Without huge reductions in carbon emissions, and the phasing out of all coal burning, the world faces a financial crash several times worse than the 2008 crisis, they said.
The joint statement from investors representing the world’s biggest investment funds was noteworthy. It is the first time so many major investors had joined together to express their fears — and their demands — to governments of the world.
Their solution is simple — they say fossil fuel subsidies must end and substantial taxes on carbon be introduced. But getting agreement to implement their solution will be difficult.
And their role is important, because the most important aspect of fighting global warming is providing the investment capital needed to finance alternative energy sources.
The U.N. climate summit is being held in Katowice, Poland. This week will center on negotiations to make real the vision of the Paris climate agreement. And financing the fight for global warming is a key area of dispute.
“The long-term nature of the challenge has, in our view, met a zombie-like response by many,” said Chris Newton, of IFM Investors, one of the 415 groups that signed the Global Investor Statement. “This is a recipe for disaster as the impacts of climate change can be sudden, severe and catastrophic.”
The group of investment firms said there could be $23 trillion of global economic losses a year in the long term without rapid action. The impact of this would be four times the size of the 2008 global financial crisis.
The group also said that taking action immediately is critical. “Climate change has already started to alter the functioning of our world,” they said.
Thomas DiNapoli, of the New York State Retirement Fund, said taking action on global warming would boost jobs and economic growth. “The low-carbon economy presents numerous opportunities and investors who ignore the changing world do so at their own peril,” he said.
Nicholas Stern, of the London School of Economics added:
“The low-carbon economy is the growth story of the 21st century and it is inclusive growth. Trump’s suggestion that action on climate change is a jobs killer is dead wrong. You don’t create jobs for the 21st century by trying to whistle up jobs from the 19th century.”
A key demand of the Global Investor Statement is to phase out coal-fired power stations across the world. Peter Jensen, the CEO of the largest Danish pension fund, said: “Investors are moving out of coal in droves given its devastating effects on the climate and public health, compounded by its poor financial performance.”
The group of large investors also said that current national pledges to cut carbon would lead to a catastrophic increase in global warming. The said that plans must be dramatically increased by 2020 to avoid a climate disaster.
Hopefully the political and financial leaders meeting in Poland can reach a consensus concerning the seriousness of the climate change issue, and also agree on what to do about it. Time is of the essence, and the future of the world depends on it.
I am a lifelong Democrat with a passion for social justice and progressive issues. I have degrees in writing, economics and law from the University of Iowa.