In advance of the UN climate conference in the Big Apple, a number of ethical investment groups representing more than $13 trillion in assets have called for climate leadership from the world’s industrial nations. At the International Investor Forum on Climate Change, a coalition of 181 investors expressed confidence that a strong and binding international treaty is vital to combating global warming and catalyzing the massive global investments needed to transition to a low-carbon world.
“We must chart a new course toward long-term, sustainable business practices,” said New York State Comptroller Thomas P. DiNapoli, head of the $116.5 billion New York State Common Retirement Fund. “We cannot drag our feet on the issue of global climate change. I am deeply concerned about the investor risks climate change presents, and the human cost of inaction is unthinkable. As investors in the global economy, we can lead the way toward a future of lasting prosperity.”
Economists from across the pond feel just as strongly.
“Unmitigated climate change poses a threat to the global economy,” said Lord Nicholas Stern, Chair of the Grantham Research Institute on Climate Change at the London School of Economics. “But building a low-carbon economy creates opportunities for investment in new technologies that promise to transform our society in the same way as the introduction of electricity or railways did in the past.”
Lord Stern, a former Work Bank Chief Economist with a resume as long as my arm, is the author of the now-famous Stern Review on the Economics of Climate Change which issued a social, corporate and legislative call to climate action in 2006. That bleak report, which was described by many as alarmist and which created all manner of controversy among fiscal conservatives in Gordon Brown’s cabinet, suggests that global warming is the great failure of the free market system, and that rich nations must dedicate 2 percent of GDP* to transition our world to a low-carbon economy. Stern argues that if we wait 15 or 20 years, we can expect to pay 20 percent of GDP for our sins, but results won’t be pretty, and many will suffer.
“In answering those who question why the U.S. should adopt strong climate change policies, it’s not strong enough to say we have an obligation,” said California State Treasurer Bill Lockyer. “We owe a duty to all those who come after us to act now. If we fail to lead, if we adopt the attitude that we’re not going to act until enough other nations act, we will violate that duty. And we will run an even greater risk of leaving future generations a damaged planet and diminished hopes for prosperity.”
*Stern originally argued for a 1 percent of GDP investment in mitigating climate change, but doubled that figure in 2008 based when more-recent climate studies suggested that the IPCC Fourth Assessment Report was already out-of-date, and that climate change was barreling along much faster than predicted.