossman, C. (n.d.). We have an agreement in Paris: So, what’s next for the private sector? Retrieved from https://www.ifc.org/wps/wcm/connect/news_ext_content/ifc_external_corporate_site/news+and+events/news/we have-agreement-paris-so-what-s-next-private-sector Browne, J., & Nuttall, R. (2013). Beyond corporate social responsibility: Integrated external engagement. Retrieved from https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/beyondcorporate-social-responsibility-integrated-external-engagement Allen, M. W., & Craig, C. A. (2016). Rethinking corporate social responsibility in the age of climate change: a communication perspective. International Journal of Corporate Social Responsibility, 1(1), 1. https://doi.org/10.1186/s40991-016-0002-8 324

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when organizations in oil, chemical, and other industries faced environmental scandals. Thus, companies started to redefine their CSR and CSV policies to prioritise the environmental, which is beneficial for their PR efforts, the planet, and public awareness.

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If “Responsible Corporate Adaptation” is done properly, then the process can bring benefits to companies such as avoiding costs, expanding market shares, accessing new financing streams, etc. as the ability to prosper cannot be detached from community well-being.

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Impact Investing Impact investments are essential in addressing climate change that requires massive flows of capital. Impact investing seeks to create alternative models for financing and promoting innovation to meet environmental and social objectives. Investment firms are shifting assets to more responsible investment approaches, which means that more money is invested in sustainable business practices and less in environmentally destructive initiatives. In a nutshell, impact investments seek an environmental and/or social impact alongside the financial return by focusing on companies that produce renewable energy, manage forests in a sustainable way, and 331

develop green technologies for example. It is worth mentioning that improved land use, e.g. restoration of degraded and deforested land, could lead to greater CO2 reductions.

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It is essential to highlight the importance of investments in start-ups and social enterprises that improve land use, develop green technologies, apply innovative business models to combat climate degradation, and substitute meat products with plant-based ones. For example, animal agriculture plays a major role in deforestation and greenhouse gas emissions. It is responsible for

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Allen, M. W., & Craig, C. A. (2016). Rethinking corporate social responsibility in the age of climate change: a communication perspective. International Journal of Corporate Social Responsibility, 1(1), 1. https://doi.org/10.1186/s40991-016-0002-8 Dans, E. (2018). Corporate Social Responsibility Is Turning Green, And That’s A Good Thing. Retrieved from https://www.forbes.com/sites/enriquedans/2018/09/14/corporate-social-responsibility-is-turning-green-and-thats-agood-thing/#58dedb204dca United Nations Global Compact. (2015). COP21: An Unstoppable Momentum. Retrieved from https://www.unglobalcompact.org/take-action/action/cop21-business-action Bouri, A. (2019). Capital for climate: The role of finance in saving our Earth. Retrieved from https://www.investmenteurope.net/opinion/4002094/capital-climate-role-finance-saving-earth Hsu, A., & Weinfurter, A. (2018). All Climate Politics Is Local. Retrieved from https://www.foreignaffairs.com/articles/united-states/2018-09-24/all-climate-politics-local 329

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18 percent of GHG emissions that is more than the combined exhaust from all transportation. Also, livestock and their by-products account for 51% of all GHG emissions.

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Public-Private Partnerships (PPPs) According to the World Bank, “PPP is a long-term contract between a private party and a government entity, for providing a public asset or service, in which the private party bears significant risk and management responsibility, and remuneration is linked to performance.” PPPs are considered as a cost-efficient option to enhance innovation and/or clean investments.

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Combining private market participation, public financing, and regulation into PPP is essential for mobilising the private sector for sustainable development. The PPPs could take forms such as market price corrections, global fund mechanisms, private provision on public contract, technology consortia, etc.

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PPPs could incentivise both the public and private sectors to

overcome the budgetary gaps for public sector. There are a number of examples of successful 338

PPPs. For example, according to Marin, the overall performance of water PPP projects has been satisfactory and has brought improvements.

Blended Finance Blended finance, a strategic use of development finance towards sustainable development, can assist in bridging the investment gap for delivering the Paris Agreement and the 2030 Agenda. It attracts commercial capital for projects that are beneficial for the society while providi ng financial returns to investors.

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Food and Agriculture Organization of the United Nations. (2006). Livestock’s long shadow: Environmental issues and options. Goodland, R., & Anhang, J. (2009). Livestock and Climate Change. What if the key actors in climate change were pigs, chickens and cows? Worldwatch Institute, 10–19. World Bank Group. (n.d.). What are Public Private Partnerships? Retrieved from https://ppp.worldbank.org/public-private-partnership/overview/what-are-public-private-partnerships Buso, M., & Stenger, A. (2018). Public-private partnerships as a policy response to climate change. Energy Policy, 119(July 2017), 487–494. https://doi.org/10.1016/j.enpol.2018.04.063 Sachs, J. D., & Schmidt-traub, G. (2015). Financing Sustainable Development : Implementing the SDGs through Effective Investment Strategies and Partnerships, 1–143. Marin, P. (2009). Public-Private Partnerships for Urban Water Utilities. OECD. (n.d.). OECD DAC Blended Finance Principles: Unlocking Commercial Finance for the Sustainable Development Goals. Retrieved from http://www.oecd.org/dac/financing-sustainable-development/blended-financeprinciples/ 334

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Conclusion In summary, there are several debates at play in international climate politics. Ideological debates ultimately threaten progress in combating climate change since they draw time and resources towards a repetitive conversation instead of towards action. More technical debates on mechanisms and the role of the private sector are relevant but ought not to prevent some immediate action from being taken, measured, and improved upon. Furthermore, developing states have the right to develop and raise people out of poverty, but require support to do so sustainably. Considering the interdependence of the global system currently, burdens do not fall on individual states. However, the cycles of geopolitics, rising nationalism, and conflict especially all mean that cooperation between states grows more difficult, and states are perhaps required to act individually to fight climate change. Greater leadership demonstrated by states would help to propel the movement forward and instil confidence in investment. LEGAL UNDERPINNINGS The Politics of Climate Change The Paris Agreement came out of a longstanding political stalemate within the climate change regime marked by the withdrawal of the United States from the Kyoto Protocol, with other states such as Australia, Canada, Japan, and Russia all subsequently moving away from their obligations under the treaty.

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A key obstacle within climate change negotiations was the concept of differentiation as embodied in the principle of common but differentiated responsibilities, with states unable to agree as to whom should take the lead in dealing with climate change. At the outset, the UNFCCC articulated obligations for its parties based on their level of development, with develo ped countries obliged to take the lead in global efforts by limiting their emissions. However, the asymmetry in obligations would come to the fore as developing countries such as India and China began to industrialise rapidly. Developed countries thus insisted that any reference to common but differentiated responsibilities be qualified with a statement that the principle is to be 341

interpreted in the light of contemporary economic realities. On the other side of the table,

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Daniel Klein et al., eds., The Paris Agreement on Climate Change: Analysis and Commentary, First edition (Oxford New York, NY: Oxford University Press, 2017) 19. Daniel Bodansky, Jutta Brunnée, and Lavanya Rajamani, International Climate Change Law, First edition (Oxford New York, NY: Oxford University Press, 2017) 221. 341

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developing countries refused to take on a greater burden in tackling climate change on the basis that the historical responsibility for emissions was deemed to lie within industrialised countries whose development had been achieved in part through the reliance on fossil fuels.

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Several factors in the period between the Kyoto Protocol and COP 21 facilitated the ascension of the Paris Agreement. Notably, the narrative around climate change had begun to shift, with states, corporations and individuals beginning to view it as an opportunity as opposed to a burden. Tackling climate change was seen as a means to further technological innovation and boost economic growth.

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This change in narrative precipitated an increased flexibility in state attitudes towards climate negotiations, with states such as the United States under Barack Obama and China taking a more facilitative role as seen in a bilateral climate agreement made in 2015.

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Importantly, the focus

on common but differentiated responsibility was downplayed in the Paris Agreement with a qualifier ‘in light of different national circumstances’. This qualifier in the preambular recital of the Paris Agreement was critical in the widespread support of the Paris Agreement, as the careful language created an expectation that the agreement would reflect the principle of common but differentiated responsibility but stopped short of prescribing it into the implementation of the agreement.

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Additionally, a shift in capital was one of the biggest impetuses behind the shift in politics. In the lead up to the Paris Agreement, over 400 investors representing more than US$24 trillion in 346

assets made commitments to increase low carbon and climate resilient investments. In addition, developing countries’ investment in renewable energy, excluding large hydropower projects, surpassed that made by developed countries.

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This market signal together with the growing

strength of the non-state actor climate movement gave governments the mandate to take effective steps in combating climate change. 342

Klein et al., The Paris Agreement on Climate Change 19. ibid. 22 The White House, ‘U.S.–China Joint Announcement on Climate Change’ The White House (12 November 2014) https://obamawhitehouse.archives.gov/the-press-office/2014/11/11/us-china-joint-announcement-climatechange (last accessed 17 July 2019). Bodansky, Brunnée, and Rajamani, International Climate Change Law. 222 Bloomberg New Energy Finance, ‘Global Trends in Renewable Energy Investment 2016’ (Frankfurt School of Finance & Management 2016) http://about.bnef.com/press-releases/clean-energy-defies-fossil-fuel-price-crash-toattract-record-329bn-global-investment-in-2015/ (last accessed 17 July 2019) Klein et al., The Paris Agreement on Climate Change. 24 343 344

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The recognition of the urgency of climate action is reflected in the resiliency of the Paris Agreement. This Paris Agreement was put to the test in 2017 when the USA announced its 348

decision to withdraw from the agreement. This decision was met with widespread disapproval 349

across the globe. Furthermore, it spurred other states to step up and reaffirm their commitment to tackling climate change; an example being the EU and China promising to strengthen the deal in light of the USA’s withdrawal.

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Going further, sub-national actors such as cities, regions and federal states have heeded the call to step up their climate action. For example, in the USA, despite the federal government’s withdrawal from the Paris Agreement, many individual states have expressed their continued commitment to the obligations and aims of Paris. This is most evident in the emergence of the United States’ Climate Alliance and the Climate Mayors. The US Climate Alliance is a bipartisan coalition of states committed to the goal of reducing greenhouse gas emissions consistent with the goals of the Paris Agreement, and was formed in response to the federal government’s decision to withdraw from Paris.

