Even if the new U.S. administration abandons the country's international commitments to addressing climate change, it would not stall efforts to reduce global carbon emissions, according to a new report from Moody's Investors Service Inc.
In fact, the credit-rating agency reports that regardless of the changes to U.S. climate policy, "institutional and private sector forces will continue to drive global efforts to reduce carbon emissions."
Since the U.S. election, the vast majority of countries have reaffirmed their commitment to the Paris Agreement on climate change, which reinforces its view that the "adoption of carbon regulation globally will accelerate over the coming years," Moody's notes.
Moreover, the growing global issuance of green bonds demonstrates continued commitments on to the Paris Agreement, Moody's says. Globally, US$93.4 billion worth of green bonds was issued in 2016, up from US$42.4 billion in 2015.
"Extrapolating this level of year-over-year growth could bring 2017 issuance to US$206 billion," the Moody's report says. "Other regulatory initiatives beyond the Paris Agreement will also take effect in the coming years and support the transition to a lower carbon global economy."
In addition, global climate policy is not limited to the Paris Agreement, the Moody's report says, noting the G20 study group on green finance and the Financial Stability Board taskforce on climate-related financial disclosures "suggest that policy momentum on decarbonization and green finance will be sustained."
Corporations and institutional investors are increasingly focusing on carbon emissions reduction and broader sustainability issues, the report suggests: "Strong institutional investor demand for greater sustainability and transparency, coupled with rising climate awareness and changing consumer preferences and technological change, will encourage more private sector companies to pursue explicit climate change strategies."
"Some aspects of climate policy in the U.S. may be altered or dropped under the new administration," says Rahul Ghosh, vice president and senior credit officer at Moody's, in a statement. "Nevertheless, we believe that powerful structural forces at play, including robust institutional and private sector momentum, will continue to drive global sustainable and climate agendas regardless of the direction of U.S. federal climate policy."
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