Climate Policy, Culture & Governance Flashcards
What was the first global agreement on climate, when was it and what did it establish?
1992 Rio Earth Summit
Established UNFCCC
What was the first global compact on emissions reductions?
When was it?
What did it commit to?
1997 Kyoto Protocol
Reduce emissions 5% from 1990 levels by 2012
What period did global average temperatures not meaningfully rise?
40s-60s
What trend was observed in the 1950s and 1960s, what was this as a result of?
Cooling trend
Attributable to aerosols
When did the global mean temperatures start to rise significantly, what was this in line with?
1980s - clean air regulation
In line with consensus on anthropogenic influence
What did the warming trend of the 1980s lead to the establishment of?
What followed shortly after?
1988 IPCC International Panel on Climate Change
1992 UNFCCC
Who led the modelling of the ‘optimum’ level of emissions reductions?
Nordhaus
What model did Nordhaus develop? What did this suggest?
When was this?
Nordhaus - DICE Model
Dynamic Integrated Climate Economy - 1990s
Limit 3.5*c
Climate scientists have been what since Nordhaus?
What happened to his model?
More conservative due to ‘tipping points’ and ‘feedback mechanisms’
Model revised down to 2.0*c
What country has the highest cumulative emissions?
United States (25%)
What continent has the highest cumulative emissions?
Europe
What % of cumulative emissions in Asia responsible for?
29%
What % of cumulative emissions is the European Union responsible for?
20%
What % of cumulative emissions is China responsible for?
12.5%
What % of annual current emissions is Asia responsible for?
53%
What % of annual current emissions is Europe responsible for?
17%
What % of annual current emissions is North America responsible for?
18%
When was the first ever summit on climate?
Who was it organised by?
1979 World Climate Summit
Organised by World Meteorological Organisation
When was the IPCC created?
1988
When was COP 1? Where was it?
1995 - COP 1, in Berlin
What was Kyoto Summit also known as?
COP 3
What did the Kyoto Protocol ask and of whom?
Annex 1 countries attain 5% emissions reductions compared to 1990 levels by 2012
Name the mechanisms that promote flexibility and technology transfer between countries - part of Kyoto Protocol
Emissions Trading - Annex 1 can sell to Annex 1
Joint Implementation - meant Annex 1 can take technology transfer to another Annex 1
Clean Development Mechanism (CDM) - provide a way for emissions cuts to be spread to developing economies, A1 can get credit for conducting emissions reductions project in non A1
Why did Kyoto Protocol end in failure?
No solution to collective action problem - didn’t even achieve modest reduction
What COP was held in 2009?
Copenhagen - COP15
What was COP15 (Copenhagen) known for?
- no legally binding treaty agreed
- first COP to establish aspirational goal of 2*c
- first COP to establish principle of nationally determined contributions
When and to whom are NDCs submitted to?
Every 5 years
Submitted to the UNFCCC -
First round of Paris Agreement NDCs were not aligned to the 2c* limit - more like what *c?
3*c
What is the mechanism called where NDCs are made more ambitious?
Ratcheting
What was Japan’s 2020 NDC in response to?
Japan’s 2020 NDC was not significantly different to 2015
After S.Korea adopted net-zero 2050 goal, Japan did too
= peer pressure
+ / - of carbon taxes
+ revenue for government
- levels of tax frequently tweaked - not good for business prep
+ / - cap and trade
+ benefits those who have been successful in reducing emissions - credible cash flow
- can cause volatile carbon pricing or exogenous shock if oversupply of permits
What are feed in tariffs?
Offer a guaranteed price per unit of electricity generated at which producers can sell for a fixed period of time
Give an example of a sub-national emissions trading scheme
Tokyo - emissions trading scheme since 2010
US Regional Greenhouse Gas Initiative
What is a global coalition of cities dedicated to combating climate change?
When was it established, how many members, how many now?
C40
Established 2005 - 18 members
Now 97 members
What was America’s Pledge
Set up following Trump’s removal of US from the Paris Agreement
25 state governors
500 cities
What does NSA stand for?
Non-State and Subnational Actor
Quantify the impact of NSAs
One assessment (6k+) cities found that implementation of NSA commitments would lower emissions by 3.8% - 5.5% by 2030, national pledges in those 10 national economies
Who was some of the earliest to formulate investment policies with regards to sustainability & ESG
International Financial Institutions (IFIs)
What are MDBs
What do they do
Multilateral Development Banks
Support public sector investment in physical and human capital projects
What do development financial institutions have
Have a double bottom line
When was the first climate bond issued, by whom?