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The Climate Mayors, also known as the Mayors National Climate Action Agenda, is an association of the United States mayors formed before the Paris Agreement, but founded with the aim of reducing greenhouse gas emissions. The Climate Mayors consist of 392 US Mayors representing 69 million Americans. Following the federal government’s decision to withdraw from Paris, the Climate Mayors issued a statement committing to adopt, honour and uphold the 1.5°C - 2°C goal within the Paris Agreement.

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The Paris Agreement is a key milestone setting out global ambition in tackling climate change. It found a middle ground between developed and developing countries and draws up a road map 348

‘UN Officially Notified of US Intention to Withdraw from Paris Climate Pact’ (UN News, 4 August 2017) <https://www.un.org/apps/news/story.asp?NewsID=57314#.WnXLy5OFiRs> A full list of statements made in response to the USA’s withdrawal can be found o n <https://www.carbonbrief.org/global-reaction-trump-pulls-us-out-paris-agreement-climate-change> G20, ‘G20 Leaders’ Declaration: Shaping an Interconnected World’ (G20 Germany 2017). The Guardian, ‘China and EU strengthen promise to Paris deal with US poised to step away’ <https://www.theguardian.com/environment/2017/may/31/china-eu-climate-lead-paris-agreement> accessed 17 July 2019. United States Climate Alliance, ‘States United for Climate Action’ <https://www.usclimatealliance.org/> accessed 18 July 2019. Climate Mayors, ‘402 US Climate Mayors commit to adopt, honor and uphold Paris Climate Agreement goals’ (originally released 1 June 2017, updated 22 March 2018) <http://climatemayors.org/actions/paris-climateagreement/> accessed 18 July 2019. 349

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towards limiting the increase of global temperatures. While the effectiveness of this statement of positive intent has yet to be shown, the Paris Agreement is undeniably a significant step forward. The Legal Implications of the Paris Agreement The Paris Agreement consists of a mix of hard, soft and non-obligations, it is thus necessary for parties to the agreement as well as various stakeholders to understand the legal normativity of its 353

various components. Broadly speaking, the core obligations as to mitigation and adaptation as set out in Article 4 and Article 7 of the agreement do not impose hard obligations as to what state 354

parties have to achieve within the two respective fields. Rather, the Paris Agreement imposes obligations of conduct as to transparency and reporting.

The focus on transparency and reporting forms the basis of the agreements’ hybrid structure that comprises a combination of ‘top-down’ and ‘bottom-up’ elements; the former consisting of managerial, transparency and norm-building elements, and the latter consisting of the global stocktake and the setting of non-binding long term goals.

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This combination of ‘top-down’ and ‘bottom-up’ elements is best characterised through the Nationally Determined Contributions (NDCs) component of the Paris Agreement. NDCs are national climate action plans dealing with issues such as mitigation and adaptation that are submitted to the secretariat by individual party states.

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There is no formal obligation as to the

content of the individual NDC, the individual contributions are not negotiated, and neither is 357

compliance with them binding. The Paris Agreement only imposes obligations of conduct to 358

‘prepare, communicate and maintain’ successive NDCs. Accordingly, the NDCs that have been submitted have been formulated in a wide variety of ways. Some are quantitative, and others are 359

qualitative; some are conditional while others are unconditional. Article 4 merely establishes a

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Lavanya Rajamani, ‘The 2015 Paris Agreement: Interplay Between Hard, Soft and Non- Obligations’ (2016) 28 JEL 337, 337. Paris Agreement art 4 and art 7 Meinhard Doelle, ‘Assessment of Strengths and Weaknesses’ in Daniel Klein et al., eds., The Paris Agreement on Climate Change: Analysis and Commentary, First edition (Oxford New York, NY: Oxford University Press, 2017) 387. Paris Agreement art 4. Jürgen Friedrich, ‘Global Stocktake (Article 14)’ in The Paris Agreement on Climate Change: Analysis and Commentary, First edition (Oxford New York, NY: Oxford University Press, 2017) 319. Paris Agreement art 4. UNFCCC, ‘Interim NDC Registry’ <https://www4.unfccc.int/sites/ndcstaging/Pages/Home.aspx> 354 355

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good faith expectation that parties attempt to achieve their contributions but stops short of actually requiring them to do so.

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Whilst the Paris Agreement might not require parties to achieve their NDCs, under Article 13.7(b), parties are required to regularly provide progress made in “implementing and achieving” its NDC. This reporting requirement further buttresses the consensual and cooperative framework of the Paris Agreement, and gives parties a clearer sense of what is required in order to meet the goals of the agreement. Furthermore, the Paris Agreement does impose a requirement that state parties ratchet up the ambition of their NDCs at regular intervals through the global stocktake that is set to take place every five years, with the first stocktake scheduled for 2023.

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Nevertheless, it should be noted

that the global stocktake focuses on the collective progress of the agreement and would not laser in on an individual party.

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The purpose of the stocktake being to enhance international

cooperation for climate change, and to inform state parties as to how they might choose to update and enhance their individual national action plans.

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The Paris Agreement has not established any binding legal obligations on state parties to achieve the 1.5/2°C goal set out in Article 2 nor any specific quantitative requirements as to mitigation and adaptation. Nevertheless, this was never the aim of the Paris Agreement. Rather, the Paris Agreement relies on a cooperative framework based on transparent reporting, nationally determined commitments, political momentum, and a common long-term goal. The importance of cooperation being firmly underscored in the elucidation of the Paris implementation framework set out in the Paris ‘Rulebook’ discussed below.

Facilitating Compliance with the Paris Agreement – the Paris ‘Rulebook’

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Rajamani 354. Paris Agreement art 4.9, art 14. Decision 19/CMA.1, ‘Matters relating to article 14 of the Paris Agreement and paragraphs 99-101 of decision 1/CP.21’, FCCC/PA/CMA/2019/3/Add.2. ibid. 361 362

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Following the adoption of the Paris Agreement in 2015, the next step was to reach an agreement as to the implementation of the agreement. This would be set out at COP 24 in Katowice, Poland through the adoption of the Paris ‘Rulebook’, a set of guidelines that sets out the essential 364

procedures and mechanisms necessary to make the Paris Agreement operational. The Paris Rulebook reaffirms the importance placed on transparency and accountability within the Paris Agreement, with transparent reporting being the crux of the implementation of the agreement. To facilitate the implementation of the Paris Agreement, as well as compliance with its relevant provisions, the parties to the agreement established an elected committee charged with this specific task as set out in Article 15 of the Paris Agreement and Paragraphs 102 and 103 of decision 1/CP.21. The structure of the committee consists of 12 members with recognised competence in their relevant fields who would be elected by the Conference of the Parties on the basis of equitable geographical representation, with 2 members each from the five regional groups of the United Nations, and 1 member from the small island developing states and the least developed countries.

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The role of the committee is, however, non-punitive and non-adversarial. Its mandate to initiate 366

a ‘consideration of issues’ is restricted to issues related to reporting and communication. For example, where the party fails to communicate or maintain a nationally determined contribution 367

as required under Article 4 of the Paris Agreement. This focus on transparency and reporting is further underlined by the actions available to the committee in the ‘consideration of issues’, which consists of measures such as the making of recommendations or provision of assistance.

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The facilitative nature of the compliance mechanism thus leads back to the basis of the Paris Agreement as an international agreement founded in political pressure and international cooperation as opposed to one based on hard binding legal obligations.

The Rise of Climate Change Litigation

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‘The Katowice climate package: Making the Paris Agreement Work For All’ <https://unfccc.int/process -andmeetings/the-paris-agreement/katowice-climate-package#eq-9> accessed 16 May 2019. Decision 20/CMA.1, ‘Modalities and procedures for the effective operation of the committee to facilitate implementation and promote compliance referred to in Article 15, paragraph 2, of the Paris Agreement’, Annex I – II. ibid Annex III.22. ibid. ibid Annex IV.30. 365

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Following the ratification of the Paris Agreement, there has been a sharp increase in climate 369

change litigation cases around the world. Courts have increasingly become a forum through which individuals and social movements have sought to challenge existing policies and change 370

social norms and values. Notably, the rise of climate change litigation reframes questions as to the binding nature of international agreements into a question as to whether certain activities that cause dangerous climate change as defined in the agreement violates the rights of individuals.

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This, in effect, adds a further layer to the legal framework that reinforces the non-binding Paris Agreement. Moreover, the rise of climate change litigation has not been confined to the public sphere, with cases being brought against businesses and corporations in a bid to hold them accountable to communities for associated climate change damages. This section will look at several examples of climate change litigation against both state and private actors and expound upon the implications of this trend on the legal backdrop of climate change and its impact on various stakeholders.

Litigation against State Actors The Paris Agreement provides litigants with a crucial legal predicate with which they can push governments and corporations to close the gap between existing current policy, and policy 372

required to achieve effective mitigation and adaptation. Litigants are now able to argue that a government’s politically easy statements about rights and objectives must be supported by politically difficult concrete measures.

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This was best exemplified in the landmark case of

Urgenda Foundation v The State of the Netherlands, which would go on to inspire a new wave of cases. In Urgenda, the Dutch Court ruled that the Dutch State was under a duty of care to prevent ‘hazardous climate change’ as defined in the Paris Agreement, and that this duty of care derived 374

from the state’s discretionary power in determining climate policy. Accordingly, the court ruled that the Dutch emissions reduction target in its INDC to the Paris Agreement was below the standard deemed necessary by climate science and international policy, ordering the Dutch 369

http://climatecasechart.com/ Benjamin Franta, “Litigation in the Fossil Fuel Divestment Movement: Litigation in the Fossil Fuel Divestment Movement,” Law & Policy 39, no. 4 (October 2017): 393–411, https://doi.org/10.1111/lapo.12086. 394. Franta. (n 19). United Nations Environment Programme and Sabin Center for Climate Change Law, Status of Climate Change Litigation, a Global Review, 2017, http://wedocs.unep.org/handle/20.500.11822/20767 8. ibid. Urgenda, [4.36 - 4.38], [4.43], [4.65]. 370

371 372

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government to adopt more stringent greenhouse gas emissions reduction measures. The Dutch Court effectively transformed the states soft law obligations on the international place into hard law obligations within the domestic realm. A further example would be Ashgar Leghari v Federation of Pakistan where the Lahore High Court ruled that the Pakistani government had violated the fundamental rights of citizens for failing to implement its National Climate Change Policy and the accompanying Framework of Climate Change Policy. Ashgar Leghari is especially important as it reflects a growing receptivity 376

of courts to the reframing of climate change lawsuits within the context of human rights. With the effects of climate change being felt more directly and substantially, the connection between climate change and rights protection will grow more significant, instigating further litigation across the world.

