International business leaders are calling for immediate action during the United Nations Climate Change Conference (COP-16) and the World Climate Summit (WCS) that are both set to begin on November 29, 2010 in Cancun Mexico. A group of global investors with collective assets worth more than $15 billion are asking global leaders to “take action now in the fight against global warming or risk economic disruptions far more severe than the recent financial crisis.”
The group is pushing for the passage of policies that limit carbon and spur the development and growth of low-carbon technologies. In a statement they cite potential climate-related GDP losses of up to 20 percent by 2050 and highlight the economic benefits of shifting to low-carbon and resource-efficient economies.
However, there is little hope that global policies will be passed, and less so that they will be enforced, in part due to the hesitation of the U.S. government in passing any policy to limit CO2 emissions such as cap and trade.
According to Mindy Lubber, president of Ceres, an organization representing investors and environmentalists, “Current investment levels fall well short of what is needed to stem the rise of global temperatures and adapt to a warming world. Strong government policies that reward clean technologies and discourage dirty technologies are essential for closing the climate investment gap and building a low-carbon global economy.
California scored a minor victory during the November elections when Prop 23, a regulation that would in essence have undone California’s environmental and low-carbon policies was defeated. Those supporting Prop 23 wanted green polices scaled back claiming that the companies footing the bills to install low-carbon technology would go bankrupt and employees would lose jobs – the opposite of what policy makers are aiming for during an economic recession.
Yet despite California’s victory, at the federal level, all things green have hit a roadblock.
“Climate change may be out of vogue in Washington today, but it poses serious financial risks that are not going away and will only increase the longer we delay enacting sensible policies to transition to a low-carbon economy,” said Jack Ehnes, chief executive officer of the California State Teachers’ Retirement System, the nation’s second largest public pension fund with $141 billion in assets and one of the groups who signed the statement.
Ehnes continued, “The nation’s leaders should take the cue from California, where strong clean energy policies have spurred American innovation and created thousands of jobs.”
The negotiations in Cancun are the next in a series designed to approve a new international climate change treaty once the Kyoto Protocol expires in 2012. Without the treaty, or in the U.S. without effective, long-term federal environmental policies, investments in clean tech will continue to lag. All green industries have been calling for more private capital to ensure renewable energy, energy efficiency and various other low-carbon technologies make it to market.