The United Nations urged global business leaders on Wednesday to double investment in wind and solar energy to $600bn (£400bn) a year by 2020.
One month after the Paris climate agreement, Ban Ki-moon, the UN secretary general, told business leaders they needed to act decisively to hasten the transition away from the fossil fuel economy – or they would put the historic accord in jeopardy.
“I call on the investor community to build on the strong momentum from Paris and seize the opportunities for clean energy growth,” Ban told a UN investors’ meeting in prepared remarks. “I challenge investors to double – at a minimum – their clean energy investments by 2020.”
Global clean energy investment attracted a record $329bn last year, according to Bloomberg New Energy Finance.
But Ban told the New York meeting that was still not fast enough to build the new green infrastructure that would enable countries to meet the Paris goal of limiting warming to below 2C. He said it was time for investors and fund managers to move from “aspiration to action”.
The gathering today of about 500 investors, organised by the Ceres sustainable business network, was the third stop for Ban and other UN officials this month on an itinerary designed to get business leaders firmly behind the Paris climate agreement, after meetings in Abu Dhabi and Davos.
Under the agreement, 196 governments agreed on the 2C goal, an aspirational goal of 1.5C, and to build a net-zero carbon economy in the second half of the century. Rich countries committed to providing climate finance, and all countries committed to revisiting and strengthening their national climate goals, starting as early as 2018.
But the commitments made at Paris would at best cap warming to 2.7C.
Christiana Figueres, the UN climate chief, who will also address investors on Wednesday, and other leaders, have acknowledged that governments cannot finance the economic transformation, and that mobilising support from business leaders was a critical component of the Paris agreement.
The message to those business leaders underlined at the Davos and Abu Dhabi gatherings and again in New York on Wednesday was that, left unchecked, climate change posed a dangerous risk, and that there were business opportunities in the transition to a clean energy economy.
In Davos, some 750 experts gathering for the annual meeting of the World Economic Forum declared a climate catastrophe to be the single biggest threat to the global economy in 2016.
A few days earlier, the annual meeting of the International Renewable Energy Agency in Abu Dhabi was told that doubling renewable energy to 36% of the global energy mix by 2030 would take countries halfway to the Paris goal of limiting warming to 2C, and increase global GDP by up to $1.3tn.
“We had this extraordinary agreement in Paris, we have got points on the horizon,” Rachel Kyte, the UN special envoy for sustainable energy, who will also address investors, said on the sidelines of the Abu Dhabi meetings. “Now we have got to get down to the nitty gritty of long term development of the low carbon economy and that is a lot less sexy in some respects than things negotiated last year.”
The International Energy Agency estimated it will cost the global energy industry $16.5tn by 2030 to make the switch from high-polluting power plants to wind and solar electricity generation, required by governments’ commitments at Paris.
But a number of experts, including those of Bloomberg New Energy Finance, say the prices on new wind and solar projects are coming down - and could come down even further if there is a dramatic increase in investment.
Ceres said business leaders needed to start moving now to take advantage of those new greener markets.
“Ultimately, global investment portfolios need to shift far more capital to low-carbon business activity and away from risky high-carbon sectors that may perform poorly in the years ahead,” Mindy Lubber, president of Ceres, said in prepared remarks.