To curb climate change, ‘we need to move everything’: Investors

Tuesday, 19 April 2016 00:03 -     - {{hitsCtrl.values.hits}}

By Laurie Goering

Oxford, England (Thomson Reuters Foundation): Meeting the goals of a new global agreement to tackle climate change will require social change on an almost unprecedented scale, sustainable investment experts said on Thursday.

That includes shifting trillions of dollars each year into renewable energy – up from $ 345 billion last year – and making everything from transport to agriculture and consumer products much greener very quickly.

“This is about scale. It is about timing. It is about scope. We cannot move 500 companies and 200 investors in a few countries. We need to move everything,” said Mindy Lubber, president of Ceres, a US-based business sustainability group.

Failure to make big shifts fast would amount to putting our children and grandchildren in the path of a speeding bus, she told the Skoll World Forum on Social Entrepreneurship in Oxford.

“We would each throw ourselves in front of a bus if it was coming at our child, regardless of our politics,” she said. “We have got to change this debate so people understand... climate change is that bus.”

BUP_DFTDFT-14-2Switching away from dirty fuels will require some key changes to shift investment, among them putting a realistic price on carbon pollution and the damage it is causing



Coal’s days numbered?

Some of that transformation is already underway, said David Blood, a senior partner at Generation Investment Management. Much of the clean energy technology needed is already available, and a surging divestment campaign is persuading investors that keeping money in fossil fuel companies is a growing financial risk.

But while experts predicted the US coal industry is on its way out of business, large-scale investment in coal – one of the biggest drivers of climate change – is still happening in parts of Africa and South Asia, particularly India.

Reversing that by ensuring India and other countries have access to clean technology should be a priority for efforts to hold climate change to manageable levels, they said.

“It’s in the interests of the whole world that India gets (to clean energy) faster,” said Mary Robinson, a former Irish president who runs a climate justice foundation.

But large institutional investors are wary of risk and want clear returns, which can make them hesitant to invest in emerging economies like India, the experts said.

Creating investment tools that work for both those with the cash and those that need it is crucial to drive money to the right places to address climate change, Lubber said.

That must be done in a way that persuades investors who “don’t recognise the urgency of the problem”, said Blood, whose company is one of the world’s largest sustainable investment firms.

If the investment picture has not changed hugely in four years, “we’re in significant trouble”, he predicted.

The UN-brokered Paris climate agreement, backed by 195 countries in December, aims to hold the rise in global average temperatures to ‘well below’ 2 degrees Celsius, with an aspirational limit of 1.5 degrees.

To achieve that, the world needs to be emitting no more carbon pollution than can be absorbed by forests and other planetary systems in the second half of the century.

The Paris deal “sends a signal to investors, sends a signal to consumers, sends a signal to everyone in the world... that fossil fuels have a very limited lifespan now”, said Thom Woodroofe, a climate policy advisor for Independent Diplomat.


Unburnable reserves

But switching away from dirty fuels will require some key changes to shift investment, experts said, among them putting a realistic price on carbon pollution and the damage it is causing – from worsening storms to agricultural losses.

Setting a workable carbon price ‘is one of the single most important things’ that needs to be done, Lubber said.

Another is to shut down fossil fuel exploration, given that two-thirds of the reserves already discovered can never be burned under the new Paris agreement, the experts said.

Former US Vice President Al Gore, who spoke at the Oxford forum this week, put the value of unburnable fossil fuels at $ 22 trillion.

Investment in fossil fuel exploration is already down over the last five years, from $ 650 billion a year to $ 400 billion, Lubber said. But some of that decline is the result of dramatically lower oil prices and companies are still seeking oil in places from the Arctic to Canada’s tar sands.

Still, the fossil fuel divestment campaign “has forced the question of what is a profitable company”, Lubber said.

“Five years ago you didn’t see analyst reports on the financial strength of the fossil fuel industry. Now there are hundreds of those. The debate has changed,” she added.

Equally important will be helping many more people understand that climate change is something that needs action at home, in politics and on the streets, experts said.

When 400,000 people marched to call for stronger policies on climate change in New York last September, with thousands more on the streets of other cities, “it changed the debate, it changed the news media. We need to see that times a thousand around the world,” Lubber said.

From today, “everyone has to take this personally”, Robinson said. “We need a movement that says, ‘This is too important to be left to the government and the United Nations and business’.”