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More recently, in the ongoing case of Juliana v United States, litigants used a combination of public trust arguments and human rights to argue that the federal government had violated their substantive rights to life, liberty and property through climate change.

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Although the merits of

the case have yet to be ruled on, an opinion and order issued on 10 November 2016 rejected the motions of the US government to dismiss the action. This preliminary decision confirmed that the litigants have a justiciable case and standing to pursue their case. It was further considered that there was a new developing fundamental right – ‘the right to a climate system capable of sustaining human life’.

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The aforementioned cases are but a sample of the surge in climate change litigation. However, they are significant in paving the way for further litigation. Significantly, the reframing of climate change as a human rights issue as in the cases of Ashgar Leghari and Juliana is a marked shift in the discourse, with the large bulk of climate change lawsuits having traditionally been brought on 380

the bases of statutory law causes of action against the decision-making processes. Even if cases

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Urgenda [4.31]. (2015) WP No 25501/2015. [3], [6 - 8]. Jacqueline Peel and Hari M. Osofsky, “A Rights Turn in Climate Change Litigation?,” Transnational Environmental Law 7, no. 1 (March 2018): 37–67, https://doi.org/10.1017/S2047102517000292. 40. Juliana v. United States, No. 6:15-cv-01517, (D.Or., 10 Nov. 2016) (Aiken, J.), 46 ELR 20175 (Juliana). Juliana, 32. ibid. 39. 376 377

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such as Juliana lose in court, they would still have important ripple effects in shaping public dialogue, business attitudes and government action.

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Litigation Against Private Actors This trend is not restricted to state actors as indicated in two recent cases brought in Germany and Poland where litigation was brought against private parties based on climate change and its associated damages.

In the ongoing German case of Lliuya v RWE AG, a Peruvian farmer filed claims for a declaratory judgment and damages in a German court against RWE, Germany’s largest electricity producer.

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The suit alleges that RWE, having knowingly contributed to climate change by

emitting substantial volumes of greenhouse gases, bears some measure of responsibility for the melting of mountain glaciers near Liuya’s town of Huaraz. This has increased the threat of flooding due to the volumetric increase in size of a nearby glacial lake. The suit is seeking reimbursement for a portion of the costs incurred to establish the necessary flood protections. Lliuya acknowledges that RWE is only partially responsible for global emissions that contribute to climate change, and thus only partially responsible for the lake’s growth. Therefore, Lliuya only claimed for 0.47% of the total cost – the same percentage as Lliuya’s estimate of RWE’s annual contribution to global greenhouse gas emissions.

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The case was dismissed by the lower courts but recognised as admissible by the appeals court.

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The case is now in the evidentiary phase. While the facts of the case are still to be adjudicated, the court’s recognition that a private company could potentially be held liable for damages arising from climate change is unprecedented and could potentially inspire similar actions with litigators across different jurisdictions often drawing inspiration from each other.

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Peel and Osofsky, “A Rights Turn in Climate Change Litigation?” 67. Lliuya v RWE AG, Case No. 2 O 285/15 (Lliuya). “Lliuya, Order to parties to submit evidence (unofficial English translation)” accessed April 5, 2019, http://blogs2.law.columbia.edu/climate-change-litigation/wp-content/uploads/sites/16/non-us-casedocuments/2017/20171211_Case-No.-2-O-28515-Essen-Regional-Court_order-1.pdf. ibid. Peel and Osofsky, “A Rights Turn in Climate Change Litigation?” 61. 382 383

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Another growing area of climate change litigation is that of shareholder activism, with 386

shareholders and investors becoming more involved in climate action. It is now the case that shareholders and investors are trying to take large-scale systemic risks, such as climate change, 387

into their risk management decision-making process. This is especially so in light of recent reports addressing the potential ‘carbon bubble’ caused by fossil fuel assets that will be significantly overvalued following the transition to cleaner forms of energy thereby resulting in stranded energy assets.

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If the ‘carbon bubble’ were to occur, it is estimated that 40-60% of

shared market value could be wiped out, affecting companies and investors worldwide.

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An example is the ongoing Polish case ClientEarth v Enea SA, where ClientEarth, a minority shareholder in the Polish energy company, Enea, filed a challenge against the company’s decision 390

to pursue the construction of a new coal power plant. The Court action alleges a breach of fiduciary duty on the basis of entering the project despite the significant financial risks arising from rising carbon prices, increased competition from cheaper renewables and the impact of EU energy reforms on state subsidies for coal power.

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Although the two aforementioned cases are still pending in courts, their impact goes beyond the actual legal decision. Litigation risks interact very closely with other forms of climate business risk such as insurance risks, reputational risks and the risk of a disruption of usual business activities. The reputation of a corporation with shareholders, investors and consumers may be undermined by a perception that it is failing to meet its obligations, legal or otherwise, in relation to climate change.

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Furthermore, the threat of litigation and its accompanying reputational

damage may provide an added incentive for corporate actors, even those not specifically targeted by the litigation in question, to adopt more climate-friendly practices.

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Jacqueline Peel and Hari M. Osofsky, Climate Change Litigation: Regulatory Pathways to Cleaner Energy, Cambridge Studies in International and Comparative Law 116 (Cambridge: Cambridge Univ. Press, 2015). 184 Peel and Osofsky 210. Peel and Osofsky 210.; Carbon Tracker Initiative and LSE Grantham Research Institute on Climate Change and the Environment, Unburnable Carbon 2013: Wasted Capital and Stranded Assets (2013, Carbon Tracker Initiative, London). ibid. Carbon Tracker Initiative and LSE Grantham Research Institute, Unburnable Carbon 2013: Wasted Capital and Stranded Assets. “Legal Briefing from Plaintiffs,” accessed April 5, 2019, http://blogs2.law.columbia.edu/climate-changelitigation/wp-content/uploads/sites/16/non-us-case-documents/2018/20180920_Not-Available_na.pdf. ibid. 387 388

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Peel and Osofsky, Climate Change Litigation 184. ibid.

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Soft Law with Hard Consequences The overarching international agreement governing climate change, the Paris Agreement, does not impose any hard, binding obligations on state parties to make any specific efforts to mitigate greenhouse gas emissions nor to facilitate adaptation to a changing world. Nevertheless, the advent of the Paris Agreement has given individuals and communities an internationally accepted 394

basis from which they can hold governments and corporations to account. This can be seen in the surge of climate change litigation, against both public and private parties, that all cite the Paris 395

Agreement and its preceding IPCC report in establishing the obligations of the defendants. The threat of environmental litigation, in addition to making hard binding obligations as in the case of Urgenda, has become a Sword of Damocles urging corporations to shift towards a greener agenda in a bid to avoid the business risks that accompany such litigation. Going forward, as the impact of climate change is more saliently felt and public awaren ess of pathways to enforcement grows, climate change litigation will continue to play a significant role in the shaping of climate policy worldwide. Furthermore, the pattern of climate change litigation pursuing a diverse range of legal theories, from rights-based arguments to shareholder activism, is likely to continue as litigants consider new ways to prompt further climate action by governments.

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The Human Rights Element Beyond litigation risk, a further implication of the rise in climate change litigation, particularly rights-based litigation, on corporations and investors is the increasing recognition of the nexus between climate change and human rights as mentioned in the aforementioned cases of Ashgar

Leghari and Juliana. Although the implications of climate change for the enjoyment of human rights are increasingly obvious, there remains the obstacle of whether climate change causes an 397

actionable rights violation. This arises for several reasons, most salient being the difficulties in establishing a causal link between greenhouse gas emissions and climate change, the specific attribution of human rights violations, and the extraterritorial element with the act of pollu tion 398

and the direct effects of climate change occurring in different parts of the world. This was the

394 395 396

397 398

United Nations Environment Programme and Sabin Center for Climate Change Law (n20) 8. ibid. Peel and Osofsky, Climate Change Litigation. 329.

Peel and Osofsky, “A Rights Turn in Climate Change Litigation?” 46 Peel and Osofsky. 46; OHCHR Report para 70

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case in the petition made in 2005 by the Inuit Circumpolar Conference in a case before the InterAmerican Commission on Human Rights where the Inuit indigenous people of the USA and Canada sought to frame a claim for redress for climate change harm in human rights terms.

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The Inter-American Commission refused to consider the case, holding that the information provided did not enable the determination of whether the alleged facts could be characterized as a violation of rights protected by the American Declaration.

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However, following the formal failure of that case, the UN Human Rights Council took up the issue in 2008. In Council Resolution 7/23, it noted that ‘climate change poses an immediate and far-reaching threat to people and communities around the world and has implications for the full 401

enjoyment of human rights’. This would be further supported by a study released in January 2009 by the Office of the UN High Commissioner for Human Rights on the relationship between Climate Change and Human Rights, which recognised the significant linkages between climate change and the realization of basic human rights such as the rights to life, health, food, water, and adequate housing.

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Although the Paris Agreement failed to make any mention of human rights in any of its operative provisions, the momentum for the formal recognition of the human rights implications of climate change is growing.

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Issues that had previously been raised only by activists and advisory

committees are now entering the courtrooms and human rights tribunals of the world. The Commission on Human Rights of the Philippines concluded the world’s first national inquiry into the human rights impacts of climate change on 13 December 2018. In a series of public hearings held in Manila, New York, and London, the commission sought t o ascertain whether the human rights of the Filipino people had been and are being adversely impacted by climate change, with the top 47 fossil fuel producers of the world having contributed to this 399

Inuit Petition Inter-American Commission on Human Rights to Oppose Climate Change Caused by the United States of America (7 December 2005) <https://www.inuitcircumpolar.com/pressreleases/inuit-petition-inter-american-commission-on-human-rights-to-oppose-climate-change-caused-bythe-united-states-of-america/> 400 EJOLT, ‘Climate change responsibilities in polar peoples: the Inuit Case’ <http://www.ejolt.org/wordpress/wp-content/uploads/2015/08/FS-44.pdf> 401 Peel and Osofsky, “A Rights Turn in Climate Change Litigation?” 42 402 OHCHR, Report of the Office of the United Nations High Commissioner for Human Rights on the Relationship between Climate Change and Human Rights, UN Doc. A/HRC/10/61, 15 January 2009 403 Bodansky, Brunnée, and Rajamani, International Climate Change Law . 227; Peel and Osofsky, “A Rights Turn in Climate Change Litigation?” 45 The Wilberforce Society Cambridge, UK

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phenomenon. The final report of the commission is yet to be released at the time of writing. However, the report could set a global precedent if it links the human rights impact of climate change in the Philippines to the actions of fossil fuel companies. The increasingly central role of human rights within the climate change discourse is further illustrated by the petition filed by the Torres Strait Islanders against the Australian government 405

in the Human Rights Committee of the United Nations on 13 May 2019. The petitioners allege that Australia’s insufficient plans to reduce greenhouse gas emissions and its failure to fund 406

coastal defenses constitute a violation of their human rights; specifically the right to culture, the 407

right to be free from arbitrary interference with privacy, family and home, and the right to life.

