Energy Efficiency & Climate Change Law

Today, Ceres, a national network of investors, environmental organizations and other public interest groups, hosted the fourth Investor Summit on Climate Risk at the United Nations headquarters in New York City. Participants at the Summit – which was attended by hundreds of global institutional investors and asset managers – discussed ways to leverage private investment in the transition to a low-carbon economy.

Former Vice President Al Gore was the featured speaker at the Summit’s luncheon, which was closed to the press.   U.N. Secretary-General Ban Ki-Moon opened the luncheon, addressing both the climate change challenge following the Copenhagen Accord and the U.N.’s concern for victims of the earthquake in Haiti. Ted Turner, Chairman of the United Nations Foundation, introduced Vice-President Gore, who discussed the importance for institutional investors to provide the marketplace with information on their sustainable activities and climate risks.   Mr. Gore also stressed that institutional investors take various measures (i.e. long-term fee structures) to promote better environmental governance within the financial sector.

Prior to the luncheon, Mindy S. Lubber, President of Ceres and Director of the Investor Network on Climate Risk, announced that investors representing $13 trillion in assets agreed to implement aggressive policies that would serve as an impetus for stimulating investment in low-carbon technologies and mitigating greenhouse gas emissions. The "2010 Investor Statement on Catalyzing Investment in a Low-Carbon Economy" can be found here.

Other highlights from today’s Summit include remarks by George Soros and:

• Jeremy Oppenheim, Director of the Climate Change Special Initiative at McKinsey & Company, provided a very impressive presentation regarding the role of energy efficiency in the global economy.   A highlight from the detailed presentation was the projection that carbon prices will not reach the $30 price range within the next decade – which is significant because this means that the cost of compliance in an emissions trading regime would be lower than originally-expected by leaders and investors in the climate community.   On the other hand, the relatively low price of carbon projected over the next ten years weakens the argument furthered by climate change detractors that carbon trading will be a cash cow for investors who are pushing the global warming agenda.

• Todd Stern, U.S. Special Envoy on Climate Change, gave his first speech since the lamentable conclusion in Copenhagen. He explained that the alliance between Democratic U.S. Senator John Kerry (D-MA) and Republican Sen. Lindsey Graham (R-SC) "is tremendously important" for moving a climate bill through the Senate. However, Mr. Stern spent the better part of his 25 minute speech explaining (i) how the Copenhagen meeting unfolded, (ii) its positive and negative take-aways and (iii) what must be done going forward. [Todd Stern's speech can be viewed by clicking here, or please feel free to send an e-mail to dfrenkil@law.gwu.edu to request a "Cliffs Notes" version.] Most importantly, Mr. Stern stressed that countries that signed on to the Copenhagen Accord must meet the January 31, 2010 deadline for providing an action plan to mitigate their greenhouse gas emissions (see Copenhagen Accord, paragraph 4).

• Kevin Parker, Global Head of Asset Management at Deutsche Asset Management, explained that, despite the worst economic downturn since the Great Depression, progress in mitigating climate change has continued unabated, with over 300 climate bills passing various legislatures globally over the past 18 months.   He asserted that a new era has commenced post-Copenhagen in the investment community, which requires investors to "understand, recognize and take advantage of" this new market-place.

• Abby Joseph Cohen, President of the Global Markets Institute and Senior Investment Strategist at Goldman Sachs described "seven wedges" for addressing global climate change and the role of the investor in the climate change arena. She explained that there is certainly an incentive for companies to disclose their climate risks and sustainability data to investors because "companies that pay attention to good governance, including environmental governance, have outperformed other companies by ten percentage points – not just ten percent."