United Nations climate chief Chistiana Figueres has urged financial institutions to triple their renewable energy investments to around $1 trillion a year, the Guardian has reported.
Clean energy investments have been reaching about $300 billion per year, but to avoid worldwide climate disaster, Figueres says that figure needs to be tripled over the next 5 to 10 years.
The conservative International Energy Agency backs this assertion. The IEA has calculated that it will take $1 trillion annually to develop the new clean energy infrastructure needed to make the major shift away from fossil fuel-based economies. Although clean energy investment has been growing worlwide, it lags behind the figure needed.
It is the big institutional investors, such as large pension funds, insurance companies, foundations, and investment fund managers that could really tip the balance in the right direction. According to the OECD, these investment institutions are in charge of around $76 trillion in assets. Figueres has pointed out that although a sizeable $300 billion was invested in clean energy assets last year, double that amount was invested in fossil fuel mining and exploration. This continued investment in fossil fuels ignores the realities of the impacts on climate change.
Apart from this tripling of investment in renewable energy development, it was recently pointed out in the latest Intergovernmental Panel on Climate Change report, that two-thirds of the world’s known fossil fuel reserves will have to be left in the ground if global temperatures are to be kept below the important 2 degree rise mark. Given that fact, clearly, a major shift in investment thinking needs to take place.