The Climate Chief of the United Nations, Christiana Figueres has stated that around $1 trillion is required every year in terms of investment in the renewable energy sector. She has urged financial institutions from all over the globe to increase their investments to reach a sum of $1 trillion every year, which is the only solution that can help in averting a climate disaster. In an exclusive interview which she gave to the Guardian in the UK, Christiana Figueres stated that it is important that global financial institutions begin to construct the foundations of an economy that is based on clean energy, primarily by increasing their investments.
At present, the global investment that is made in the clean energy industry is around $300 bn every year. However, according to Figueres, that figure is nowhere near the required mark. She stated that from the current point, the global investment needs to triple in size, and it would be best if this change was brought about in the next five to ten years. However, she stated if not during this period of time, it would be most viable to increase the investment by 2030, because after that the climate scenario might begin to change. Four years ago, in a public announcement that was made by the International Energy Agency, it was revealed that a yearly investment of $1tn was required in new infrastructure projects by the year 2030 which would help in making the transition from an economy that is based solely on coal and oil and moved towards cleaner technologies and fuels which would help in keeping the climate warming below the threshold of 2 degrees, which is still standard. However, if nothing changes, it is likely that a change of around 4 degrees will occur, which could be horrific in the long run.
However, even though the information from the International Energy Agency was revealed four years ago, investment hasn’t really caught up as yet. As stated by Figueres, globally, we are way behind the required amount of investment that is needed to stay within 2C. In a meeting that has been arranged by the Ceres investment network between Figueres and some other top Wall Street figures at the United Nations, they will try to urge global investors to step up their investments in the renewables energy sector in order to minimize the impact on the climate.
Already a number of countries have begun to take notice of the rising carbon emissions. Global emissions are rising, and countries have been asked to make changes. Australia, for instance, announced the carbon tax, which, even though abolished, did manage to make an impact in bringing down the overall emissions. The United Kingdom, on the other hand, is taking a slightly different approach. The country is slowly and gradually decreasing its dependency from coal and gas fired power stations and moving towards renewable energy. The Government has been backing private investment into the sector, and has actively helped by announcing numerous subsidies for companies in the wind and solar sector.
Only recently, the One Million Rooftops campaign was announced by the Solar Trade Association. The One Million Rooftops Campaign aims to install one million solar PV systems on rooftops all across the United Kingdom by the year 2015. At present, there are around 416,000 houses within the United Kingdom that are deriving their power directly from the sun. Similarly, numerous subsidies are also in place for those companies which are currently investing in the wind sector. Both on shore and off shore wind farms are of vital importance to the renewable industry within the United Kingdom, and even though government has been quite vocal against wind power as of late, it still hasn’t reneged on any subsidized plan as yet.
New plans have been announced all around the United Kingdom for the construction of onshore wind farms, while investments have also been made into the research category, in order to increase the overall efficiency of wind turbines. At present, most of these turbines are able to produce only around 30% of the total energy that they should be producing.
On the face of it, the largest investors in the renewable industry market, generally foundations, insurance companies, investment managers and pension funds, control a total of around $76 tn in assets, as per the figures revealed by the Organization for Economic Cooperation and Development. However, as per the estimates revealed by Christiana Figueres, these investors were putting less than 2% of the funds that they were controlling into the infrastructure of clean energy. Compare this to the ten and fifteen percent that was going into the coal and oil industry and you understand the problem. She stated that in the past year, the total amount of investment made in the exploration and mining of fossil fuels was around $600 bn, which is double that of the renewable industry. As a result, it is obvious that the ratio isn’t right. She stated that we need to overturn this ratio in order to actually keep the climate in check.
She also stated that in order to make her point to the global investors, she was going to show them the investment opportunities that were available in the clean energy industry, while simultaneously showing the risks associated with investing in the coal and oil industry. The climate panel of the UN, known as the Intergovernmental Panel on Climate Change stated for the first time that a set amount of carbon could be burnt in order to stay within the warming of 2C. Around half of that budget on carbon has already been expended, which ultimately means that most of the coal and oil that is currently present cannot be burned without crossing in to the dangerous warming sectors. Figueres stated her fears by saying that, in her mind, there was no doubt that in order to remain within the 2C warming mark, most of the fossil fuels would have to remain within the ground.