This Earth Day, Let’s Invest in the Clean Trillion
On Earth Day, let’s take a moment to focus on the economic opportunities associated with tackling climate change. If that sounds like a contradiction, it shouldn’t – because climate change is not just an environmental issue. It’s also an economic issue.
What will it take to limit global warming to two degrees Celsius and avoid the worst impacts of climate change? Among other measures, the world needs to invest an additional $36 trillion in clean energy—an average of $1 trillion per year for next 36 years—a Clean Trillion.
So how has the world been doing on the path to the Clean Trillion this month?
While there is always bad news—such as the fossil fuel industry and its allies in Congress continuing to oppose climate change legislation—there have been glimmers of hope in recent weeks.
First, global investment in clean energy worldwide grew 9 percent in the first quarter of 2014 compared to the same period a year earlier, reaching $47.7 billion. “It is too early to say definitively that 2013 was the low point for clean energy investment worldwide and that 2014 will show a rebound, but the first-quarter numbers are encouraging," Bloomberg’s Michael Liebreich said in a statement. Particularly encouraging was the 42 percent increase in investment in small-scale solar, such as rooftop solar panels, as homeowners and businesses seized on the big drop in the cost of solar photovoltaic systems.
Second, there’s more mainstream investor and corporate interest in green bonds than ever before. With a value of $78 trillion, the global bond market offers a tremendous opportunity to raise large amounts of capital for clean energy. In 2013, $10 billion in green bonds were issued. In 2014, $9 billion of green bonds have been issued in the first quarter alone. The Climate Bonds Initiative predicts 2014 will be a record year for green bonds.
Third, businesses are calling on Congress to act on climate change and clean energy. This month, Ceres’ Business for Innovative Climate and Energy Policy (BICEP) brought companies together to meet with Members of Congress on the Bicameral Task Force on Climate Change. These businesses reiterated their support for strong climate and energy policies, and highlighted their own efforts to invest in clean energy. Ikea, for example, announced on April 10th that the company is purchasing a 98-megawatt wind farm in Illinois that, when operational in 2015, will allow Ikea to generate 165 percent of the energy it consumes in its U.S. operations with renewable energy sources.
Further reinforcing the need to invest in the Clean Trillion, the Intergovernmental Panel on Climate Change (IPCC), the world’s most authoritative body of climate scientists, released a major report this month (Brad Plumer has a concise summary of key points). To limit warming to two degrees Celsius, the report recommends that atmospheric concentrations of carbon dioxide equivalent be no more than 450 parts per million (ppm) in 2100. To stay under 450 ppm:
- The world needs to cut greenhouse gas emissions dramatically and boost the share of low-carbon electricity from 30 percent today to more than 80 percent by 2050
- Fossil fuel power generation without carbon capture and storage would need to be phased out almost entirely by 2100
On Earth Day, let’s remember that climate change and other sustainability challenges are both environmental and economic challenges—and opportunities. By focusing on the environment and the economy, we can build a broader base of public support for the bold actions that are needed.
As Denis Hayes, the organizer of the first Earth Day in 1970 (and the founding co-chair of the Board of Ceres), once put it: “Alone, we are sure to fail. Together, we can change the world.”