Global investors to demand climate deal

There is an old adage behind economic development that wherever the money goes, politicians and then planning soon follow.

Take the example of Barack Obama’s election as US president.

This has electrified the planet in more ways than him being the first black man to win the keys to the White House. His pledge for a £150 billion green jobs programme has now whetted global investors’ appetites.

More than 130 leading investors, representing assets worth $6.4 trillion, are warning world leaders that any global agreement on climate change must be strong and binding to guarantee finance for emissions reduction and adaptation programmes.

Moreover, the financial crisis should not delay global efforts to tackle rising temperatures, they warn.

In a joint statement to heads of state and climate negotiators, these investors are demanding a strong, binding framework to succeed the Kyoto Protocol – which the USA is the only developed nation to reject.

They warn that clear and long-term policy signals are essential if investors are to allocate the huge sums of private capital required to fund the transition to a low-carbon economy.

“A strong global agreement will provide companies, governments and investors with the incentives to act quickly and efficiently in tackling change,” said Peter Dunscombe, who chairs the Institutional Investors Group on Climate Change, which helped co-ordinate the statement.

The investors say the global economic downturn should not delay an international agreement to cut carbon emissions by between 50 and 85 per cent by 2050. Such an agreement must be concluded by the end of next year, they argue.
As investors with diversified portfolios, they fear the impacts of climate change on investments in individual companies and other asset classes such as property and the global economy as a whole.

“The climate crisis is a multi-generational challenge that requires strong national and international policies immediately,” says Mindy Lubber, director of the US-based Investor Network on Climate Risk, another co-ordinator behind the statement. “World leaders must shun the excuse that it is too expensive to act to curb global warming. It is too expensive not to act.”

The Obama effect is also being felt across the Atlantic, where Europe’s environment industries are demanding a major action plan to drive the continent out of recession.

The Environmental Industries Commission wants a package of public investment, regulation and tax cuts to stay ahead of the USA. Here, Obama’s policy proposals have particularly ignited its lobbying.

“A sea change in political attitudes is vital to ensure immediate European Union action to steer future investment away from financial speculation and into green technologies,” says the commission’s executive chair Adrian Wilkes. “Europe has only a small window of opportunity if its industry is not to be left behind in the international race to dominate global environmental markets.”


huw.morris@haymarket.com

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