Editing Environmental finance (section)

==History==

In 1992, [[Richard L. Sandor]] proposed a new course outlining emission markets at the [[University of Chicago Booth School of Business]], that would later be known as the course, ''Environmental Finance''. Sandor anticipated a social shift in perspectives on the effects of [[global warming]] and wanted to be on the frontier of new research.{{sfn|Sandor|2012|pp=233-236}}

Prior to this in 1990, Sandor had been involved with the passing of the [[Clean Air Act of 1963|Clean Air Act Amendment]] for the Chicago Board of Trade, which aimed to reduce high [[sulfur dioxide]] levels following WW2. Inspired by the theory of [[social cost]], Sandor focused on [[cap-and-trade]] strategies such as [[emission trading]] schemes and more flexible mechanisms including taxes and subsidies to manage [[environmental crisis]]. The implementation of cap-and-trade mechanisms was a contributing factor to the success of the Clean Air Act Amendment.{{sfn|Sandor|2012|pp=210-211}}
[[File:Richard Sandor Head Shot.jpg|thumb|Dr Richard L. Sandor]]
Following the Clean Air Act in 1990, the [[United Nations Conference on Trade and Development]] approached the Chicago Board of Trade in 1991, to enquire about how the market-based instruments used to combat high atmospheric sulfur dioxide concentrations could be applied to the increasing levels of atmospheric carbon dioxide. Sandor created a framework consisting of four characteristics which could be used to describe the carbon market:{{sfn|Sandor|2012|pp=223-231}}

* Standardisation 
* Unit Trading
* Price Basis
* Delivery

In 1997 the [[Kyoto Protocol]] was enacted and later enforced in 2005 by the [[United Nations Framework Convention on Climate Change]]. Included nations agreed to focus on reducing global [[greenhouse gas emissions]] through the market-based mechanism of emissions trading. Reductions averaged approximately 5% by 2012 which equates to almost 30% in reduction of total emissions. Some nations made significant progress under the Kyoto protocol, however as it only became law in 2005, nations such as the [[United States]] and [[China]] reported increased emissions, substantially offsetting progress made by other regions.<ref>{{Cite web |title=What is the Kyoto Protocol? |url=https://unfccc.int/kyoto_protocol |access-date=2023-07-12 |website=unfccc.int}}</ref>
[[File:Kyoto Protocol ratification map 2005.png|thumb|Nations involved in the 2005 Kyoto Protocol]]
In 1999, the [[Dow Jones Sustainability Indices|Dow Jones Sustainability Index]] was introduced to evaluate the ecological and social impact of stocks so shareholders could invest more sustainably. The index acts as an incentive for firms to improve their environmental footprint to attract more shareholders.<ref>{{cite web |publisher=S&P Global |year=2020 |title=DJSI Index Family - Pure Play Asset Management |url=https://www.spglobal.com/esg/csa/indices/djsi-index-family#:%7E:text=The%20Dow%20Jones%20Sustainability%20Indices,convictions%20in%20their%20investment%20portfolios }}</ref>

Later in 2000, the United Nations introduced the [[Millennium Development Goals|Millennium Development Goal]] scheme which sought to promote a sustainable framework for large multinational corporations and countries to follow to improve the environmental impact of financial investments. This framework facilitated the development of the United Nations Sustainable Development Goal scheme in 2015, which aimed to increase funding environmentally responsible investments in developing nations.<ref name=":3">{{Cite web |last= |title=Green Business: Evolution of sustainable finance |url=https://www.sc.com/en/feature/the-evolution-of-sustainable-finance/ |access-date=2023-07-12 |website=Standard Chartered |date=5 February 2019 |language=en}}</ref> Funding was targeted to improve areas such as primary education, gender equality, maternal health, and nutrition, with the overall goal of creating beneficial national relationships to decrease the [[ecological footprint]] of [[developing economies]]<ref name=":4">{{cite web |publisher=UNEP Finance Initiative |date=June 6, 2017 |title=The Evolution of Sustainable Finance |url=https://www.unepfi.org/news/25th-anniversary/timeline/ }}</ref>''.'' Implementation of these frameworks has promoted greater participation and accountability of corporate [[environmental sustainability]], with over 230 of the largest global firms reporting their sustainability metrics to the [[United Nations]].<ref name=":3" />

The [[United Nations Environment Programme|United Nations Environment Program]] (UNEP) has had a detailed history in providing infrastructure to improve the environmental effects of financial investments. In 2004, the institute provided training on responsible environmental credit budgeting and management for Eastern European nations. After the [[2008 financial crisis]], the UNEP provided substantial support for future sustainable investment choices for economies such as [[Greece]] which were impacted severely.<ref name=":4" /> The Portfolio Decarbonisation Coalition established in 2014 is a significantly notable initiative in the history of environmental finance as it aims to establish an economy that is not dependent on investments with large carbon footprints. This goal is achieved through large-scale stakeholder reinvestment and securing long-term, responsible, investment commitments.<ref>{{Cite web |title=What is climate mainstreaming? |url=https://www.mainstreamingclimate.org/what-is-climate-mainstreaming/ |access-date=2023-07-12 |website=www.mainstreamingclimate.org |language=en-GB}}</ref> Most recently, the UNEP has recommended [[OECD]] nations to align investment strategies alongside the objectives of the [[Paris Agreement]], to improve long-term investments with significant ecological effects.<ref name=":4" />