EIB 2007 - Climate Awareness Bond
What did the IFC issue in 2011?
Report on climate risk
Although didn’t categorise by physical / transition risks
Who and when did the private sector go into partnership with to create the Operating Principle for Impact Management (OPIM)?
IFC, 2019
Private financial institutions are replicating parts of the multilateral / development FI model
Give an example
JP Morgans Development Financial Institution
USD $100billion towards UN SDGs
Give examples of ‘green hubs’
- TCFD Consortium of Japan - investor-company relationships
- HK Monetary Authority - Centre for Green Finance
- Singapore Green Finance Action Plan
When did the UK set up a Green Finance Institution?
2019
What is FC4S?
When was it founded?
Who is in it?
Financial Centres for Sustainability
2017
30 financial centres
Between what period did central banks largely incorporate climate into their practices?
2015-2020
Who was NGFS founded by?
How many banks now?
France, Netherlands, UK
89 members now
What is a counter cyclical buffer?
Macro prudential Tool
Would require banks to build up higher equity capital base during periods of carbon intense credit
Would limit banks’ exposure to carbon-intensive assets
Mark Carney’s speech
When
Tragedy of the Horizon
2015
What did the Government do in relation to climate risk and the BoE?
2021 modified bank’s mandate to include environmental goals
Included greening of the economy & net zero 2050
Four key pillars of SS3/19
- Governance
- Risk management
- Scenario Analysis
- Disclosure
What did the FCA find in 2019?
Via audits - ‘very wide range’ of financial products, some which did not appear to have ‘materially different exposues’
FCA developed a set of principles to avoid greenwashing - sustainable funds must be
‘Fair, clear and not misleading’
What is greenwashing
Marketing that portrays products or activities as producing positive environmental outcomes when this is not actually the case
EU Taxonomy was first published in
March 2020
EU Taxonomy sets performance thresholds ‘technical screening criteria’ for economic activities by sector and by sub-sector. Activities must…
A) Make a substantive contribution to one of six environmental objectives
B) Do not significant harm to the other five objectives
C) Meet minimum safeguards (i.e. UN Guiding Principles on Human Rights)
What are some of the doubts of the EU Taxonomy
Some critique the specificity and utility
Political arguments over the inclusion of certain sectors (i.e. nuclear power)
Whether a binary threshold stifles innovation
Which area is going to include natural gas in their own taxonomy
ASEAN
What is the IIGCC
Launch
Members
AUM
Institutional Investors Group on Climate Change
300+ members
Established in 2001
>$40trillion AUM
What is the ‘Investor Agenda’
Consists of IIGCC and x6 other working groups
What did the IIGCC help to found
Climate Action 100+
What is Climate Action 100+
Members / AUM
Founding year
Targets the world’s 100 most heavily emitting companies
Investor coalition with 575 members
$55trillion AUM
Founded in 2017
Who founded the Race to Net Zero
When
UK and Chilean high level climate champions
2020
What were many of the net zero and Paris-aligned financial groupings consolidated under
GFANZ
Previous politicians have been wary of implementing strong climate policies…
What happens now
Stakeholders now pressure and push politicians and policymakers to be more ambitious
When was the TCFD launched
Founding members —> 2021 members
2015 (effective from 2017?)
Founding members; 100
2021 Members: 1000
What is SBTI
Scenario Based Targets Initiative
What is the NZAOA
How many members
What are they committed to
AUM
Net Zero Asset Owners Alliance
37
Aligning entire portfolio with goal of net zero by 2050
$5.7 trillion AUM
What is NZAMI
Net Zero Asset Managers Alliance
What is the NZBA
Net Zero Banking Alliance
Glasgow Financial Alliance for Net Zero is composed of how many financial firm members?
AUM
160+ members
$70trillion
What is GFANZ an umbrella term for?
NZBA
NZAOA
NZAMI
PRI was founded in what year?
How many AUM in founding year vs 2021?
2006
Founding AUM: $6.5tn
2021 AUM: $103tn
TCFD:
Founding assets —-> 2021 Assets
Founding assets; $25tn
2021 assets: $140tn
Climate Action 100+
Founding AUM —> 2021 AUM
Founding: $25tn
2021 Assets: $55tn
