Tuesday 23 November 2010

Funds urge clear policies on climate

Sydney Morning Herald
Wednesday 17/11/2010 Page: 3

A GLOBAL group of investment funds that control $US15 trillion have urged national governments to adopt strong climate change policies to ensure international investment in clean energy. In a statement to be published today, the group of 258 institutional investors, including HSBC and Allianz, say levels of investment in renewable energy are well below that needed to mitigate rising greenhouse gas emissions.

But if strong domestic policies are implemented, such as emissions reduction targets, energy and transport policies, and the phasing out of fossil fuel subsidies, the trillions of dollars in investment needed by the end of the decade would be sparked, they say. Governments should also ensure strong and sustained domestic carbon prices.

"Investors are concerned with the risks presented by climate change to regional and global economies and individual assets", the statement reads. "At the same time, investors are interested in the large potential economic opportunities that the transition to a low-carbon economy presents".

A recent study by the World Economic Forum found that $500 billion in public and private investment in clean energy is needed every year by 2020 to keep global warming below a 2°C increase in temperatures a crucial threshold that gives the world a strong chance of avoiding the worst effects of climate change.

Global investment in renewable energy last year was $145 billion, rising to an estimated $200 billion this year. The investors' statement says countries that do not have strong domestic climate change policies are missing out on international financing. "Capital is not flowing to low carbon investments in these countries at the scale required because of the lack of investor confidence in their climate and clean energy policy frameworks", it says.

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