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UNEP Reports Suggests Changes in World Financial Systems for Human Survival

United Nations Environment ProgramThe United Nations Environment Program (UNEP) has published a report stating that global financial systems should be changed comprehensively by 2035 for the reversal of dangerous changes in climatic conditions and the survival of humanity.

Considering the question of bringing financial systems into alignment with sustainable development, the report advises shift of focus to investments on low-carbon projects. In addition, the report includes World Bank quotes, which estimate that over US$90 trillion will be required during the following 15 years to make a carbon-free future possible.

According to the UNEP report, financial systems fail to properly price risks associated with climatic change. Increase in carbon emissions is dangerous to health and has an adverse effect on food and water quality; and this leads to volatile financial markets and poor economic growth. In Kenya, climate change accounts to as much as 2.4 percent of the GDP.

The UNEP suggests that altering financial systems can greatly assist in the fight against dangerous climatic changes and in ensuring sustainable development. UNEP Executive Director Achim Steiner says:

The globe’s financial systems need to better price pollution and invest in real wealth. It is happening, but nowhere near the scale required. Integrating sustainability criteria that include environment and social factors into the rules that govern the financial system can substantially strengthen the resilience of the world’s financial system, which has been a key goal of governments and regulators since the global financial crises of 2008. If brought to scale, the approximately US$ 300 trillion global financial system could help close the widening gap in sustainable development investment.

The UNEP points out that some of the emerging economies of the world are already setting an example by changing their financial markets to reduce impact of climatic changes. For example, China’s investment into green industries is expected to exceed US$320 billion in the following five years.

Although developed countries are reluctant to realize the impact of climatic changes on financial systems, the Bank of England has published a review exploring impacts of climatic changes on England’s financial system.

UN Framework Convention on Climate Change (UNFCCC) Executive Secretary Christiana Figueres, has chalked out the goal clearly—de-carbonization of economies throughout the world, which can be achieved by pricing pollution better and investing in real wealth. She feels that the UN climate conference, which is scheduled to be held in December in Paris, will serve as the first step “towards the low-carbon, green economy that is everyone’s future”.

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