The Columbia Climate School is excited to announce a hybrid professional learning workshop this fall: Climate Finance: The Challenges of Transitioning from Funding Climate Change to Funding Net-Zero.
Building on the momentum of a successful spring session, this workshop examines the challenges and opportunities of mobilizing trillions of dollars in climate finance to meet the goals of the Paris Agreement, focusing on the transition from funding fossil fuels to supporting net-zero efforts. It covers a wide range of topics, including the roles of governments, private sector actors, financial instruments, market failures, ESG and the policies needed to drive the global financial shift.
In our interview with the course instructors, Paul DeNoon, senior advisor of executive education at the Columbia Climate School, and Joseph (Gerry) Paul, lecturer for the M.S. in Sustainability Science program at the School of Professional Studies, we learned more about the complexities of climate finance, the use of financial tools and incentives and the importance for engaging participants from every sector in discussions on financing the transition to net zero.
(Right) Paul DeNoon brings the knowledge and experience of the financial markets gained over a 35-year career as an analyst, portfolio manager and leader in corporate responsibility. During his career at AllianceBernstein, he built the firm’s efforts in emerging market debt and led its global, multi-sector, fixed-income investing team.
Could you give us an overview of the key challenges and opportunities in mobilizing trillions of dollars annually for climate action? What are some of the most critical barriers to achieving the goals of the Paris Agreement in terms of financing?
Paul: In this workshop, we consider climate finance to be the study of how global pools of capital will get applied to climate problems and opportunities. We want to understand how we can encourage the use of capital to solve climate problems and how we can influence the order of project funding to get our desired results.
Stimulating and influencing the flow of capital toward decarbonization of the world’s economy is a daunting problem. First, we have to acknowledge that the overwhelming majority of greenhouse gas emissions are the byproduct of economic activity, most of which is for profit. Further, those of us who are currently profiting from the emission of greenhouse gases do not share proportionately in the costs and damage that climate change creates. This misalignment is a significant barrier to progress.
We also need to understand that almost all the investments necessary for mitigation and adaptation must be evaluated economically because most of the capital available seeks a competitive return. Some of those investments will be profitable and others designed to avoid losses. We also have to understand that there’s a misalignment between where these projects reside and where global capital resides. Profitable projects in areas with access to money are easy to implement, but projects that avoid loss in areas without access to capital are a major challenge.
You cover a wide array of financial instruments in the course, from green bonds to ESG/impact investing. Is there one silver bullet? In your opinion, which tools are currently the most underutilized, and which show the greatest potential to mobilize large-scale funding for climate action?
DeNoon: There is no silver bullet. The fixed-income markets are needed for large-scale deployment of solutions and the public sector and philanthropy must play a larger role in de-risking investments. This is an acute problem in the emerging market and developing economies.
What policy shifts or financial incentives do you believe will be most effective in driving climate finance toward achieving the 1.5°C target? Are there particular regions or economies that are leading the way in this effort?
Paul: Changes in policy and introduction of financial incentives need to be aligned to encourage the removal of carbon from the economy and the removal of carbon from the atmosphere. Broadly speaking, there are two kinds of policies and incentives: carrots and sticks. Carrots provide positive financial incentives, like subsidies or tax credits, for changes in behavior that reduce carbon emission. Sticks are regulatory changes that impose penalties, a carbon tax for example, that discourage or prohibit the emission of carbon. We’re going to need both, and choosing the correct one depends on what else policymakers are trying to accomplish.
Further, we have to remember that not all participants in the global financial system will share the same values and goals. Solving our climate problems requires global cooperation so we must consider all policies and changes in a global context. Finally, all policy changes are created and implemented, and enforced by political systems.
You emphasize that participants will play an active role in the debates and discussions surrounding climate finance. How do you plan to encourage this active engagement, and what kind of debates do you expect to arise during the workshop?
Paul: We would like the sessions to be as interactive as possible. We welcome and encourage questions conversation and debate and build time into each session for interaction. If there are areas there the group feels like more discussion is warranted, we can adapt the schedule. In past sessions, we’ve had participants from a wide variety of backgrounds, experiences and geographic locations. We have found that such diversity led to the sharing of ideas that benefited us all.
The workshop is designed for those without prior knowledge of finance. What strategies will you use to make complex financial topics accessible and engaging for participants from diverse backgrounds?
Paul: We hope that this course will be accessible to all: those without any financial background, as well as those with great experience in the financial markets and economic systems. We understand that not everybody enters with the same degree of understanding and background, and we spend some time at the beginning of the sessions to remind everyone of some fundamental principles of the financial markets and economics that make subsequent material richer and more impactful.
What motivated you to design this workshop? How does it align with the broader mission of fostering climate action, and what do you hope participants take away from it?
DeNoon: The goal is to get participants to take a systems approach to climate finance. There is too much focus on the tools, allowing many in the financial markets to fall prey to ‘Maslow’s Hammer,’ a cognitive bias that involves an over-reliance on a familiar tool. Achieving net-zero will take a transformation in the global economy, and financing this will require a transformation in the global financial markets.
The Professional Learning programs are meant for working professionals and adult learners who want to develop new skills and explore new topics to further job-related interests, without the long-term commitment of a degree program. These offerings will help participants develop an understanding of climate and sustainability challenges through the expertise of Columbia faculty, practitioners, researchers and staff. This workshop will be offered in a hybrid format. For participants that opt into the virtual format, we will be using Zoom. Local participants that are interested in attending in-person will convene at the Forum (125th and Broadway in NYC). Upon completion, participants will receive a certificate of participation from the Columbia Climate School.
For more information about the Climate Finance workshop, please explore our webpage and the information session recording. In the meantime, please sign up for our Professional Learning mailing list here to receive future updates about our offerings. Alternatively, please contact the program team with any questions.
Register today for the Climate Finance: The Challenges of Transitioning from Funding Climate Change to Funding Net-Zero Professional Learning Workshop!
