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January 15, 2010
Investors Call on Governments to Act on Climate Change Now
by Robert Kropp
Investor groups attending the 2010 Investor Summit on Climate Risk at the UN endorse a statement
calling for climate change policies that encourage private investment.
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Arguing that “investors, businesses, and governments cannot wait for a global treaty before taking
action,” investor groups representing $13 trillion in assets met at the UN this week, and released
the Investor Statement on
Catalyzing Investment in a Low-Carbon Economy, which details steps to take to encourage
investor participation in a low-carbon economy.
The Investor Summit on Climate Risk was presented at the
UN by the Investor Network on Climate Risk
(INCR), a project coordinated by Ceres. In
addition to INCR, the statement was endorsed by the Institutional Investors Group on Climate Change (IIGCC), the Investor Group on Climate Change (IGCC), and the
United Nations Environment Programme Finance
Initiative (UNEP FI).
Attendees at the Summit included UN Secretary General Ban
Ki-Moon, United States Special Envoy for Climate Change Todd Stern, billionaire investor George
Soros, and former Vice President Al Gore.
The investor statement acknowledges that
“incremental progress” was achieved in Copenhagen last month, especially in the commitments to
greenhouse gas (GHG) emissions reduction made by the US, China, and India. However, countries must
“act now to catalyze development of a low-carbon economy and to attract the vast amount of private
capital necessary for such a transformation.”
According to Paul Clements-Hunt, Head of the
UNEP FI, “85% of financing for climate change mitigation will come from private investment.”
However, according to reports from Copenhagen, developing nations refused to allow text referring
to private investment in any agreement, because of fears that such language might lead to less
public investment by developed economies.
Noting that the comprehensive climate change
policies in Germany has led to “eight times more renewable energy jobs per capita than the United
States,” the investor statement said, “Governments must provide clear and ambitious policy signals
to attract international investment and be competitive in the global race to develop and transition
to clean energy and other low-carbon technologies.”
The statement continued, “Investors
will seek every sound investment opportunity, but until governments establish policies and rules
that make low-carbon strategies the clear strategic choice for all businesses, we will not be able
to deploy capital into low-carbon investments at the scale required.”
The statement
provided a number of recommendations for governments to act upon. Developed countries should
establish emission reduction targets of 80–95% by 2050, and developing countries should have clear
action plans for emissions reduction. The statement calls on governments to establish a price on
carbon, and develop carbon markets “that include mechanisms for directing private financial flows
to low-carbon development in developed and developing countries.”
Because energy
efficiency measures have been called “the lowest of the low-hanging fruit,” the statement calls on
governments to accelerate the deployment of energy efficient-technologies, and develop and enable
financing strategies that encourage private investment. The statement also calls for rapid
deployment of renewable energy technologies, investment in new vehicle technologies, and the
development of procurement policies that prioritize energy efficiency, renewable energy, and clean
fuels.
In order to encourage private investment, the statement calls for public financing
mechanisms “that mitigate risk and allow institutional investors to scale up their investments in
appropriate low-carbon solutions, particularly in developing countries,” and dialogue among
national institutions, multilateral development banks, bilateral development institutions, and the
private sector to leverage private-sector investment.
In addition, public-private
mechanisms should be created to help developing countries in adapting to climate impacts.
Finally, the statement calls for mandatory corporate disclosure of material climate-related
risks.
A webcast of the Investor Summit on Climate Risk is available here.
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