Figueres urges investors to back RE

The United Nations climate chief Christiana Figueres has urged institutional investors to shift their portfolios away from fossil fuels such as oil and coal, towards promoting cleaner energy such as renewables and greater energy efficiency.

Figueres, executive secretary of the UN Framework Convention on Climate Change, told an investors' conference at the United Nations that their investment decisions should reflect the latest scientific evidence of dangerous climate change to protect the health and financial savings of ordinary citizens well into the future.

She said that the switch to greener investments is essential to tackle climate change. “The continued and dangerous rise in greenhouse gases in the atmosphere is in large part the direct result of past investments in energy and mobility systems based on the use of fossil fuels.”

Figueres says new investments must help reverse “this unsustainable trend, and quickly, if the world is to have a chance of staying under a 2 degree Celsius temperature rise."

International climate negotiators agreed at the 2009 UN climate conference in Copenhagen that global warming this century shouldn't increase by more than 2 degrees Celsius to avoid the worst impacts of climate change.

According to the International Energy Agency, $36trn of global investment will be needed in clean energy by 2050 to meet this goal — which amounts to $1trn a year.

Figueres says that in 2012, about $600bn was invested in exploration and extraction of fossil fuels, double the investment in clean energy.

In addition, she says, governments are estimated to be subsidising the consumption and production of fossil fuels worldwide by between $600bn and $1trn annually.

Figueres says the lower level of investment in clean energy isn't surprising “because we have built the global economy for 150 years on the back of fossil fuels.

“The pensions, life insurances and nest eggs of billions of ordinary people depend on the long-term security and stability of institutional investments funds,” she says.

“Climate change increasingly poses one of the biggest long-term threats to those investments and the wealth of the global economy,” she adds.