Greening Financial Reform

Government budgets already must tackle flooding, wildfires, rising seas, eroding coastlines and other effects of climate change and should prepare to invest even more. “Trillions of dollars in ‘green finance’ – that is, low-carbon, resource-efficient investment – are needed annually to prevent climate change and natural constraints from stalling the global economy and threatening the livelihoods of billions of people,” writes Simon Zadek for Project Syndicate. “But investors remain resolutely brown and dirty, unwilling to bet on a sustainable future.” Emerging economies are leading on sustainability, but that’s not enough as developed and major economies use the lion’s share of fossil fuels. Zadek urges regulatory reforms including full disclosure on carbon pricing in investment asset valuations; full accounting of risk by credit rating agencies and large institutional investors; and increased investment for renewables and purchase agreements. Governments and businesses that avoid making climate change a factor in their long-term planning could take on unnecessary risk. – YaleGlobal