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AKIPRESS.COM - The world is changing – 2016 was the hottest year on record, setting a new high for the third year in a row. In the same year, carbon dioxide levels officially passed the symbolic 400 ppm mark, EBRD said.
Scientific research indicates that the last time the world was this warm was 115,000 years ago and that current levels of carbon dioxide have not been experienced for 4 million years. Rising sea levels and increasing occurrences of extreme weather are some of the impacts, and they are coming sooner and more ferociously than expected.
Citizens, consumers, businesses, governments and international organisations are all taking actions to understand what is going on and how to tackle climate change. The financial sector is also increasingly concerned: Mark Carney, Governor of the Bank of England and Chairman of the G20’s Financial Stability Board, and Michael Bloomberg, the former Mayor of New York City, have highlighted that climate change has become a material risk. They have also noted that a properly functioning market will price in physical risks associated with climate change and reward firms that address them. In December 2015, the Financial Stability Board established a task force for climate related financial disclosure.
The EBRD supports clients in addressing physical risks associated with climate change and strengthening their climate resilience. This is crucial because many countries where the Bank invests are highly vulnerable to climate change.
For instance, rising temperatures, changing precipitation patterns and retreating glaciers in Tajikistan are affecting the local hydropower sector’s capacity to generate electricity. Given that 98 per cent of the country’s electricity originates from hydropower, this is severely impacting the local population and economy.
Rising sea levels and increasing temperatures in the southern and eastern Mediterranean (SEMED) are strongly affecting important economic sectors like tourism and agriculture which depend heavily on weather conditions and the availability of water. In some countries in the Western Balkans, economic growth has been at risk after heavy rain and floods severely damaged the regional road networks.
The EBRD screens all its projects for climate vulnerability. If a project is identified as climate sensitive, the Bank offers donor-funded climate risk assessments or feasibility studies. For instance, when planning to co-finance the second cargo terminal in the port of Gdańsk, the EBRD commissioned a feasibility study to ensure that climate change considerations were part of the project design. The study recommended several measures including adjusting the quay height to cope with sea level rises, a reserve in the drainage system to deal with increasing rainfall and adjusting the fenders and mooring points to increased wave heights.
In 2011, the EBRD started tracking climate adaptation finance systematically. Since then, the Bank has provided close to €1 billion specifically for adaptation measures making more than 160 projects worth around €3.6 billion of EBRD finance more resilient to climate change. Almost 40 per cent of adaptation finance was spent in the private sector which makes the EBRD the largest provider of private sector adaptation finance among all multilateral development banks.
We are channelling over US$ 75 million to rehabilitate one of Tajikistan’s vital hydroelectric power plants - at the Qairokkum dam. The project is also supported by the Climate Investment Funds, UK and Austria.
More than €500 million in climate adaptation finance was channelled into climate resilience upgrades of municipal infrastructure. The Bank also financed climate resilience investments in the power, transport and agribusiness sectors. In the power sector, the EBRD provided support to make Qairokkum, a hydropower plant in Tajikistan, more resilient to climate change.
In 2015, the EBRD launched its first climate resilience financing facility (CLIMADAPT) which provides credit lines to three local partners banks in Tajikistan for on-lending to small and medium sized enterprises, farmers and residential clients for climate resilience improvements such as water efficiency and soil erosion reduction projects.