In 2008 the [[Climate Change Act 2008|Climate Change Act]] enacted by the [[Government of the United Kingdom|UK Government]] established a framework to limit greenhouse gasses and carbon emissions through a budgeting scheme, which motivated firms and businesses to reduce their carbon output for a financial reward.<ref>{{Cite web |title=Climate Change Act 2008 |url=https://www.legislation.gov.uk/ukpga/2008/27/introduction |access-date=2023-07-12}}</ref> Specifically, by 2050 it seeks to reduce carbon emissions by 80% compared to levels in 1980. The Act seeks to achieve this goal by reviewing carbon budgeting schemes such emission trading credits, every 5 years to continually reassess and recalibrate relevant policies. The cost of reaching the 2050 goal has been estimated at approximately 1.5% of [[Gross domestic product|GDP]], although the positive environmental impact of reducing carbon footprint and increased in investment into the [[renewable energy]] sector will offset this cost.<ref>{{Cite web |last=Pearce |first=Rosamund |date=2016-12-16 |title=UK Climate Change Act: Understanding the costs and benefits |url=https://www.carbonbrief.org/uk-climate-change-act-costs-benefits/ |access-date=2023-07-12 |website=Carbon Brief |language=en}}</ref> A further implicated cost in the pursuit of the Act is a predicted £100 increase in annual household energy costs, however this price increase is set to be outweighed by an improved energy efficiency which will decrease fuel costs.<ref>{{Cite news |last=Change |first=Extract from The Rough Guide to Climate |date=2011-03-11 |title=What is the Kyoto protocol and has it made any difference? |language=en-GB |work=The Guardian |url=https://www.theguardian.com/environment/2011/mar/11/kyoto-protocol |access-date=2023-07-12 |issn=0261-3077}}</ref>    

The 2010 cap and trade scheme introduced in the metropolitan regions of [[Tokyo]] was mandatory for businesses heavily dependent on fuel and electricity, who accounted for almost 20% of total carbon emissions in the area.  The scheme aimed to reduce emissions by 17% by the end of 2019.<ref name=":5">{{cite web |last1=Talberg |first1=A. |last2=Swoboda |first2=K. |date=June 6, 2013 |title=Emissions trading schemes around the world |publisher=Parliament of Australia |url=https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/BN/2012-2013/EmissionsTradingSchemes#_Toc358272227 }}</ref>  

In 2011 the [[Clean Energy Act 2011|Clean Energy Act]] was enacted by the [[Australian Government]]. The act introduced the [[Carbon tax in Australia|Carbon Tax]] which aimed to reduce greenhouse gas emission by charging large firms for their carbon tonnage. The Clean Energy Act facilitated the transition to an [[emissions trading scheme]] in 2014<ref>{{Cite web |title=The Carbon Tax in Australia |url=https://www.centreforpublicimpact.org/case-study/carbon-tax-australia |access-date=2023-07-12 |website=Centre For Public Impact (CPI)|date=5 May 2017 }}</ref>''.'' The scheme also aims to fulfill the Australian Government's obligations in respect to the Kyoto Protocol and the Climate Change Convention. Additionally, the Act seeks to reduce emissions in a manner that will foster economic growth through increased market competition and investment into renewable energy sources.<ref name=":5" /> The Australian National Registry of Emissions Units regulates and monitors the use of emission credits utilised by the Act. Firms must enroll in the registry to buy and sell credits to compensate for their relevant reduction or over-consumption of carbon emissions.<ref>{{Cite web |title=The Australian National Registry of Emissions Units (ANREU) - Emissions-EUETS.com |url=https://emissions-euets.com/the-australian-national-registry-of-emissions-units-anreu |access-date=2023-07-12 |website=emissions-euets.com}}</ref>

The Republic of Korea's 2015 [[emission trading scheme]] aims to reduce carbon emissions by 37% by 2030. It strives to achieve this through allocating a quota of carbon emission to the largest carbon emitting businesses, resetting at the beginning of the schemes 3 separate phases.<ref>{{Cite web |last=Kim |first=Ellie Jimin |date=2020-03-19 |title=East Asia's First Mandatory Emissions Trading System |url=https://www.climatescorecard.org/2020/03/east-asias-first-mandatory-emissions-trading-system/ |access-date=2023-07-12 |website=Climate Scorecard |language=en-US}}</ref>

In 2017 the National Mitigation Plan was passed by the [[Irish Government]] which aimed to regress climate change by decreasing emission levels through revised investment strategies and frameworks for power generation, agriculture, and transport The plan involves 106 separate guidelines for short and long term [[climate change mitigation]].<ref>{{Cite web |title=National Mitigation Plan - Climate Change Laws of the World |url=https://climate-laws.org/document/national-mitigation-plan_b2c6 |access-date=2023-07-12 |website=climate-laws.org |language=en}}</ref>

The [[European Union Emission Trading Scheme]] concluding at the end of 2020 is the longest single global carbon pricing scheme, which has been improved over its three 5-year phases.<ref name=":6">{{cite report |last1=Laing |first1=Tim |last2=Sato |first2=Misato |last3=Grubb |first3=Michael |last4=Comberti |first4=Claudia |date=January 2013 |title=Assessing the effectiveness of the EU Emissions Trading System |id={{ProQuest|1698743158}} |citeseerx=10.1.1.365.6508 }}</ref> Current improvements include a centralised emission credit trading system, auctioning of credits, addressing a broader range of green house gasses and the introduction of a European-wide credit cap instead of national caps.