Need to invest in climate prosperity

Need to invest in climate prosperity

The world’s giant pension and institutional funds (university and foundation endowments) are seeing the light on climate issues. As governments wrangle over how to cap carbon and other pollutants, how much it will cost, and who should pay, private investors in North America, Europe, China, India, Japan, and Brazil have been quietly investing in the solution: shifting to low-carbon, cleaner, renewable energy and smarter, more efficient infrastructure and transportation.

The global climate prosperity scoreboard estimates that since 2007, almost USD 1 trillion has already been privately invested in solar, wind, geothermal, hydro, ocean power, more efficient buildings, batteries, energy storage, smart electrical grids, and urban redesign.

Now, the big pension funds and endowments are joining this climate prosperity investing. The Institutional Investor Group on Climate Change (with USD 13 trillion) announced in Sept 2009 that it will lead in shifting its assets toward the real solution to climate change: growing the green economy worldwide.

Their ‘triple bottom line’ accounting for environmental, social, and economic performance enables trustees of these assets to see the longer-term advantage of avoiding obsolete fossilised sectors. Their ethical principles also steer them away from the old formulas maximising short-term returns and using the now-failed ideas of market fundamentalists.

Climate prosperity

The climate prosperity strategy is the ‘win-win’ that all countries attending the Copenhagen Climate Change Conference, December 6-14, 2009, can agree on. The wrangling between the north's industrial countries, whose many decades of burning fossil fuels has caused the climate warming, and the newly developing countries of the south now can be bypassed.

As the private investors have shown, shifting from the fossil fuel age to the information-rich, green economies of the solar age is the greatest opportunity for all countries and all humanity. Billionaire venture capitalist John Doerr says, “we are talking about nothing less than the re-industrialisation of the whole planet.”

There is no shortage of money to finance the global green economy. The only shortage is time, and we have all the technology needed for this transition. Re-deploying just 10 percent of pension and endowment funds away from fossilised sectors, hedge funds, oil and commodities, derivatives, and speculation on interest-rates can add over USD 10 trillion to the USD 1 trillion already invested.

And, if the US, Britain, and other EU countries stop spending their taxpayers' money on bailing out zombie banks, Wall Street, insurance companies, and other failed financial speculators and re-direct stimulus funds to small businesses and local economies, additional trillions can be saved. Meanwhile the big Wall Street bailout recipients, rather than lending to Main Street, are still speculating in derivatives, proprietary trading, and betting taxpayers' funds in the global casino, reaping huge profits and paying executives even bigger bonuses.

Since politicians in the US, Britain, and Europe are too close and beholden to their financial sectors, independent private sector investors are now leading the way. As new funds continue to pour into building the green economy, governments may be shamed into following at least with guarantees.

As a recent report from DeutscheBanke shows, the leading countries for green investors are China, India, France, Germany, and Brazil, while the US and Britain's political inertia make them less attractive. UNEP-FI's 2009 Report on Catalyzing Low Carbon Growth shows how USD 1 of public investment can leverage between USD 3 and USD 15 of private investment.

Those governments that do not oppose their financial, fossil fuel, and nuclear lobbies will lose the race for climate prosperity, wasting billions on futile R&D for ‘clean’ coal carbon sequestration and other un-needed technologies. As David Martin, patent expert, of the innovation firm M-CAM points out, we have already invented all the technologies necessary for the transition to the Solar Age.

While on the advisory council of the US Office of Technology Assessment, I learned how many of these technologies were captured and patented by big fossil fuel and financial companies in order to keep them off the market, as General Motors did with its early electric car. Martin has launched the global innovation commons and inventoried all the needed technologies that are now freely in the public domain.

I have long held that it is unethical to speculate in oil, food, and other vital commodities, as well as forests and land, merely as ‘asset classes’ for big monetary returns. No pension fund or foundation or university endowment should speculate in such vital resources. What better way for such funds to provide for their beneficiaries than to re-deploy their assets into directly stabilising our climate and growing the cleaner, greener global economy for our common human future. Copenhagen may yet see a victory for the planet, people, and common sense.


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