In the conversation on climate change, there are always terms which remain unclear and confusing. But there is no need to worry.
LetMeBreathe will explain these seven climate change terms that you should know about.
Climate Finance – A term which is used in international conferences and events. But what does it mean? About 95 percent of international public climate finance is provided upfront before a project is operational. However, for active action against climate change, results-based climate finance (RBCF) is needed. RBCF is paid when results are achieved, and occasionally upon meeting interim milestones. RBCF focuses on any milestone that indicates progress toward reducing greenhouse gas (GHG) emissions. Payments are made once pre-agreed targets have been met and, usually, once GHG emission reductions have been verified as real and additional – meaning they would not have occurred otherwise. The emission reductions are retained by the country that has generated them and can count towards that country’s national climate target.
Green Bonds – These are instruments that finance green projects and provide investors with regular or fixed income payments. Climate change threatens communities and economies, and it poses risks for agriculture, food, and water supplies. A lot of financing is needed to address these challenges. In November 2008, the World Bank became the first institution to issue a green bond, raising funds from fixed-income investors to support lending for eligible climate-focused projects.
MRV – Measurement, Reporting, and Verification (MRV) is a multi-step process to measure the amount of greenhouse gas (GHG) emissions reduced by a specific mitigation activity over a period of time. The report of these findings are sent to an accredited third party, which then verifies the report so that the results can be certified and carbon credits can be issued.
Net Zero – It’s probably the most significant and most-heard term these days. Net zero is the reduction of human-caused greenhouse gas (GHG) emissions to the absolute minimum levels. All countries, sectors and companies have a part to play to reduce global emissions.
However, not all countries will achieve net zero at the same time due to differences in capabilities and historic emission levels.
Oceans and Climate Change – The impacts of climate change on oceans are myriad, complex, and interrelated.The changes in the climate are causing serious changes in oceans, including temperature increase, sea level rise, and acidification. All these factors impact ocean health and marine species.
Sustainable Bonds – These are the same as Green Bonds. All World Bank bonds raise funds from investors in the bond markets to support the financing of projects in developing countries. With green bonds, investors can see the positive impact that loans make in climate mitigation and adaptation projects. With sustainable development bonds, the positive impact of the World Bank’s full range of sector and project lending—all of which, by the way, also incorporate climate considerations.
Resilience Rating System – In 2019, World Bank launched the Action Plan on Climate Change Adaptation and Resilience to further support countries’ efforts to adapt and manage climate risk and to build resilience — the capacity to prepare for disruptions, recover from shocks, and grow from a disruptive experience. In January 2021, the Resilience Rating System was being piloted in more than 20 World Bank projects across all regions, covering sectors in human development, infrastructure, and sustainable development.