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Notwithstanding the actual conclusions of both reports, their sheer breadth and ambition will only embolden more parties and institutions to continue to push the boundaries of human rights within the sphere of climate change. The role that investors can play in tackling climate change and the upholding of human rights is best seen in the growing clout of the fossil fuel divestment movement, a movement that has been 410

described as the fastest-growing disinvestment movement in history. Despite the lack of formal legal conclusions, there is a growing consensus implicating investments in industries that significantly contribute to climate change in the violation of human rights. In a 2017 survey of institutional investors, it was found that about one-quarter had made significant changes to their 411

portfolios to divest from fossil fuels. Corporations have been put on notice.

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Philippines Commission on Human Rights Press Release Torres Strait Climate Justice Case 'Call on the PM to Protect Torres Strait Islanders on the Climate Frontline!' <http://ourislandsourhome.com.au> , accessed 20 June 2019,. 406 International Covenant on Civil and Political Rights (ICCPR) art 27 407 ICCPR art 17 408 ICCPR art 6 409 “Human Rights and Climate Change: World-First Case to Protect Indigenous Australians,” ClientEarth (blog), May 12, 2019, https://www.clientearth.org/human-rights-and-climate-change-world-first-case-toprotect-indigenous-australians/. 410 Franta, “Litigation in the Fossil Fuel Divestment Movement.” 393 411 Karen DeMasters, “Knowledge Needed To Divest Of Fossil Fuels,” accessed June 20, 2019, https://www.fa-mag.com/news/knowledge-needed-to-divest-of-fossil-fuels-32943.html. 405

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Drawing from the human rights discourse and the various litigation cases brought against states and private parties, the relationship between climate change, human rights, and the rights of future generations is evident. In this vein, investments into industries and technologies that work towards the mitigation of carbon emissions and the adaptation to a post-climate change world are investments that serve to affirm the rights of vulnerable communities, and ensure the continued enjoyment of fundamental rights of future generations. Investment that Works for Everyone – The Just Transition The economic transformation required to respond to climate change stands out because of the urgency to make progress and also the disruptive changes that would arise through the necessary 412

rapid technological change. A deployment of new low-carbon technologies without time to fully 413

consider their impacts would lead to the disenfranchisement of workers and communities. The importance of recognizing the socio-economic costs of decarbonisation policies would be acknowledged in the preamble to the Paris Agreement, where parties to the agreement took into account the ‘imperatives of a just transition of the workforce and the creation of decent work and quality jobs’.

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The Importance of the Just Transition The Just Transition is an opportunity to pursue a more equitable global economy; it recognises the trade-offs between the competing needs that exist within the global economic framework and seeks to address these in an equitable manner.

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Further to the importance of justice and equity concerns within the context of global decarbonisation and climate change, a just transition is critical for the sustained progression to a green economy. The potential and perceived socio-economic costs of decarbonisation could significantly hinder support for these policies from individuals and communities who are adversely affected.

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Without strong policies to support displaced communities, these

communities would resist rapid decarbonisation thereby potentially derailing the entire process. 412

Nick Robins, Vanda Brunsting and David Wood, ‘Climate change and the just transition: a guide for investor action’ (Grantham Research institute on Climate Change and the Environment 2018) 10. Ibid 6. Paris Agreement Preambular Paragraph 16. Newell and Mulvaney (2013); UNFCCC, ‘Just Transition of the Workforce and the Creation of Decent Work and Quality Jobs’ (2016) <https://unfccc.int/sites/default/files/resource/Just%20transition.pdf> accessed 13 April 2019 21. Healy and Barry (2017), 451 413 414 415

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It is postulated that a transition of the magnitude required to effectively combat climate change, implemented without taking into account the concepts of justice and equity, could face a backlash akin to the recent populist movements against globalisation in many countries around the world.

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Some notable examples being the rise of Donald Trump in the United States of

America, the Brexit vote in the United Kingdom, and the rise of populists in Europe. Populist Parties in The EU Elections

The impact of decarbonisation on jobs and communities is especially conspicuous in the global shift away from coal, where more often than not, the transition was poorly managed with no 418

proper reskilling or development of alternative economic opportunities. This was the case in The Valleys in the United Kingdom, where coal mining was the once core of local industry.

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The region is now faced with entrenched high unemployment, poverty, and net worker 420

outmigration. This is the result of a coal transition that lacked an overarching policy framework and was exacerbated by insufficient efforts to reskill workers and create new jobs.

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On the other side of the Atlantic, the Appalachian mountain region faces similar issues. Appalachia runs north to south through thirteen eastern states of the USA. Many areas of Appalachia were heavily dependent on low-wage coal mining following earlier declines in local 422

manufacturing. Due to the vastness of the region, and its fragmentation across various state and local governments, the closure of multiple mine sites was not followed by a unified regional transition strategy. Where policy efforts to mine closures were made to mitigate the negative effects of the transition, these were often reactive and short-term in scope, whilst efforts at economic diversification were largely top-down and employer-focused. Ultimately, this led to displaced workers in Appalachia being far less likely to find alternative jobs when compared to other US workers, with research concluding that the policy measures were mostly ineffective for job creation.

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Ajay Gambhir, Fergus Green and Peter Pearson, ‘Towards a Just and Equitable Low-Carbon Energy Transition’ (Grantham Research institute on Climate Change and the Environment 2018) 3. Gambhir, Green and Pearson at 7. Peter Sheldon, Raja Junankar and Anthony De Rosa Pontello, ‘The Ruhur or Appalachia? Deciding the future of Australia’s coal power workers and communities’ (Industrial Relations Research Centre 2018) 42. Sheldon et al. 42. Sheldon et al. 42. Sheldon et al. at 44. Sheldon et al. at 45. 418 419

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In addition to a just transition for workers and communities reliant on carbon -intensive sectors, 424

it has to be recognised that low-carbon technologies too can be a source of injustice. A recent example wherein already vulnerable communities were disadvantaged and dispossessed by the low-carbon transition is the development of the Gujarat Solar Park in Gujarat, India. The Gujarat Solar Park-1 went on-grid in April 2012 and was the first solar park under the Gujarat Solar Power Policy 2009. Two already disadvantaged communities were severely disaffected by the land acquisition process for this project. The Rabari pastoral community who had previously grazed their herds on the government land on which the project was built was dispossessed of its 425

livelihood. While subsistence farmers in the region ended up selling their land below market rate, thereby leaving them inadequately compensated and similarly dispossessed of their livelihood.

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Large-scale projects such as the one in Gujarat, India unavoidably require the conversion of large areas of land into a singular non-agricultural use. The means of acquisition of the requisite land is and will continue to be a contentious issue in the transition to a low-carbon economy. This is especially so in developing countries such as India where rights to rural land can be ambiguous, with a lack of legal records or tenure documents serving to facilitate the acquisition of the land by the government for the project.

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Generally, policy makers have to be cautious about labelling local people and communities as 428

problems to be overcome to get low-carbon projects implemented. Ultimately, a failure to implement just and legitimate procedures in land acquisition would violate the rights and livelihoods of marginal and disadvantaged communities, this would go on to undermine their trust in political institutions. This distrust would incite resentment, create conflicts and inevitably 429

delay project implementation. Additionally, the way that corporations manage the transition would have an impact on their social license to operate in the wider community. Companies that fail to engage with workers and communities could face operational, consumer, client and regulatory repercussions.

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Towards a Just and Equitable Low Carbon Energy Transition p7. Yenetti et al. 3, 18. Yenetti et al. 18. Yenetti et al. 10. Galvin, R. ‘Them and us’: Regional-national power-plays in the German energy transformation: A case study in Lower Franconia. Energy Policy 113, 269–277 (2018). Yenetti et al. 20. Robins, Brunsting and Wood (n46) 12. 425 426 427 428

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Implementing a Just Transition The transition to a sustainable low-carbon economy presents major opportunities and challenges for countries and stakeholders. The transition, if properly managed with the full engagement of governments, workers and employers’ organizations, can become a strong driver of job creation, job upgrading, social justice and poverty eradication.

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As key stakeholders within the global

economy, institutional investors are well positioned to call for and effect the necessary changes to transition to an equitable and sustainable economy. Moreover, with government policy often having fallen short of resolving various social and economic issues, society is now beginning to look to companies to step up to the mantle. There are now calls for investors and companies to look beyond pure profits and take these broader considerations into account in corporate decision-making. One of the more notable examples being the letters written by BlackRock CEO Larry Fink, to CEOs in 2018 and 2019, where he called for companies to take the lead and demonstrate their commitment to the communities in which they operate.

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To achieve this transition, this paper puts forward two key proposals. First, there has to be a strong and comprehensive government policy seeking economic diversification. To this end, institutional investors can lobby and work with governments to enact such a framework, as is being done through the 2018 Global Investor Statement to Governments on Climate Change prepared by a consortium of investor organisations across the world.

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Second, companies

involved in the transition should utilise a more thorough and transparent reporting framework. This can be achieved through a combination of government regulation and institutional pressure from investors holding shares in these companies. Looking at the first proposal involving government policy, a positive example of a just transition achieved through effective government policy is the transition in the West German Ruhr, which developed from a steel and coal-based economy to a knowledge-based economy in the 1990s. An essential component to the successful transition was a comprehensive policy framework

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UNFCCC, ‘Just Transition of the Workforce’ (n47) 21. Larry Fink CEO Letter <https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter> <https://www.blackrock.com/hk/en/insights/larry-fink-ceo-letter>. ‘2018 Global Investor Statement to Governments on Climate Change’ <https://theinvestoragenda.org/wpcontent/uploads/2018/12/GISGCC-FINAL-for-COP24-with-signatories_6-Dec.pdf> accessed 18 July 2019. 432

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which comprised of the active management of economic diversification by the federal and regional governments, paired with the participation of workers and communities in the entire 434

restructuring process. Additionally, the implementation of widespread retraining programmes to retrain displaced coal industry to work in this newly diversified economy was key to avoiding social fallouts that would have otherwise occurred .

