Published on January 16th, 2014 | by Tina Casey17
$36 Trillion Push For Clean Energy Investment
January 16th, 2014 by Tina Casey
Oh, the irony. With the devastating coal-related West Virginia chemical spill barely a week behind us, hundreds of leading investment and financial executives gathered at the United Nations for the Investor Summit on Climate Risk on January 15, to focus on the opposite of that: a $36 trillion effort called the Clean Trillion Campaign, to transition the global economy out of fossil fuel dependency and onto a more safe and sustainable path.
The Clean Trillion Campaign is the brainchild of Ceres, the not-for-profit sustainable investor organization which also hosted the Investor Summit on Climate Risk. CleanTechnica was invited to come along so here are some of our takeaways, through the lense of the West Virginia episode.
Adapting Business To Address Climate Change
New York State Comptroller Thomas DiNapoli, who spoke at the event, singled out the US coal industry’s current woes to illustrate how business strategies that are “based on trying to preserve the status quo” are heading into deep trouble, and he urged the fossil fuel industry to “be proactive and adapt.”
Those are lessons apparently yet to be learned both by the company responsible for the spill, Freedom Industries, and the private water supplier affected by the spill, West Virginia American.
To recap the West Virginia spill briefly, last week the chemical Crude MCHM, a foaming agent used to wash coal and other minerals, entered the West Virginia American’s intakes on the Elk River, making its way into homes, businesses, and everything else with plumbing across a nine-county area with 300,000 residents.
The economic damage is still being toted up, but in the meantime it’s clear that long running gaps in federal oversight combined with weak state regulations to form a perfect platform for the Keystone Cops-esque response of the two companies involved, both of which fell far short in the categories of emergency prevention, preparedness, response, and communications (tip: follow Charleston Gazette reporter Ken Ward, Jr. for updates at @Kenwardjr).
Investor Summit On Climate Risk
If the West Virginia debacle represents the status quo, the question is how to get the ball rolling in the other direction. From the investor perspective, that means there has to be a clear path and a level playing field for clean energy investments, which of course translates into legislative action.
Given the political obstacles to hurdle, this is where the Ceres summit could make a real difference.
Former Treasury Secretary Robert Rubin and investor/activist Tom Steyer kicked things off by urging the attendees to think and act like they are the agents of change. Simply put, they asked investors to start talking about climate change to everyone with whom they come into contact, including their elected representatives.
Rubin noted that although more people understand the facts about climate change, they haven’t internalized that information to the point where it translates into action, namely, into political pressure.
Considering the force of the climate change denial movement in the US Congress, we think that’s a bit of an optimistic assessment. Be that as it may, Rubin asserted that business can play a key role in creating pressure for change, as business leaders are members of the “chattering class,” the people who get face time with elected officials and who have a direct impact on policymaking.
Steyer, who is also founder of the organization NextGen, made a complimentary point about reaching individual voters by zeroing in on local issues where their votes have a direct impact on local elected officials and on their US House of Representatives members, “grinding it out on the ground” as he puts it. In his experience, elected officials will respond to calls for change if and only if they think that the change involved is the votes of their constituents.
That’s where business can play a role, by reaching people with their concerns about local issues. As Steyer puts it, “we should ask people in this room to deal in the reality of where we are now and realize the power of business in this conversation.”
The Clean Trillion Campaign
The Clean Trillion Campaign name refers to closing the gap that Ceres has identified between the $36 trillion in transformative investments needed by 2050 to prevent catastrophic climate change, and where we are now.
The campaign provides investors with tools for managing climate risks in their portfolios and investing in clean energy opportunities, while encouraging them to engage with companies on climate change.
Specifically, the campaign contains ten key rallying points:
1. Develop capacity to boost clean energy investments and consider setting a goal such as 5 percent portfolio-wide clean energy investments
2. Elevate scrutiny of fossil fuel companies’ potential carbon asset risk exposure
3. Engage portfolio companies on the business case for energy efficiency and renewable energy sourcing, as well as on financing vehicles to support such efforts
4. Support efforts to standardize and quantify clean energy investment data and products to improve market transparency
5. Encourage “green banking” to maximize private capital flows into clean energy
6. Support issuances of asset-backed securities to expand debt financing for clean energy projects
7. Support development bank finance and technical assistance for emerging economies
8. Support regulatory reforms to electric utility business models to accelerate deployment of clean energy sources and technologies
9. Support government policies that result in a strong price on carbon pollution from fossil fuels and phase out fossil fuel subsidies
10. Support policies to de-risk deployment of clean energy sources and technologies
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