"The world has avoided this talk for too long": Al Gore at OECD Green Investment Financing Forum

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19 May 2015

LONDON: Today at the Green Investment Financing Forum during Climate Week Paris, the urgent need for public-private partnerships  as well as the state of financial tools necessary to bring forward the low carbon transition  were hot topics for climate and business leaders in attendance, including Al Gore.

The two-day long event in Paris, which will continue tomorrow morning and ends with a half-day workshop, kick-started with remarks from OECD Secretary General Angel Gurria and former US Vice-President Al Gore.

Angel Gurria put a particular stress on the reason why corporates with an interest in green investing keep calling for private-public partnerships. “It is because there are huge misalignments between policies and climate goals,” he stated, “and investment is one of those critical misalignments.”

The Secretary General explained that there are already some innovative tools in existence which can trigger public financing intervention such as green banks and green bonds, but that it is necessary to push them further.

Al Gore started his speech by posing three short but very significant questions that “we are all cast to answer about the climate crisis: must we, can we, and will we change?” The answer to all these questions is and has to be a resounding yes, he said, nodding to recent natural disasters as further impetus as if it was needed, for urgent climate action. 

“Modern nature is now providing us with the definitive answer”, stated Al Gore. “We heard this morning that hundreds were killed in Columbia from mud slides, just like every day around the world people die from downpours, floods and draughts. And the world has avoided this talk for too long.”

But he underscored that action must not only come from those who have always been involved in the environmental challenge: “The answer from the business community and from the technology developers is an exciting yes. We can change and we have an immense capacity to do so." 

Financing clean energy

The roster of high-level speakers then moved on to the sources of low cost capital already available to finance a low carbon transition - and to do so at a profit. Speakers agreed that the debate around the cost of clean energies is changing, and more corporate leaders are acknowledging that clean energies are no longer risk assets. But despite this, the experts said it is still necessary to keep spreading the business case for renewables, especially in developing countries, where clean tech is still a new sector.

However, the dynamic is clearly shifting, as shown by the fact solar energy has reached grid parity in several countries. The growth reflects a simple business rule: the more renewables are deployed, the quicker their prices will drop, and the more they will develop.

To get to that low carbon tipping-point, the speakers asserted that even though the financial tools businesses need already exist, many are calling for new financial mechanisms to support their interest in deploying renewables.

Overall, the discussions highlighted the huge opportunities opened by the green bonds market, the potential of new domestic green banks, and the growing role played by yieldcos. 

A clear feeling that emerged from the day's panel events was that in a very short time span, these discussions will be old - and that the global low carbon economy will be a matter of fact.

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By Denise Puca

Climate Week Paris, which is convened by The Climate Group, takes place from May 18-24, 2015. See the full calendar of events including further Twitter Q&As, by visiting ClimateWeekParis.org

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