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There is no set formula appropriate for every local transition given the multifarious nature of economic changes. The International Labour Organisation (ILO), in its Guidelines for a Just Transition, affirms the position that policies and programmes need to be designed in line with 436

the specific conditions of the countries and their respective local circumstances. Nevertheless, drawing from the case studies discussed earlier in this paper and also the principles and policy points set out in the ILO Guidelines, two broad principles for government action can be extracted.

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First, it is essential that there is a long-term overarching framework that brings cohesive leadership and coordination throughout the transition process. All studies of successful carbon transitions demonstrate a considerable role for active government involvement in steering regions towards 438

new and alternative industries. That said, it has been argued that the best approach would utilise both top-down and bottom-up policy development processes.

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This is essential to avoid a

mismatch between top-down expectations and the reality on the ground, as was the case in Appalachia. Second, as no single actor can deliver the just transition alone, there has to be a strong social consensus on the goals and pathways of the transition. This can only be achieved through continued efforts at consultation through maintaining a tripartite social dialogue between the government, businesses, and worker unions.

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In a study analysing 6 cases of mining closures

across the USA and the EU, Caldecott et al highlighted the importance of such a tripartite dialogue together with long-term policy commitments and a proactive approach to managing 434

Béla Galgóczi, “The Long and Winding Road from Black to Green” 6, no. 2 (2014): 25. Miller, C.A., Iles, A., Jones, C.F., 2013. The social dimensions of energy transitions. Sci. Cult. 22, 135–148. http://dx.doi.org/10.1080/09505431.2013.786989. ILO p6, IRRC p58. ILO p6. Gambhir, Green and Pearson (n51) 11. IRRC p67. IRRC p54, UNFCCC, ‘Just Transition of the Workforce’ (n47) 49. 435

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uncertainty in the face of unforeseen circumstances.

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Furthermore, in its guidelines for a just

transition, the ILO would reiterate this point in its calls for governments to actively promote and engage in a social dialogue to discuss the best means to implement national social, economic, and environmental goals.

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Ultimately, if more resources are invested into tailoring a transition takes into account the interests of domestic communities, workers and businesses of a specific region, it is far more likely that a sustainable and just transition can be achieved at a significantly reduced overall financial cost.

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Looking beyond government policy, corporations as well as their investors can effect a just transition by utilising or encouraging the use of a more thorough reporting framework – a framework that incorporates climate disclosure as well as social aspects such as the protection of human rights and the provision of decent jobs. A climate disclosure framework already exists in the Task Force on Climate-related Financial Disclosure (TCFD) framework, which establishes recommendations for the disclosure of clear and comparable information about the risks and opportunities presented by climate change.

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The framework was commissioned by the Financial Stability Board in 2015 and was published in 2017. It seeks to develop voluntary, consistent climate-related financial disclosures that would help stakeholders understand the relevant material risks.

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The TCFD provides global

recommendations on climate-related financial disclosures, including four widely adoptable 446

principles that are applicable to organisations across sectors and jurisdictions. The TCFD has been publicly endorsed by the Global Investor Coalition, and has already been endorsed by over 238 companies, including 150 financial institutions representing a combined market capitalization of over US$6 trillion and US$81.7 trillion assets under management.

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Caldecott, B., Sartor, O. & Spencer, T. Lessons from previous Coal Transitions: High-level summary for decision makers. 24 (IDDRI and Climate Strategies, 2017). ILO p8. IRRC p58. “Recommendations of the Task Force on Climate-Related Financial Disclosures” . ibid. 2. “Briefing Paper on the 2018 Global Investor Statement to Governments on Climate Change,” <http://globalinvestorcoalition.org/wp-content/uploads/2018/07/180529_GISGCC_briefing_paper_FINAL.pdf.> accessed 20 May 2019. ibid. 442 443 444 445 446

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facilitating greater transparency in the context of climate risk, the framework would ensure fully informed corporate and investment decision-making. In addition to climate-related risks, a reporting framework has to include the social implications of the transition. This can be achieved by extending the TCFD framework using accepted approaches such as the UN Guiding Principles Reporting Framework,

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which covers human

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rights issues; the Workplace Disclosure Initiative, which deals with how companies manage workers in their operations and supply chains; and the Global Reporting Initiative,

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which

provides sustainability reporting standards that covers economic, environmental and social impacts. Comprehensive and transparent reporting on the social implications of corporate actions has a two-fold impact. First, it would influence corporate behaviour by bringing Environmental Social and Corporate Governance (ESG) goals to the fore, which could lead to a shift towards a more just and equitable agenda. Second, it would empower workers, affected communities, and NGOs to have their voices heard and be a part of the corporate decision making process. Economic disruption caused by the transition to a low-carbon economy is unavoidable. Nevertheless, it is the position of this paper that the worst impacts of the transition can be softened and even alleviated. A strong government policy that provides an overarching framework whilst keeping a close ear to the ground can guide affected regions through these tumultuous times. Furthermore, corporate cooperation through a transparent reporting framework would also empower and inform stakeholders, thereby further facilitating a just and equitable transition to a cleaner and greener economy. RECOMMENDATIONS – WHAT LIES AHEAD?

The inevitable consequences of climate change have left mankind with no more than a decade to overturn centuries of destructive development. While it may seem like a Herculean task to

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“UN Guiding Principles Reporting Framework” < https://www.ungpreporting.org/wpcontent/uploads/UNGPReportingFramework_2017.pdf.> accessed May 19, 2019. “Workforce Disclosure Initiative 2018 Guidance Document,” < https://shareaction.org/wpcontent/uploads/2018/07/WDI_Survey_Guidance_2018.pdf> accessed 19 May 2019. ‘Global Reporting Initiative’ < https://www.globalreporting.org/Pages/default.aspx> accessed 19 July 2019. 449

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overcome deeply embedded partisan bureaucracy that often defines government today, it is not impossible. st

One of the peak developments and key institutions of the 21 century – the financial market has the potential to define our fates. Investment markets hold significant power in our capitalistic economies, and they should be regarded as one of the prime tools to help the world overcome the impending climate disaster.

Technology is also arguably one of the key features that had defined society in the 21 century. Investment into climate change technologies could potentially be the most important key to unlocking the puzzle that we are facing today. Research by major corporations already suggests that the economic benefits of investment will outweigh the costs of inaction towards anthropological climate change.

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From the current economic perspective, research for climate change investment has already yielded positive results. Studies by the London School of Economics and Economist expects total global investment output to be higher under a lower emissions scenario while Citigroup expects investment in climate change mitigation to generate attractive and growing yields.

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Investment for climate change technologies is also a proven methodology that outpaces conventional technology development and market productivity. According to the International Renewable Energy Agency (IRENA), the cost of wind turbines has fallen by 37-56% and that of solar photovoltaics by approximately 80%. As a result, renewable energy – a climate change technological success story – is now the cheapest source of power generation in many parts of the world.

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Understanding Situational Limitations Before we delve into recommendation policies for investment in climate change technologies, it is necessary for us to understand the key differences of our potential target audience, as well as identification between idealistic and realistic policies required to suit each region’s characteristics

EY. (2018). Climate Change: The Investment Perspective. United States: EY. Channell, C. N. (2014). Energy Darwinism II - World Energy Investment Outlook. International Energy Agency. Citigroup. IRENA. (2018). Corporate Sourcing of Renewables: Market and Industry Trends. IRENA. 451 452

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and the potential damage from climate change.

We must also acknowledge the political influences that defines today’s global governance. Governments today are often short-sighted in policymaking as modern political prerogative demands that re-election is more important than leading the country to long-term benefits. Thus, resulting in the rise of populist policies that is designed to placate the short -term needs of rising disaffection from the people, while framing politics as a Manichean battle between the will of ordinary people and corrupt, self-serving elites.

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a. First, idealistic policymaking is considered a long-term solution with sacrifices in short-term social welfare and economics. But not without considering a nation’s holistic situation, instead believing in a trade-off for the greater good, which is subjective to different camps. Realistic policies on the other hand, may not be the most effective solutions towards the issue but attempts to ensure that states will not be severely compromised in the short run to solve long-term problems. It is a complex conundrum, but we must be able to judge the necessity of a solution through severity and urgency of the issue, while considering the amount of people that will be victims of it. It would thus be best to view the impending climate disaster as one that would require affirmative and immediate action, where sacrifices may be necessary to allow a greater chance for mankind to survive. As the Asian Development Bank (ADB) coined it; planning for climate change requires a move away from a ‘predict-then-act’ approach and towards a ‘no-regret’ approach. The latter calls for an understanding of drivers of vulnerability and investments in resilience that would be justifiable under a wide range of climate scenarios or even in the absence of climate change. The ‘no-regret’ approach does not depend on detailed climate projections.

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b. Second, the difference between developing and developed nations should be a deciding factor for consideration in the policies. However, it would also be naïve to define our target audience

Paul Lewis, C. B. (2019, March 6). Revealed: the rise and rise of populist rhetoric. Retrieved from The Guardian: https://www.theguardian.com/world/ng-interactive/2019/mar/06/revealed-the-rise-and-rise-of-populist-rhetoric ADB. (2014). Climate Change and Rural Communities in the Greater Mekong Subregion. Asia: Asian Development Bank. 454

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within the two aforementioned categories, thus it would be in every nation’s best interest to carefully consider the socio-economic situation as well as to weigh the industrial capacity of their own nation towards the policies recommended. c. Lastly, when we examine the effectiveness of policies that affect investment in a sunrise industry like climate change technologies, we must consider a nation’s governing will and influences that may undermine the economies for climate change technologies. This can be further analysed in countries like the United States, where big oil companies are deeply imbedded in the rise of their nation, thus hold substantial control and political lobbying power over climate change technologies that may reduce their market share and profitability away from fossil fuels and other industrialisation technologies. The United States has presented the world with an excellent model of how populist politics has derailed the potential for climate change policies. With relation to Alexandria Ocasio -Cortez’s Green New Deal (GND), Republicans have claimed that the resolution, which contains no actual legislation, is a socialist manifesto which would cause “genocide”. At a rally, President Donald Trump called the proposal an “extreme $100 trillion government takeover” which would mean “no more airplanes, no more cows, one car per family”. The Texas senator Ted Cruz has said the Green New Deal will result in the end of hamburgers.

