Written By: Emma Websdale
United Nations climate chief Christina Figueres urges global financial institutions to increase their investments in clean energy to $1 trillion per year by 2030 in order to fight the impacts of climate change.
In an interview with the Guardian, Figueres counsels institutions to scale up their investments in clean energy as part of efforts to restrict global warming to 2oC and avoid climate-driven disasters.
“From where we are to where we need to be, we need to triple [our investment]—and we need to do that over the next five to 10 years… but certainly by 2030”, she says.
“What we need to have invested in the energy sector and in the green infrastructure … is $1 trillion a year, and we are way, way behind that.”
According to figures from the Organization for Economic Cooperation and Development, institutional investors could play the greatest role in strengthening clean energy investment. These investors include pension funds, investment managers, and insurance companies, and, combined, control approximately $76 trillion in assets.
Figueres estimates that intuitional investors commit less than 2% of their funds to clean energy, compared to 10–15% of their funds supporting fossil fuels.
“[In 2013], we had $300 billion [invested in clean energy], and in the same year we had double that amount invested in exploration and mining in fossil fuels. So you can see that the ratio is not where it needs to be. We need to be at the opposite ratio”, said Figueres.
The U.N. climate official also warned of the financial risks associated with investments in fossil fuels. To avoid warming beyond 2oC, Figueres notes that “there is no doubt that most of the fossil fuel reserves we have world-wide will have to stay in the ground.”
She added, “Study after study [comes] out saying ‘Beware! We are invested in assets that are already [or] will soon be losing value.”
Also supporting this idea is U.N. Secretary-General Ban Ki-Moon. Speaking at the International Development Finance Club (IFDC) in October 2013, Ki-Moon called for increased financial investments in clean energy in an effort to combat climate change.
“We need to scale up our efforts and our ambition. The climate clock is ticking. The longer we delay, the greater the costs—to communities, to businesses, to economies and to the planet”, he warned.