January 17, 2014
Institutional Investors Meet to Discuss Climate Finance
by Robert Kropp
At a conference hosted by Ceres at the United Nations, 550 institutional investors hear climate
scientist Rosina Bierbaum describe the effects of climate change that are already underway. First
of a three-part series.
To achieve the goal of keeping global temperature increases under two degrees Celsius, $36 trillion
in global clean energy investment will have to occur by 2050, a 2012 International Energy Agency
report stated. That amount averages out to approximately $1 trillion per year. However, according
to research by Bloomberg New Energy Finance, only $281 billion was invested globally in clean
energy in 2012.
Furthermore, as Michael Liebreich of Bloomberg told an assembly of
550 financial professionals at the United Nations this week, preliminary numbers suggest that total
clean energy investment in 2013 was even lower.
The institutional investors and other
professionals were at the UN to attend the 2014 Investor Summit on Climate
Risk hosted by Ceres. The day-long event featured representatives of government, business, and
institutional investment organizations; the summit's agenda included presentations on climate
science, the investment implications of stranded fossil fuel assets, and opportunities for
increasing climate finance to the trillion dollar per year amount necessary to avoid the worst
effects of global warming.
The morning session featured a presentation by Rosina Bierbaum,
professor at the University of Michigan and lead author of the US Climate Assessment report. If the investors in
attendance needed any convincing about drastically increasing their commitment to climate finance,
Bierbaum's stark descriptions of a physical environment already in transition due to climate change
The title of Bierbaum's talk was A Perfect Storm. As she described it, the
title could refer either to the effects of climate change or the significant increase in finance
needed to address the climate change. “The future is in our hands,” Bierbaum said.
physics has been known for a very long time,” she continued. In 1896, the Swedish scientist Svante
Arrhenius made one of the earliest observations about the effect of burning fossil fuels on global
climate. “He said,” Bierbaum observed, “that adding carbon dioxide—a gas that traps heat from
burning carbon-based fuels—would increase the temperature of the planet. If carbon dioxide doubled
in the atmosphere, the temperature increase would be about 3 ˝ degrees Celsius. His calculations
have stood the test of time, even with our increased climate modeling capability.”
Bierbaum noted that the Fifth Assessment
Report of the Intergovernmental Panel on Climate Change (IPCC) concluded that the likelihood of
human agency causing climate change is 95% certain. “It is remarkable to get that kind of consensus
from 2,000 scientists,” she said.
“As carbon dioxide has increased due to the burning of
carbon-based fuels, carbon dioxide has risen from 275 parts per million in the pre-industrial era
to about 400 parts per million today,” Bierbaum said. Temperatures during that period have
increased about 0.8 degrees Celsius.
When Bierbaum arrived at the point of her talk when
she talked about the effects of climate change already underway, the urgency that brought so many
financial professionals to the gathering became apparent. “Sixteen of the last 18 years have been
the warmest on the instrumental record,” she said. “And the emerging science consensus is that
negative impacts are starting to increase.”
“Ecosystems are becoming disrupted. Plants are
moving towards the poles or up mountains in response to climate change. Plant hardiness zones are
“Supply chain problems are becoming globalized,” she continued. “Countries that
are already poor and subject to famine and poverty will suffer the greatest impacts.”
Which does not mean that the developed nations, which are responsible for the overwhelming
percentage of carbon emissions, will be immune from the effects of climate change. “By 2050, nearly
a quarter of New York City's land area, which has 800,000 inhabitants today, will be in the flood
plain,” Bierbaum said.
“What will it take to be on the low-carbon pathway to keep the
world's temperatures from soaring to four degrees Celsius?” she asked. “We have to fundamentally
reform our energy systems. We need significant amounts of energy efficiency and next-generation
renewable energy. There is no silver bullet. It can be done but we must start now. The current
public and private investment of $281 billion a year is simply incommensurate. A fourfold increase
to $1 trillion a year can bend business as usual downward and allow us to avoid a roasted world.”
“We need better social safety nets and need to think hard about supply chain resilience.”
“We are more responsible for our own future than any other generation,” Bierbaum
concluded. “Our legacy has to be that 2014 is a tipping point of cascading climate action, starting
with the green trillion dollars that you are all talking about today.”
representatives of government, business, and institutional investment meet with journalists to
discuss strategies for increasing climate finance.