Susan McGeachie, Co-Founder and Managing Partner
The IPCC’s March 2023 AR6 Synthesis Report estimates that global GHG emissions in 2030, based on Nationally Determined Contributions (NDCs), make it likely that warming will exceed 1.5°C during the 21st century. The IPCC concludes that all global modelled pathways to limit warming to even 2°C require immediate GHG reductions in every sector this decade and the choices and actions implemented over the next seven years will have impacts for thousands of years out. Our window of opportunity, which the IPCC sees rapidly closing, requires urgent improvements in access to financial resources, inclusive governance, and coordinated government policies.
The good news is there is a flurry of activity around climate solutions. The Climate Policy Initiative (CPI) estimates that public and private climate finance has almost doubled between 2011 and 2020. Financial Institutions are offering innovative financing solutions to advance climate action. A handful of the many examples include BMO’s first of its kind financing opportunity for building retrofits, Morgan Stanley’s 1GT climate private equity strategy, and the innovative Symbiotics Group, which connects international investors with companies’ clean energy solutions among other sustainable investments.
The IEA’s 2023 energy technology perspectives report shows that, for every USD 1 spent on fossil fuels today, USD 1.7 is now spent on clean energy, compared to a 1:1 ratio five years ago. The report estimates USD 1.7 trillion will be invested in clean energy in 2023, including renewable power, nuclear, grids, storage, low-emissions fuels, efficiency improvements, and end-use renewables and electrification, with electrification as the primary investment driver.
The bad news is that it’s still not enough. Achieving national climate objectives will require investment in climate solutions to increase at least seven times current levels by the end of this decade, according to CPI. Irena estimates an investment need of USD 35 trillion by 2030 to realize a 1.5°C-aligned energy transition.
One underpinning premise of the book Just Start: Take Action, Embrace Uncertainty, Create the Future is that your job, and even your industry, may disappear and, if we don’t accept this premise, we’re likely to take only half-hearted steps, if any at all, to prepare for the future. Those steps will not be able to lead us to a successful outcome in a world so fundamentally altered. In its 2019 Climate Issue, the Economist wrote that achieving a low carbon transition will require a complete overhaul of the global economy. We can’t undertake an overhaul with incremental change; we need a series of step changes to eliminate emissions from every part of the economy.
The Global Climate Finance Accelerator was created to help be that step change through partnerships and collaboration. By leveraging the expertise of finance, engineering, science, and policy through robust research initiatives, in particular the University of Toronto’s Climate Positive Energy, we strive to accelerate techno-economic analysis and creative financing solutions to advance scientifically aligned and technically viable climate projects, and contribute to the development of tomorrow’s leaders with the interdisciplinary skills required to transform to an equitable, net-zero economy.