The Importance of Climate Change Action on Turkey-UK Relations

4 Mins read

Guner Husseyin

3 September 2021

Turkey and the UK reached a free trade agreement late last year just before Brexit came into effect. This was a clear signal by both countries showcasing the importance of their bilateral trading relationship which has been growing year on year and now stands at approximately 20 billion Pounds. There are many important industries such as automotive, tourism, textile and food that contribute to these trade volumes with talks already now underway to improve the terms of the FTA to make it more comprehensive for both nations. These industries not only face the challenges posed by COVID-19 but are now faced with the most important challenge of our time, climate change.

This comes at a time where the UK government is preparing to host the UN Climate Conference (COP 26) in November which will be trying to address the impacts of climate change. The UK wants to influence both developing and developed nations around the world to make them follow up on their commitments from the Paris Agreement (2015) and to ensure they go even further on their pledges to help focus the efforts that will keep global warming below the scientifically agreed levels needed to help reach the climate targets that will prevent further devastation caused by anthropogenic factors.

Alok Sharma the UK’s President for COP 26 has recently visited Turkey with his delegation to lay the foundations for a successful conference. The signals following his trip appear to be very positive and show a clear commitment by Turkey who has continued to express that the issue of climate change is high on the agenda. Even though Turkey did not ratify the Paris Agreement in 2015, the renewable energy investment landscape in the country clearly shows that it is ready to lead the way in clean energy and do its bit in the fight against climate change.

Another clear demonstration of the UK’s leadership on climate change matters and the importance it places on ensuring its key trading partners are not left behind has been established with its Climate Finance Accelerator programme. This is a £10m Technical Assistance programme funded through the UK government’s Department for Business, Energy, Industrial Strategy.

The CFA is part of the UK’s concerted efforts to support climate action at scale by providing practical ways to help governments in middle income countries finance and deliver their climate commitments under the Paris Agreement. It does this by helping to identify challenges and blockages that prevent finance from flowing at the volume and speed required to have a meaningful impact on their climate ambitions. Turkey is one of the select few countries who are already benefitting from this programme. David Moran who is the COP 26 Regional Ambassador for Europe, Central Asia ,Turkey and Iran has already solidified the UK’s commitment to Turkey: “Turkey is well placed to benefit from the CFA and the UK is fully committed to supporting Turkey.”

Britain has already established itself as a pioneer in clean technologies including electric vehicle manufacturing and is open to sharing this know-how with its important trading partners like Turkey. The UK’s high-tech capacity with Turkey’s sophisticated manufacturing base has already created opportunities with several high-tech projects in the areas of automotive and aerospace already underway with further investments planned for the pipeline.

London has also proven its credentials for Turkish technology start-ups with the likes of “Getir” (the groceries delivered to your door company) already benefitting from the capital’s financing ecosystem with many more Turkish firms already targeting the city as their new home. However, to continue attracting new capital from London and the occupation authorities, other UK tech hubs, start-up business models must ensure they continue to be in line with increasing investor and end-user demands around sustainability and the environment.

The City of London with its powerful financial institutions such as the Lloyds of London insurance market is also playing a critical role in protecting international institutions and nations like Turkey against the financial implications caused by climate change and the natural hazards that results from it. Turkey is a country which is constantly affected by the forces of nature, with the worst wildfires and floods on record this summer serving as a stark reminder that combating climate change should be at the heart of its ambitions. The impact that these types of events can have on tourism coupled with COVID-19 are just some of the risks that can be mitigated and insured against by the UK’s mighty financial services industry which is also under scrutiny to ensure that their international clients are also doing their bit for the environment before they can deploy their own shareholder capital.

The UK’s investment community will also continue to look for “bankable” green financing opportunities to deploy capital and Turkey could position itself as a leader for attracting new investment if it continues to advance in the direction expected by UK investors which it is already well positioned to do so with the help of the CFA programme.

Turkey and the UK must continue to cooperate on all climate change related matters. Britain’s minister for exports Graham Stuart has already reiterated that working together to address climate change can help further level up trade ties between the two countries; this alone should be a good enough and important incentive.

Author: Guner Husseyin – Risk management professional and a  Certified Professional Banker who has been awarded the Green and Sustainable Finance Professional designation from the Chartered Banker Institute.

The opinions expressed in this article represent the views of the author(s) and do not necessarily reflect the views of the Circle Foundation

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