Guest essay by Eric Worrall

World Bank president Jim Yong Kim claims that investors who currently hold $40 Trillion worth of government bonds and other low yield investments would be better investing the money into renewables.

Climate change offers huge investment opportunity, Al Gore tells World Bank

by Sophie Hares

Climate change should be grasped as an opportunity to attract vast capital flows into low-carbon investments, create jobs and spur economic growth, rather than viewed as a money-absorbing burden, top officials and experts say.

Trillions of dollars are potentially available for climate investments and countries like India are blazing a trail in bringing cheap solar power to millions, but making sure the world’s poorest benefit will prove a big challenge, a World Bank meeting heard late last week.

“It’s the biggest opportunity in the history of the world – it’s the biggest investment opportunity, but we have to have a clear vision, we have to have policy leadership… to bring the world community together to get the financing that is needed to move the momentum more quickly,” former US Vice President Al Gore told the discussion.

World Bank president Jim Yong Kim said financing climate action could offer a more lucrative home for $US8.5 trillion ($11.2 trillion) in negative interest rate bonds, $US24.5 trillion in very low-yielding government-type bonds and a further $US8 trillion in cash, though a clear strategy still needed to be hammered out.

“Quite apart from what you think about climate change, there are opportunities for investments that will give you higher yield than any of those investments in which over $US40 trillion is sitting right now,” Kim said.

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The key is how to unlock financing for economic growth that also brings climate benefits, according to former UN climate chief Christiana Figueres.

Friday’s launch of a $US2 billion green bond fund backed by the International Finance Corporation and asset management firm Amundi could help drive climate investments in developing countries, she added.

“Thinking that climate action is expensive and a burden, and is a responsibility, is so five minutes ago,” she said. “The exponential growth of technologies and the drop in prices (have) made this the best opportunity – and this is (the) story of growth of this century.”

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It is one thing when diehard old greens like Al Gore, or former UN apparatchiks like Figueres make silly claims about renewable opportunities.

It is a totally different matter when someone whose job is to oversee the investment of billions of dollars of public money expresses enthusiasm for squandering that money on risky investments whose profitability seems totally dependent on the fickle financial support of politicians.

Real investment opportunities don’t need special measures to “unlock” financing – as soon as news gets out, people rush to invest of their own free will.