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Such assertions have no basis in fact: the resolution does not call for the elimination of animal agriculture or aviation. The extraordinarily large cost attributed to the plan by Republicans, typically US$93 trillion, is also false, meant to mislead and purposefully misinform voters. AOC, one of the rising stars of American politics, after beating 10-term incumbent Joe Crowley in the Democratic primary to represent New York’s 14th District in 2018. Her proposed Green New Deal was considered revolutionary and courageous, aiming to eliminate carbon emissions as well as reinventing the American economy. Despite the political assassination of the GND, the reading itself was one that clearly defined the hard economic and industrial transitions that America had to take, while protecting the interests of the people in the middle- and lower-income range of the society. A brief 14-page The Guardian . (2019, March 30). Ocasio-Cortez says Green New Deal critics are making 'fools of themselves'. Retrieved from The Guardian : https://www.theguardian.com/us-news/2019/mar/30/alexandria-ocasio-cortez-greennew-deal-republicans 456

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recommendation showing the direction on how governments should prepare ahead to avert climate disaster. Thus, the driving theme that would define our policy recommendations below is to begin with 457

education. Education is a foundation for growth in industries, and has been used throughout history to develop generations that will be able to propel societies forward. It would be important to not only define education here as one that is obtained from public and private institutions, but one that will be inclusive of the greater population that has graduated from the system. Inclusive education through public communications, campaigns, marketing can be leveraged effectively to ensure that human capital can be more efficient towards supporting CCTOs, thus in turn encourage growth and propel investment for it.

Policy Recommendations Education Education on climate change should be considered a strong factor to advocate for the increase of investments in CCTOs. Public acceptance and awareness (that can be gained through education) is a necessary tool for potential stakeholders to dive into investments. As we observed in the increased appetite for renewable energy technology, global investments in renewable energy have increased five-fold over the last 15 years.

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This coincided with the latest results in a decade-long string of surveys on “Climate Change in the American Mind,” run by researchers at Yale and George Mason University, measured a big rise in acceptance of science showing the global climate is warming. For the first time since it began in 2008, more than 60 percent of respondents said that global warming is caused mostly by humans.

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This possibly reflects a relationship between awareness and action, where the

increase of investments arguably naturally coincided with increased global awareness.

Krueger, A. (1972). Rates of Return to Turkish Higher Education. Journal of Human Resources. Beate Antonich, P. (2019, Feb 2). Renewable Energy Investments Increased Five-fold Globally Over Past 15 Years . Retrieved from IISD SDG Knowledge Hub: https://sdg.iisd.org/news/investment-in-renewable-energy-isclean-but-in-transmission-and-distribution-technologies-not-necessarily/ Revkin, A. (2019, Jan 23). Most Americans now worry about climate change—and want to fix it. Retrieved from National Geographic: https://www.nationalgeographic.com/environment/2019/01/climate-change-awareness-pollsshow-rising-concern-for-global-warming/ 457 458

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UBS also reported that better education often leads to higher adoption for sustainable investments. Sustainable investors were influenced by multiple sources, including professional advisors, family, friends and media. 90% of sustainable investors cite an advisor’s impact on their decision to invest sustainably.

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While more empirical research should be done on the links between increased educational awareness and investment appetite for climate change technologies globally, survival psychology from Charles Darwin remains a strong indicator for what is possible – organisms are more likely to react to a life and death situation upon realisation.

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Nuclear energy, a potentially invaluable tech that would greatly reduce carbon emissions from 462

industries, remains stuck in the bitter end of public perception. Unfortunate historical examples in Chernobyl and Fukushima has led to great misconceptions and perceptions towards nuclear energy, which led to the avoidance of this truly green technology. However, with education, people are becoming increasingly supportive of nuclear when they feel better informed. The Eurobarometer polls from a combined report from Nuclear Energy Agency and OECD showed that while Europeans believe they are not familiar with nuclear safety issues, respondents with higher levels of education are more likely to think that the advantages 463

of nuclear outweigh the risks (38% in the highest educational group vs. 27% in the lowest). In the data gathered in this report, respondents also showed that perceived levels of knowledge in, and personal experience of, nuclear energy has a significant impact on views about nuclear energy. Since the advent of human capital theory in economic thought, estimating the returns to investment in education has been a very popular subject among researchers.

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human capital through education can result in greater public awareness towards the inevitable UBS . (2018). Return on values. UBS. Darwin, C. (1871). The Descent of Man and Selection in Relation to Sex. London: John Murrey. Ausubel, J. H. (2007). Renewable and nuclear heresies, Int. J. Nuclear Governance, Economy. The Rockefeller University. OECD. (2010). Public Attitudes to Nuclear Power . NUCLEAR ENERGY AGENCY, ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT. OECD. doi:ISBN 978-92-64-99111-8 Harry Anthony Patrinos, G. P. (2019). Returns to Investment in Education The Case of Turkey. The World Bank. 460 461 462

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societal changes of climate change technologies. This could increase a natural appetite for more technological improvements towards the green camp, thus increasing demand and profitability for it. If we were to consider Singapore’s example in leveraging human capital as a growth factor in the 1990s, we would be able to observe how economic development in a significantly smaller state in Southeast Asia develop tremendously with increased value of human capital that is a trademark of Singapore’s miraculous growth.

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Societal pressure also plays an important role towards pushing companies to change to climate friendly structures and technologies. For example, the recent plastic straw revolution showed us the point of contact that influenced true sweeping changes in the F&B industry, leading to a wave of sustainability initiatives that has spread into major institutes and industries.

The role of communications for the road ahead will arguably be more important than it has ever been in the last century. Marshall McLuhan most prominently emphasised the impact of media technology on society in 1964 with his statement of “the medium is the message”, which he refers to the power and scale of media to change people’s feelings and perceptions through an extension to their own understanding.

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In our interconnected society today, it would be naïve to deny the plausible effects of communications towards education and influencing greater society. The prominence of social media movements in the past decade has spawned enough examples for policies to leverage and pressure corporations into adopting climate change technologies. Renewable Energy 100 (RE100) is one of the major external commitments available to multinational corporations to signify their foray into climate change technological investments. This is a global corporate initiative that brings influential businesses together to commit to 100% renewable electricity consumption. Over 176 MNCs have already pledged to commit toward 100% renewable energy by 2020.

Osman-Gani, A. M. (2004). Human Capital Development in Singapore: An Analysis of National Policy Perspectives. Advances in Developing Human Resources. Singapore: Nanyang Technological University. 465

doi:https://doi.org/10.1177/1523422304266074 McLuhan, M. (1964). The Medium is the Message. Media and Cultural Studies: Keyworks. 466

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Such a change would have been unfathomable a decade ago, where environmental campaigns were unable to influence significant change in major industries. However, rising urgency as well as increased media coverage towards the impending climate disaster acts as an educational bridge that fills the gap and allows individuals to understand the severity of the situation and react accordingly. However, we still have a long way to go. Micro-consumerist behaviours account for change but would barely scratch the surface of the greater issue we are facing. Regardless, such developments represent hope and possibility towards such an approach for education t o inevitably increase investment and attention for climate change technologies. While considering that communications is to be one of the key tools of progressive and inclusive education for society towards climate change technologies, it would be beneficial for investors to look towards socio-environments campaigns from national agencies and engage with public relations firms to help fully maximise the efficiency of public education before desensitization of the public message. Circular Economy

Circular economies are built upon an industrial system that is restorative or regenerative by intention and design. It replaces the end-of-life concept with restoration, shifts towards the use of renewable energy, eliminates the use of toxic chemicals, which impair reuse and return to the biosphere, and aims for the elimination of waste through the superior design of materials, products, systems and business models.

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By transitioning economies from the linear destructive model of the industrial era to a modern circular economy, we will be able to naturally increase the appetite for investment into climate change technologies that are essential to fit into the new running model.

The introduction of climate-friendly technologies will ultimately overthrow eras of development

McKinsey. (2014). Towards the circular economy: Accelerating the scale-up across global supply chains . Retrieved from http://reports.weforum.org: http://reports.weforum.org/toward-the-circular-economy-accelerating-the-scaleup-across-global-supply-chains/from-linear-to-circular-accelerating-a-provenconcept/?doing_wp_cron=1559119454.473931074142456054687 467

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that grew without consideration of the environment. And this monumental shift in mindset and responsibility with not only be an economic challenge, but also a psychological challenge for producers and consumers alike. Retraining disenfranchised workers from post-structural economic changes should be a priority of any economic transition policy. National workforce agencies can aid the transition with early education benefits and programs to retrain certain industries that are bound to be affected by the structural economic changes. This reduces the economic slowdown in growth that is to be expected when sunrise and sunset industries develop unequally. World Bank Group President Jim Yong Kim reiterated this by stating that the world today faces a "human capital gap." In many countries, the workforce is unprepared for the future that is fast unfolding.

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Potential stakeholders can start by leveraging government retraining initiatives like SkillsFuture from Singapore to build climate change technological packages meant for sunrise industries like the renewable energy sector. This can provide human capital that is necessary for industrial growth for the next decade. Rural Initiatives with Public Private Partnerships (PPPs) With rural communities being arguably the most vulnerable stakeholders towards the inevitable 469

effects of climate change, we can engage them as stakeholders for investment towards climate change technologies. This would also have great potential levelling effects for these communities in terms of development, when we are able to provide them with the latest technology to increase their standard of living sustainably. For example, we have observed successful renewable energy technologies in its infancy stages that have leveraged upon rural communities to reduce their carbon footprint by offering an

The World Bank. (2018, August 3). Investing in People to Build Human Capital. Retrieved from The World Bank: https://www.worldbank.org/en/news/immersive-story/2018/08/03/investing-in-people-to-build-human-capital Dasgupta, P. J.-F. (2014). Part A: Global and Sectoral Aspects. Contribution of Working Group II to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change. IPCC, Cambridge University Press. 468

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environmentally sustainable alternative.

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The introduction of pilot projects for solar diesel

hybrids in Nepal, Pakistan, and Sri Lanka has shown promising results in ke eping up with developing communities and their needs while allowing the technology and stakeholders gather valuable experience to tailor efficient development.

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Such implementation allows technology to be tested in harsher conditions at its early stage s, as well as benefit communities at the edge of civilization that lack basic human needs. Also, such technological drift would also help communities build towards a circular economic model sooner, instead of being forced to rely on fossil fuels and unsustainable industrial methodology for development.

As seen in the case of Bangladesh, they are expected to expand the solar power-based irrigation systems in rural areas replacing existing diesel and electric water pumps – actual implementation after testing adaptations of the climate change technology. Community participation in the assessment process ensures a joint visualization of future scenarios and selection of context-appropriate adaptation options. It will also ensure greater 472

ownership in the implementation of adaptation strategies. This is able to improve the cohesion of investment into the technology that will be mutually beneficial for all parties.

