In the final week of the COP23 UN climate conference in Bonn Germany, Jack Aldane met with Amal-Lee Amin, head of climate change and sustainable investment at the Inter-American Development Bank (IDB), to discuss how IDB intends to strengthen Latin American economies’ climate agendas, and how the bank is working with ministries of finance to coordinate efforts at a national and sub-national level.
How have you found COP23 over the past fortnight?
It’s been good. Given the logistics I’ve been mainly in the Bonn Zone. There’s a real buzz there. I think there’s definitely a sense that there’s been lots of progress on the ground in developing countries, lots of interesting private sector initiatives coming forward. That, for me, represents the real economy side of where we are with this agenda, in that there is a huge amount happening on the ground in most countries. Some are more advanced than others, but all our countries in Latin America and the Caribbean are now focused on how to implement the Paris Agreement. Many are recognising that their nationally defined contributions may need to be enhanced in order to reach two degree Celsius and that they are moving towards increasing ambition over time. Countries are engaging with us to access resources, whether technical assistance to strengthen their institutional arrangements, or concessional resource to bring forward investment.
You suggest there’s some kind of spectrum of progress among developing countries and, from where you stand, within Latin America also. How do they rank against each other?
There are clear leaders within the region, but those countries who have shown a lot of leadership on the climate agenda for around ten years now include Mexico, Columbia, Peru, Brazil, Chile and Costa Rica. All these countries are moving ahead in renewable energies and energy efficiency, as well as placing focus on reducing deforestation and, importantly, on the drivers for deforestation. In addition to being advanced in an institutional context, their financial sectors have had some degree of exposure to either low-carbon investment and energy efficiency. There’s probably a lot less exposure to the climate resiliency agenda, although that’s rising up the agenda, not least because of the G20 report from the Financial Stability Board task force. I also think that more and more countries recognise the importance of moving beyond nationally defined contributions and looking towards the 2050 decarbonisation pathways.
With the close of 2017 on the horizon, how is the Inter-American Development Bank’s climate strategy taking shape for the foreseeable 12 to 18 months?
We’re working in several countries – Costa Rica, Argentina, Columbia, Peru, Brazil and Ecuador – to develop the in-country capacity to forge long-term decarbonisation pathways. I think over the next year or two, we’re going to see these countries developing strategies that bring together the jobs and trade and investment agendas with the climate agenda. Similar to the way in which the UK has its new Clean Growth strategy, bringing growth and climate action together. I represented our president on some of the technical discussions on the advisory group for the OECD’s Investing in Climate, Investing in Growth report. That for me was quite a seminal report: at the launch in Berlin many people felt this was the first big report around economics and climate since the Stern report. From the OECD perspective, it was the first time they had brought together their growth teams with their climate and environment teams. They have identified sustainable infrastructure as a key part of moving forward with both growth and climate action. I think we’re going to see many more countries recognising that that is what they really need.
Have you picked up a change in tone or atmosphere around the United States’ withdrawal from the Paris Agreement since COP22 in Marrakesh last year in the days following the US presidential election?
I would say there’s been relatively little change to the climate agenda from the regional perspective. I think the momentum coming out of Paris was really great. The fact that our governors, including the US, agreed to double our climate finance portfolio by 2020, and then the fact that the Paris Agreement was ratified so quickly, actually reinforces that momentum that led to such an ambitious Agreement. I think that, countries will increasingly look to ensure that their economic agenda is closely aligned with their climate agenda, which they need to do anyway and will be looking to strengthen partnership around this.
You’ve had an extended opportunity at COP23 to listen to and engage with a wide range of peers beyond the ordinary confines of your institution. Has any of it made you question your own wisdom, or perhaps the direction in which certain conversations have gone?
I think that, for me, a lot of what we’re doing now, and a lot of the discussions that have taken place here in the Bonn Zone, really need to happen at the country level. It’s important to go beyond having an international conversation , which can be very valuable in sharing knowledge and building high-level political momentum. But, to really see action on the ground, to see projects and finance flowing in countries, we have to take it down to the national level, and importantly also to the sub-national, and city levels. That’s where we at the IDB Group are focused.
We’re a very country-driven organisation, and we have a very close and trusting relationship with our countries in Latin America and the Caribbean. I think that a lot of what we’re working on with those countries has started to emerge here in a positive light. When we launched our NDC Invest platform last October, we thought we might just move forward with a small number of countries initially. However, the level of demand has taken me by surprise We’ve already formal requests by 12 countries, which means a letter from each ministry of finance, asking us to work with them. It’s surprising because, maybe 12 months ago, there was maybe an assumption by some that national defined contribution implementation would perhaps only start in 2020, that countries weren’t going to move quickly. What we’re seeing now is an acceleration among countries wanting to build the institutional capacity and bringing project pipelines forward and to mobilise finance. Actually, I think this year feels like we are where we need to be.
Could you tell us a bit more about the work you are doing with Latin American ministries of finance on their climate agenda?
We have different way of engaging, depending on the countries. In the case of Chile, the country’s national defined contribution has a specific commitment to the development of climate strategy, with a launch planned for 2018. So, we’re supporting the ministry of finance with that. We have consultants working inside the ministry with the person responsible for all the financing needs of the country, and what may be needed to help mobilise additional finance, particularly from Chile’s own capital markets. In Jamaica, Ecuador, Guatamala, we’re looking to integrate the nationally defined contribution into the budget, and also looking at how these countries can better assess climate risk in terms of their public investment agenda. In the case of Columbia, we have an interesting flagship initiative called Sustainable Columbia launched in Paris in 2015. It’s linked to the peace process, in that it focuses on rural areas coming out of conflict, which, as they come out, are reclaiming their land on the border of the Amazon, which has huge potential for deforestation. We’ve worked with the ministry of finance primarily on what I refer to as a strategic investment framework for promoting those rural sustainable development practices in those regions. That’s recognising that the finance ministry has a real ability to lead that agenda and promote and ensure collaboration between agriculture and environmental ministries, between transport and energy ministries. That doesn’t happen easily in any government, and that’s partly why we see the ministries as essential for driving forward the climate agenda.