World Bank president Jim Yong Kim has urged governments and business to consider bringing new policy reforms to withdraw funding from oil, gas and coal companies and fix a price on carbon to combat climate change.
The reforms should also include promoting an increased investment in green bonds and forcing companies and financial institutions to assess their exposure to climate-related risks and disclose it, Kim said at the World Economic Forum in Davos, Switzerland.
Kim said, "Through policy reforms, we can divest and tax that which we don’t want, the carbon that threatens development gains over the last 20 years."
Governments were urged to fix a price on pollution/carbon through either taxes or market-based instruments and set performance standards for buildings, cars, appliances, transport systems and drive efficiency.
Phasing out of harmful fossil fuel subsidies means directing $1.9 trillion towards supporting investment in clean growth.
Kim has also urged to commit to doubling the green bond market and reaching $20bn this year and at least $50bn by the time of the Paris meeting in 2015.
In addition to this, institutional investors’ portfolios should possess specific significant amounts of green bonds, which fund climate adaptation and mitigation projects including renewable energy, energy efficiency and carbon reduction.
"We have seen great climate leadership from countries and companies, but emissions are still rising, the poor are suffering. This is the year to take action on climate change. There are no excuses," Kim added.
Many top political leaders have supported the divestment to drive emissions cuts at the WEF.
United Nations secretary-general Ban Ki-moon has urged banks and other financial companies to back sustainable energy projects and businesses with low carbon footprints.
Backing the development, Organisation of Economic Cooperation and Development (OECD) head Angel Gurria said the countries should put price on carbon, reform fossil fuel subsidies and address inconsistent energy policies to achieve ‘the zero emissions’ target by 2050.