To improve adaptation planning for communities, there is a need to better understand their climate vulnerability through an appropriate assessment methodology. Assessment outcomes can then be used to support the mainstreaming of climate change adaptation initiatives in community development planning to increase community resilience both now and under a future climate.

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PPPs between climate change tech companies and the government can leverage this form of partnerships to maximise development, efficient deployment and reduce their risk exposure and ROI. The private sector’s vast financial resources could greatly contribute to PPPs. Private ADB. (2017). ImprovIng lives of rural communItIes through developIng small hybrid renewabLe energy systems. Asian Development Bank. ADB. (2017). ImprovIng lives of rural communItIes through developIng small hybrid renewabLe energy systems. Asian Development Bank. ADB. (2014). Climate Change and Rural Communities in the Greater Mekong Subregion. Asia: Asian Development Bank. ADB. (2014). Climate Change and Rural Communities in the Greater Mekong Subregion. Asia: Asian Development Bank. 470

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capital could make a major contribution to investment with the estimated $100 trillion in global assets managed by pension, sovereign wealth funds, insurance companies, and other institutional 474

investors. This could aid governments in developing countries who may not be able to afford to test a wide range of necessary climate change technologies in their rural areas – a mutually beneficial partnership in which after successful development, could be adapted to developed countries and their resources. Further policies such as controlled investments with scientific advisory and streamlining adaptation processes in urban areas would also encourage the growth of PPPs for climate change technological opportunities as private capital would be enticed to invest with more reliable regulations guiding the development phase of these technologies. We can observe government guidelines with providers in China’s renewable energy market that allowed the industry to boom in the past 5 years. According to China’s National Energy Agency (NEA), installed capacity of hydropower stations, wind power stations, photovoltaic power stations and biomass power stations in 2018 grew 2.5 percent, 12.4 percent, 34 percent and 20.7 percent year on year.

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State Grid Corp, the China Southern Power Grid, and the Inner Mongolia Power (Group), continuously improved their system adjustment capabilities, optimised operations, and allowed the utilization rate of renewable energy to grow significantly with the guidance from the state. Thus, reflecting how state ownership and private partnerships are able to maximise technological growth that will ultimately attract more investments with successful results. State ownership in PPPs can also be a risk incentive towards private investment in climate change technological opportunities. State ownership reduces exposure risk that stakeholders would face in a financial portfolio. Furthermore, reducing liability through state ownership wo uld incentivise private investment capital who are undergoing positive transitional adjustments to their corporate structures. Also, reputational risks within large multinational corporations can be mitigated with the state taking more responsibility with regulation and legislation in guiding the portfolio.

Arezki, R. P. (2016). From Global Savings Glut to Financing Infrastructure: Washington, DC: International Monetary Fund: IMF Working Paper No. 16/18. The Straits Times. (2019, Jan 29). The Straits Times . Retrieved from The Straits Times: https://www.straitstimes.com/asia/east-asia/chinas-renewable-energy-output-leaps 474

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Reducing risk profiles and having higher credit ratings can also attract private investment. Sovereign and country risks play an important role in predicting the number of PPPs reaching financial close and the size of private investments. In their empirical analysis using Euromoney’s measure of country risk, Araya, Schwartz, and Andrés

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(2013) found that private sector

participation in infrastructure projects is sensitive to country risk; that is, risk ratings are a generally reliable predictor of PPP investments in developing countries. An improvement in country risk scores have a positive effect, from 21% to 41%, on the probability of having PPP commitments as well as investments in dollar terms. Governments can enact policies that support the attainment of the Paris Agreement’s goals to provide and accelerate private sector action with greater certainty to governments’ commitment in tackling climate change. This will improve investors’ ability to assess climate-related risks and opportunities, to measure and disclose portfolio exposure to the low carbon transition and physical climate impacts, and to further invest in opportunities to support climate change technologies. By incorporating Paris-aligned climate scenarios into all relevant policy frameworks and energy transition pathways, government ownership and commitment will only fuel private capital’s appetite towards climate change opportunities. Special Economic/Environmental Zones (SEZs) SEZs are a geographically delineated area subject to differentiated regulation and administration from the host country where it resides, for the purpose of attracting foreign direct investment in economic activity that could not otherwise be achieved.

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This has been a traditionally successful model that can be most prominently observed in Shenzhen, China. In the case of the Shenzhen SEZ, the state was aided with foreign investment initiatives and tax benefits for businesses to expand and grow. In the years that followed, Shenzhen expanded at an alarming pace. Its GDP per capita grew a jaw-dropping 24,569 percent Araya, Gonzalo; Schwartz, Jordan; Andres, Luis. 2013. The effects of country risk and conflict on infrastructure PPPs (English) . Policy Research working paper; no. WPS 6569. Washington, DC: World Bank. 476

http://documents.worldbank.org/curated/en/241991468159603304/The-effects-of-country-risk-and-conflict-oninfrastructure-PPPs Oliver Wyman. (2018). SPECIAL ECONOMIC ZONES AS A TOOL FOR ECONOMIC DEVELOPMENT. Oliver Wyman. 477

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between 1978 and 2014, and by 2016, its population stood at nearly 12 million from a sleepy fishing village of 30,000.

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Using this concept, it would be possible for nations to develop “Special Environmental Zones” to create testbeds for climate change technologies and invite investment to allow them to bloom in controlled conditions without global interference. This will maximise efficiency and development for investment in climate change technologies, where corporates are incentivised to finances projects with maximised efficiency in the SEZ. Regionally, we can leverage on intergovernmental associations like the EU and ASEAN to collaborate and grow several SEZs that would form an interconnected region to accelerate regional technological developments. Naturally, investment portfolios wi ll have increased attractiveness with such support from the government. Regionally connected SEZs also have the potential to diffuse information for greater growth throughout the regions. Similar to China’s selection of SEZ clusters in Shenzhen, Zhuhai and Shantou were in the same Guangdong province and had the geographical advantage towards promoting inter-city business expansion.

Education in SEZs were also a major factor for the rise of the Chinese economy. In China, many zones have well-equipped skills training centre, which works closely with technical and vocational schools, colleges and universities to provide relevant skills training and technology support for the firms in the zones.

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Nations can also set economic policies to fund technological start-ups with implementation and test-bed in their most vulnerable states which can be appointed as SEZs. This would maximise and enable start-ups to increase efficiency of development as well as secure resources and feedback from communities that are desperate for new technology to come into can benefit from this new source of affordable technology. Policies for SEZs also promotes economic caution as the Chinese practiced in their first set -up. As Zeng noted in the analysis of the beginning in China’s SEZs; Not knowing what to expect

Holmes, F. (2017, April 21). China's New Special Economic Zone Evokes Memories Of Shenzhen. Retrieved from Forbes: https://www.forbes.com/sites/greatspeculations/2017/04/21/chinas-new-special-economic-zoneevokes-memories-of-shenzhen/#4d20b7f276f2 Zeng, D. Z. (2015). Global Experiences with Special Economic Zones. The World Bank. 478

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from the reforms, Chinese authorities decided not to open the entire economy all at once but just certain segments: in Deng Xiaoping’s words, “crossing the river by touching the stones.”

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Therefore, besides the planned objectives of an SEZ — such as attracting investment into climate change technologies, promoting export and development, and generating specialised employment and spill-overs to the local economy — one important mission of should be to test new policies and new institutions for a climate change tech centered market economy, or the new circular economy model. The very purpose and nature of SEZs means that the definition of success implies redundancy of that zone’s original proposition. Planning for sustainable success requires identifying the target evolutionary path of an SEZ, designing for that at inception, with constant adaptation to internal and external economic dynamics.

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In an ever-changing world, any SEZ strategy must be designed with enough in-built agility to avoid becoming static or redundant in a very short space of time – responding to competition to remain relevant without delay or cost. The introduction of regional cooperation would help alleviate the competition between zones and unlike the economic zones, environmental zones would focus on refining technology and contribute towards cost-efficient widespread implementation. This will be crucial for SEZs to remain as a powerful and viable tool for environmental economic development. Lastly, education will be key for SEZs where the testbed of successful technologies must be integrated into communities with policies that provides smooth transition instead of drastic overhauls.

For example, we can observe in the world today that Singapore has introduced measures to catalyse the private sector to pursue new growth opportunities in sustainability industries and innovation, such as by setting aside S$900 million under the Research, Innovation and Enterprise 2020 urban solutions plan. Such public investment will be key in encouraging entrepreneurship within the planned region, where small medium enterprises will have greater financial incentive Zeng, D. Z. (2012). China’s Special Economic Zones and Industrial Clusters. Lincoln Institute of Land Policy. Oliver Wyman. (2018). SPECIAL ECONOMIC ZONES AS A TOOL FOR ECONOMIC DEVELOPMENT . Oliver Wyman. 480 481

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to maximise efficiency and development of their technologies with financial backing. Governments can lead on from such initiatives regionally by cooperation with ASEAN, to help progressively maximise talent and sector growth within neighbouring countries. International cooperation for such economic plans can also increase capital growth and re duce information barriers between potential investors and businesses from another region. MNCs and investment firms can capitalise on this venture now by engaging corporate partnerships with the plan, allowing industry experts to be part of the growth process as “mentors” to improve their current running technological foundation with innovation from a specialised and motivated market.

Integration into Present and Future Technological Systems In order to bridge the gap between past and future technological systems, governments must be able to plan ahead to acclimatise and adapt upcoming climate change technologies towards their current systems. This would ensure that foundations are prepared for the inevitable, and societies will be able to adopt changes with least discomfort. This ties in with the education of the population, in terms of retraining of disenfranchised workers to reduce the human capital skill gap between sunrise and sunset industries. It would also be necessary to consider a nation’s geographical advantages in producing and implementing climate change technologies. For example, consider China’s approach in solar panel expansion within its northern territories which is more exposed to sunlight each day.

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Careful utilisation of geographical advantages towards climate change technologies where applicable would be ideal for its development in its early stages. This would also mean that investment into climate change technologies should be guided by specialised academia to maximise efficiency and reduce risk for stakeholders.

