Tipping Point in the March to the Clean Trillion

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Tipping Point in the March to the Clean Trillion

Wednesday, October 8, 2014 - 1:40pm


Watch the video Carbon Tracking Initiative

When I left New York after Climate Week, I felt a sense of hope. The global movement to tackle climate change feels palpably bigger, stronger, and broader than ever before. This year, Climate Week felt like a tipping point, what Malcolm Gladwell defined as “the moment of critical mass, the threshold, the boiling point.”

The week began with 400,000 people in NYC – and citizens in 162 countries – taking to the streets in the largest climate change demonstration in history. But it was not just the usual suspects calling for action. Investors raised their voices too. Nearly 350 investors managing $24 trillion urged governments to put a price on carbon, phase out fossil fuel subsidies, and forge a strong global agreement on climate change by 2015.

Some leading investors took it even further, announcing new commitments to act on climate change and invest in clean energy. These ambitious actions included an initiative to decarbonize investment portfolios, a commitment by commercial banks to issue $30 billion of green bonds by 2015, and an announcement by three major investors – APG, PensionDanmark and CalSTRS – declaring their ambition to accelerate their investments in low carbon assets to a combined $31 billion by 2020. In fact, CalSTRS, the second largest public pension fund in the U.S., plans to more than double its clean energy investments in the next five years.

Institutional investors are also continuing to mobilize on the critical issue of carbon asset risk. During Climate Week, two members of Ceres’ Investor Network on Climate Risk – CalPERS and the New York State Comptroller's office – spoke out about the risks of investing in coal. See the newest report on these risks from the Carbon Tracker Initiative.

But investors weren’t the only “unusual suspects” calling for action and putting their money where their mouths are, so to speak. Leading consumer brands PepsiCo and Kellogg's signed onto Ceres' Climate Declaration, a corporate call to action for strong climate policies that now has more than 1,000 company signatories.

Forty companies, including Kellogg's and Nestlé, announced significant new commitments to reduce and eventually eliminate tropical deforestation from unsustainable palm oil production. The commitments come on the heels of strong investor pressure, supported by Ceres, which helped move consumer brand companies and their key suppliers – Cargill and Wilmar, among those – to curb emissions from one of the most carbon-intensive industries in the world.

Click here for summary of major announcements from the UN.

The announcements made during Climate Week are significant, and lay a promising foundation on which to build. In order to limit global warming to two degrees Celsius and avoid the worst impacts of climate change, the world needs to invest $44 trillion in clean energy by 2050 – an average of more than $1 trillion per year for the next 36 years, known as the Clean Trillion. Global investment in clean energy, however, was just $254 billion in 2013.

One encouraging sign is that global clean energy investment in 2014 is up compared to 2013. In the third quarter of 2014, investment in clean energy grew 12 percent compared to the same period a year earlier, reaching $55 billion. But Michael Liebreich, chairman of the advisory board at Bloomberg New Energy Finance, expressed cautious optimism: “It is heartening to see investment heading for an up-year in 2014… However, there is no room for complacency because clean energy investment of between $200bn and $300bn a year is not large enough to herald the rapid transformation of the power system that experts say is required if the world is to see a peak in CO2 emissions around 2020. There is still too much policy instability holding back investor confidence.”

It is clear that government policy is critical to unleashing investment in clean energy at the speed and scale needed. The next 15 months leading up to the UN climate talks in Paris in December 2015 are crucial. Everyone – including citizens, investors, and businesses – should follow-up on Climate Week by demanding that governments announce strong climate policy targets by the end of the first quarter of 2015.  In the U.S., you can add your voice in support of the EPA Clean Power Plan (the deadline for public comments is December 1, 2014). The EPA Clean Power Plan is essential to the U.S. reducing its greenhouse gas emissions, and strong U.S. commitments will help encourage corresponding action by other major economies.

During Climate Week the people, and the world’s largest investors, made their voices loud and clear: tackling climate change is a moral – and an economic – imperative. Now it is time for all of us to keep the pressure on, and tip governments into action.

My Ceres colleagues and I welcome your thoughts and questions on the Clean Trillion campaign. Please feel free to connect with me at fox@ceres.org or on twitter @ChristopherNFox


Keywords: Environment & Climate Change | CERES | Carbon Footprint | Climate Week | Energy | Environment & Climate Change | Environmental Policy | Finance | Finance & Socially Responsible Investment | carbon tracker initiative | incr