The world risks economic crises larger than the recent global financial disruption unless governments, policy-makers and delegates to the forthcoming United Nations conference on climate change take action to combat global warming, major investors warned today.
Nearly 260 investors from Asia, Africa, Australia, Europe, Latin America and North America, who collectively have assets valued at $15 trillion, said in joint statement that the potential climate-related gross domestic product (GDP) losses could soar up to 20 per cent by 2050 as a result of climate change.
Citing the economic benefits of shifting to low-carbon and resource-efficient economies, they called for national and international policies that will spur private investment into green technology.
“We cannot drag our feet on the issue of global climate change,” said Barbara Krumsiek, Chair of the UN Environment Programme (UNEP) Finance Initiative and Chief Executive Officer of the United States-based Calvert Investments. “Calvert is deeply concerned about the devastating impacts climate change – if left unaddressed – will have on the global economy,” she said.
The statement was released ahead of the climate change conference in Cancún, Mexico, which will open on 29 November with the world trying to agree on a new international climate change regime to succeed the Kyoto Protocol to the UN Framework Convention on Climate Change (UNFCCC) under which industrialized countries committed themselves to a reduction of greenhouse gases.
While low-carbon global investment is increasing, especially in Asia, the investors said more private capital would be available for renewable energy, energy efficiency and other low-carbon technologies, if stronger policies were adopted.
They said that global clean energy investment is expected to rise to $200 billion this year, which is far less than the roughly $500 billion that Bloomberg New Energy Finance and the World Economic Forum says is needed per year by 2020 to restrict global warming to below 2 degrees.
North America lags well behind Europe and Asia in clean energy investment, having committed $20.7 billion in renewable energy projects in 2009, compared to $43.7 billion for Europe and $40.8 billion for Asia, according to a recent UNEP report.
“A basic lesson to be learned from past experience in renewable energy is that, almost without exception, private sector investment in climate solutions has been driven by consistent and sustained government policy,” said Ole Beier Sørensen, chairman of the Institutional Investor Group on Climate Change and chief of Research and Strategy at the Danish pension fund ATP.
“Experiences from countries such as Spain, Germany and China show how structured policies can bolster investor confidence and help drive renewable energy investments,” he added.