Climate change technologies currently available are widely distributed geographically. Large -scale hydropower, however, are more centralised options constrained by geographic location. Some

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Sherwani, A. F. (2010). Renewable and Sustainable Energy Reviews. Life cycle assessment of solar PV based

electricity generation systems: A review. , 14(1), 540-544. The Wilberforce Society Cambridge, UK

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renewable energy resources are variable with limited predictability. Some have lower physical energy densities and different technical speciﬁcations from fossil fuels. Such characteristics can constrain ease of integration and invoke additional system costs particularly when reaching higher shares of renewable energy. Integrating renewable energy into most existing energy supply systems and end-use sectors at an accelerated rate is technologically feasible, though will result in a number of additional challenges. Whether for electricity, heating, cooling, gaseous fuels or liquid fuels, including integration directly into end-use sectors, renewable energy integration challenges are contextual and site speciﬁc and include the adjustment of existing energy supply systems. The adaptation strategy should be streamlined into local development plans to alleviate potential issues. Mainstreaming ensures that development plans will not increase vulnerability and will b e able to achieve their goals and targets under the current and future climate. Entry points for mainstreaming and integration should be identified as part of developing adaptation strategies.

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Investors can begin to identify technological replacements for sunset industries and start to actively invest capital for SMEs in nations that have a broader reach on improvements and advancements. Financial Outlook

The rise of environmental consultancy has marked a rapidly developing environment where investors are showing more caution and demands in the market. It also reveals a higher emphasis on requirements where they expect bigger positive impact and better performances. In the 2018 UBS Investor Watch, a survey of more than 5,300 investors in 10 markets on sustainable investing revealed that, while some investors understood the basic concept, confusion about sustainable investing terms, its various approaches and even its impact, is widespread. For example, investors make little distinction among the three major sustainable investment approaches: exclusion, integration and impact investing.

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ADB. (2014). Climate Change and Rural Communities in the Greater Mekong Subregion. Asia: Asian Development Bank. UBS . (2018). Return on values. UBS. 483

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Positive outlooks by sustainable investors also reveal an easier road ahead for more potential investments for climate change technologies. 82% believe the returns of sustainable investments will match or surpass those of traditional investments. Investors view sustainable companies as responsible, well-managed and forward-thinking thus good investments for the future.

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However, despite the positive outlook, not nearly as many investors apply their values to their investing. Currently, only 39% hold sustainable investments in their portfolios, defined as at least 1% of their investable assets. 58% of investors also expect sustainable investing to become the standard approach to investing in 10 years. Part of this disconnect can be accounted to confusion about sustainable investing that is likely preventing widespread adoption. 72% of investors find the language of sustainable investing perplexing—and less than half are very familiar with the term itself. Moreover, investors make little distinction among the major approaches to sustainable investing. Among the 61% of investors with no sustainable investments, 72% say measuring impact is difficult while 68% who resist sustainable investing believe the options are not firmly established, pointing to short track records and a lack of well-known sustainable companies.

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This has revealed that while the intention for investments in sustainability and climate change technologies may be growing, there is an educational and knowledge gap that is yet to be filled. 487

Global GDP is expected to triple by 2060, driven largely by developing markets. Yet, 1.3 billion people in those markets today still have no reliable access to electricity. Delivering the power that 488

global development will require represents a vast investment opportunity. And the delivery of this power can be a significant step for the public and private sectors to avoid our mistakes of the past. With the opportunity to positively influence developing economies of this century, we are able to avoid relying on destructive technologies and reliance on fossil fuels on development, but instead focus on rapidly growing climate change technologies, while constantly improving them to the needs for the next generation.

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UBS . (2018). Return on values. UBS. UBS . (2018). Return on values. UBS. OECD. (2016). GDP long-term forecast (indicator). OECD. doi: 10.1787/d927bc18-en International Energy Agency. (2014). World Energy Investment Outlook. OECD/IEA.

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Governments can take climate-related factors into account when making forward-looking lending decisions. This is particularly true given the long-term nature of many lending commitments and the consequent risk of exposure to unpredictable policy shifts. Like other financial institutions, banks are limited in their ability to make quantitative judgements about climate-related data. However, that does not prevent them from developing a lending strategy that combines their views on the technological transition with other strategic considerations, such as growth targets or geographic priorities. Banks can also contribute to collective organizations, such as the 2° Investing Initiative, exploring new tools for assessing climate-related investments. At a micro level, banks also need to ensure that they are taking note of specific risks to assets or borrowers from local changes, such as energy efficiency regulations. The 2° Investing Initiative is a global think tank for developing climate and long-term risk policy options in the financial markets. They are an organisation that analyses the world’s largest research projects on climate risks in relation to financial markets today. Founded by Jakob Thomä in 2013, they span the world today with over 40 research partners in the public, private and philanthropic sector such as The European Commission, United Nations Environ ment Program Finance Initiative and International Energy Agency.

Banks can benefit in sustainable investing through such partnerships, where risk assessment for financial portfolios and climate financial policy and framework can be developed together with subject matter experts. At the regional scale, such collaborations can also help smoothen the transition of climate solutions into investment and financial choices on the ground. Improving the Investment Climate

Structural simplification It is essential for governments to take the lead towards partnering with the private sector in taking the leap of faith towards sunrise industries. When governments create long-term economic plans to encourage foreign investment for climate change technologies, it would be necessary to coplan in advance with potential private investors, understanding and adapting to the private sector’s The Wilberforce Society Cambridge, UK

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concerns and requirements that would ultimately benefit stakeholders in the long run. This can reduce structural barriers to entry between investors and businesses, while allowing the government to continuously improve their policy structures to constantly evolving needs between the various industries.

In many cases, business and technological firms may be unfamiliar with the quality or technical standards required by larger foreign firms and thus have difficulty entering supply chain agreements and investment with them. Innovative, targeted and cost-efficient ways can be used to engage the private sector and break down information barriers between business, government and investors.

Training can be a valuable way to encourage linkages and reduce an investor’s barriers to entry. Because linkages programs must be tailored to the specific investor and business needs, standard approaches will not work. Programs should be carefully designed with input from both investors and stakeholders and should be built around regular dialogue to ensure that problems are identified and quickly corrected. Government economic plans can start small and work within sunrise sectors with high potential for employment creation or technology transfer.

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For example, we can observe the German solution towards rapid and efficient mobilization of wind turbines and solar cells in its industries. The nature of the policy instruments employed and to the political process which led to the adoption of these instruments was put on the highway through four steps: institutional change in the form of research and design policy, the formation of markets in the form of protected niches, entry of firms and establishment of the elements of an advocacy coalition. The value of this was not just in the rate at which the new technology was diffused or simplified, or whether or not existing structures were altered, but in the opportunities for experimentation, learning and the formation of industry visions of a future where renewables would play a larger role.

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OECD. (2011). Chapter 2. Investment Promotion and Facilitation. POLICY FRAMEWORK FOR INVESTMENT USER’S TOOLKIT . Staffan Jacobsson, V. L. (2006). Energy Policy. ELSEVIER. doi: https://doi.org/10.1016/j.enpol.2004.08.029 489

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Taking the lead from Singapore’s Economic Development Board (EDB), the EDB serves as the lead coordinator and facilitator for foreign direct across all development-related agencies in Singapore. It serves as the “one-stop agency” for companies seeking to invest in Singapore, formulates and implements economic strategies for the country, and promotes Singapore to select potential investors in alignment with its economic strategy. The EDB provides integrated services to investors through the tight coordination of efforts and linkages with other agencies and assignment of senior, on-the ground account executives to every company it engages. It also collaborates with local and foreign partner institutions on skills training and development. The EDB is unique in the role that it gives to private sector executives in strategy and policymaking. The connection between EDB and the government also signals to potential investors the importance of investment attraction to the country, and drives inter-agency cooperation, which leads to faster response time and more efficient use of resources.

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Governments can spur and attract investors through Singapore’s successful model in the EDB. Where the creation of a formal coordination mechanism in countries once established, should be chaired by the state and inclusive of all stakeholders engaged in regular dialogue for progressive improvement to its market mechanisms. In the European context we can look at Portugal, where its attractiveness to FDI has been improving year on year, to reach its record level in 2017, growing more than 61%. In the past decade, an increasing number of partnerships between main stakeholders, from both the private and public sectors, facilitated the location of flagship investment projects in the country. This encouraged the development of more technological and innovation-driven policies which has been a crucial factor in attracting more investments in a domino effect.

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Furthermore, confidence in Portugal’s future attractiveness is on a growth path, with 65% expecting a positive evolution in 2018. This will provide a feedback loop for FDI within the region to culminate and grow in Portugal, owing to its stability, telecommunication David Moloney, S. O. (2016). Investment Attraction: Learning from “Best Practice” Jurisdictions. Lawrence National Centre for Policy and Management; Ivey Business School at Western University. EY. (2018). The perception of Portugal leading FDI in Europe. Lisbon: EY. 491

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infrastructures, legal and regulatory environment, and the overall incentives offered by the government as key differentiators from the rest of Europe.

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The Role of Education Bipartisan education should be considered a vital component towards the longevity of most of our policy recommendations. With support and pressure from the society, corporations will be more motivated to commit towards climate change technologies and allow governments to be more courageous in introducing transitions to the economy. Efficient communications will play a vital role towards influencing investors at the highest level, where the banking and finance industry, aware of the inevitable threat, wi ll play the bridging architect to connect intention into actionable investments for the industry. Financial institutions have a unique opportunity to shape the global transition to a low carbon economy. They can help clients to optimise climate related risks and opportunities. It will play an invaluable role in reshaping the global economy. It will reduce the risks of a systemic financial crisis. And it will help individual firms to emerge as winners from the rapidly changing economic order.

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Survival psychology in the masses will be a factor towards the growth of climate change technologies, however, before it can trigger movement, the population must be educated enough to understand the true consequences and feel the necessity required to be open towards a new way of life.

Investors should step forward now and should consider a two-pronged approach, by investing in both communications and sunrise industries that will prepare the population growth for what is to come. Businesses in sunrise sectors must build efficient risk management structures that will be able to encourage investors to step in, and government protectionism policies will be key in guiding climate change technological sectors to grow.

United Nations Sustainable Development Goals

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Investment in climate change technologies also has the profound potential to affect and improve several aims of the United Nations Sustainable Development Goals. As mentioned earlier, with the right application to provide opportunity of experiential technol ogical growth in developing communities, we will be able to increase their standard of living under subsidised government zones that are built specifically to develop technology, increase standard of living and invite foreign investment. The future of climate change technological investments will be extremely dependent on the awareness and courage of corporations and governments. This can ultimately be influenced by the people who are the spine of the society and the world. Should the people be brave eno ugh to stand up in time, mankind will have another chance at creating history. Conclusion

Barack Obama has said that we are the first generation to feel the effects of climate change and the last generation that can do something about it. We are also the generation blessed with an opportunity to revolutionise a world in desperate need of change. By investing in the growth of climate change technologies to propel economies to transition or develop into a sustainab le model, we will be able to provide a greater balance of opportunities for all of society, and perhaps another chance for humanity.

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