GLOBAL - Investors representing over $15trn (€11.1trn) in assets have called for action in the fight against global warming in order to avert the risk of severe economic disruption.
Citing potential GDP losses of up to 20% by 2050, and the attractive economic benefits of shifting to low-carbon and resource-efficient economies, the 259 investors have demanded national and international policies to encourage private investment into low-carbon technologies ahead of climate negotiations in Cancún, Mexico, in late November.
In the past, private sector investments in climate solutions have been primarily driven by consistent and sustained government policy, said Ole Beier Sørensen, chair of the Institutional Investor Group on Climate Change and chief of research and strategy at Denmark's largest pension fund ATP.
He added that experience in Spain, Germany and China demonstrated that such policies bolstered investor confidence and drove investors towards renewable energy.
"These experiences also show how such policies can bring technologies down the cost curve and eventually strengthen their competitiveness," said Sørensen.
Global clean energy investments are expected to eclipse $200bn in 2010, up slightly from 2009 but substantially less than the roughly $500bn required annually by 2020 to restrict warming to below 2 degrees.
The statement calls for a number of policies to be introduced, both in developing and developed countries.
It urges for short, medium and long-term greenhouse gas reduction targets, as well as well-designed carbon markets and sustained price signals on carbon emissions.
Additionally, it urges rapid development in the area of clean vehicles and green buildings, as well as a number of other energy efficiency measures.
Among the investors from Europe, the US, Asia, Australia, Brazil and South Africa are Allianz Global Investors and HSBC Global Asset Management, as well as many of the largest European pension funds.
The negotiations in Mexico, which begin on 29 November, aim to negotiate a new international treaty to replace the Kyoto Protocol, which expires in 2012.
However, no major agreement is expected from the talks, in part because the US Congress has balked at enacting national climate legislation to reduce greenhouse gas emissions.