UN panel to study a cap on global warming that may be out of reach

Reuters (Oslo/London): Top climate scientists will launch a study this week of how hard it would be to limit global warming to 1.5 degrees Celsius (2.7 Fahrenheit), although many of them fear it might be too late to reach that level.

The world’s average surface temperatures reached 1C (1.8F) above pre-industrial times in a record-hot 2015. They will rise by 3C (3.6F) or more by 2100 if current trends continue, many projections show.

A 195-nation climate summit in Paris in December asked the U.N.’s Intergovernmental Panel on Climate Change for a report in 2018 on limiting warming to just 1.5C. The IPCC began a three-day meeting in Nairobi on Monday to consider how to do that.

“Do we know how? No. It is definitely a moon shot,” Christiana Figueres, the U.N.’s climate chief, said at a conference in London on Monday.

Paris set a goal of limiting average surface temperatures to “well below” 2C while “pursuing efforts” for 1.5C. Documents prepared for the Nairobi meeting say scientific literature about 1.5C is thin.

Many scientists have barely focused on the 1.5C goal, reckoning it would require unrealistically deep cuts in emissions. Experts say the IPCC will comply with the Paris request, with misgivings.

“I don’t seek how they can say ‘No’,” David Victor, a professor of international relations at the University of California, San Diego, told Reuters. “But I don’t see how they say ‘Yes’ with a straight face.”

Some IPCC studies suggest 1.5C will be feasible if the world develops low-cost technologies later this century to extract greenhouse gases from the atmosphere.

Many poor nations, fearing melting ice that will raise sea levels and swamp their coasts, campaign for “1.5 to stay alive”.

“My concern is that the 2018 report may have lots of information about how hard it will be to achieve 1.5C, and relatively little about the benefits,” Myles Allen, a professor at Oxford University, told Reuters.

He noted that countries pushing hardest for the 1.5C limit, including small, low-lying island states such as the Marshall Islands or the Maldives, wanted to stress the advantages.

Limiting warming to 1.5C rather than 2C would limit, for instance, sea level rise, the melt of Arctic sea ice, damage to coral reefs and the acidification of the oceans, according to IPCC studies. (Reporting By Alister Doyle, editing by Larry King)

UN panel to study tough 1.5C limit on global warming

  • Coral, sea levels seen vulnerable even with slight warming
  • IPCC to study risks of 1.5 degree Celsius warming
  • V20 developing nations urge more action for 1.5C ceiling 

Reuters: The UN’s panel of climate scientists agreed on Thursday to study how to limit global warming to the toughest target suggested by world leaders, saying even small rises in temperatures could be harmful.

The panel would look into ways to restrict the rise in temperatures to 1.5 degree Celsius (2.7 Fahrenheit) above pre-industrial times after a 195-nation summit in Paris agreed in December to try and phase out net greenhouse gas emissions this century.

Hoesung Lee, chair of the UN’s Intergovernmental Panel on Climate Change (IPCC) said there were ‘serious risks’ with even minor rises in temperatures from current levels, for instance to coral reefs and to coasts from rising sea levels.

‘There was not much scientific research on this topic’ when the IPCC last issued a major overview of the risks of global warming in 2014, he told a webcast news conference from Nairobi.

The IPCC would issue the 1.5C report in 2018 and two other special climate reports in coming years, one on land, desertification and food security and another on oceans and the world’s icy areas, he said.

The December 2015 summit asked the IPCC to come up with a report about 1.5C, a level scientists reckon would demand drastic cuts in greenhouse gas emissions..

In Washington, finance ministers from a group of developing countries vulnerable to climate change, from Afghanistan to Yemen, urged developed nations to make the global financial system more compatible with the 1.5C goal.

“We see the financial system as a weapon to fight climate change with tremendous potential,” Cesar Purisima, secretary of finance of the Philippines and head of the Vulnerable 20 (V20) group, said in a statement.

The V20 said its members planned to adopt domestic carbon pricing systems within 10 years and called for an international tax on financial transactions to help fund efforts to slow climate change and adapt to rising temperatures.

Last year, average global surface temperatures hit the highest since records began in the 19th century, about 1C above pre-industrial times.

Lee said the IPCC would also issue an overall report about the risks of climate change in 2022, in time for a scheduled global review in 2023 of governments’ plans for fighting climate change.