10/19/2011 09:38 EDT | Updated 12/19/2011 05:12 EST

Institutional Investors Group On Climate Change: 285 Investors With $20 Trillion In Assets Urge Carbon Treaty

GENEVA - Large investors representing more than $20 trillion (€14.62 trillion) in assets urged governments on Wednesday to sign a binding treaty on carbon emissions at the U.N. climate talks in South Africa in December.

A group of 285 investors say only legally enforceable carbon limits can spur the level of investment needed to keep temperatures from rising further. The group includes three major investor networks in the U.S., Europe, Australia and New Zealand.

Stephanie Pfeifer, executive director of the London-based Institutional Investors Group on Climate Change, said that raising enough capital to meet climate change goals "will only be possible when low carbon investments are seen as attractive relative to higher carbon investments."

The group includes HSBC Investments, BBC Pension Trust, Hermes, BNP Paribas, Sarasin & Partners and many other of the largest pension funds and asset managers in Europe, with assets of around $10 trillion.

The investors, which also includes the Investor Network on Climate Risk, say overall capital flows to address climate change remain well below the $500 billion (€365.60 billion) a year that the Paris-based International Energy Agency says is needed to keep temperatures from rising more than 2 degrees Celsius (3.6 degrees Fahrenheit) above preindustrial levels. That is the threshold beyond which nations have agreed that serious damage from climate change would be expected.

Boston-based INCR includes BlackRock, Deutsche Asset Management and public pension funds in California, Florida and New York, collectively managing about $10 trillion in assets.

They also want a multibillion-dollar "Green Climate Fund" and clear short-, medium- and long-term goals established for cutting carbon dioxide, methane and other major industrial gases that trap heat in the atmosphere like a greenhouse.

Mindy Lubber, director of INCR and president of Boston-based investment network Ceres, called the statement "a plea" to the U.S. and other governments to give businesses the policies they need to compete in a global economy with a low-carbon future.

"Governments that act aggressively to enact strong, long-term climate and energy policy will reap the biggest rewards," she said. "They will drive the innovation, attract investment and create jobs."

In 1997, the world's nations gathered in Kyoto, Japan, to try to do something about increasing concentrations of CO2 in the atmosphere and associated rising temperatures.

The Kyoto Protocol, which the United States wouldn't join, called for modest cuts in greenhouse emissions by the end of 2012. It's unclear what might follow that treaty or how it could impact Europe's carbon emissions trading system that is expanding each year.

U.N. Secretary-General Ban Ki-moon made climate change a top priority of his first term from 2007 until the end of this year, but for his second term he's pushing global sustainability, a broader calculus that includes climate, energy and a host of other issues.

Christiana Figueres, the Costa Rican head of the U.N.'s post-Kyoto climate negotiations, said many governments are signalling they want a low-carbon future.

"To get there fast enough will require huge new investments in clean energy," Figueres said.

"This is the only way to guarantee the long-term sustainability and security of the world economic system, and the stability of returns from global investment, a major part of which is directly linked to the pensions and life insurance of ordinary people around the world."

The arguments run counter to some of those being made in the United States, where there has been a raging and highly partisan debate over whether countries' economies would clearly benefit from more climate investment and "green jobs."

Among U.S. Republican presidential candidates, Rick Perry, the governor of Texas, has said "the science is not settled" and only Jon Huntsman Jr., the former Utah governor, defends the science of climate change.

The U.N.'s World Climate Research Program in Geneva will assemble 1,700 scientists from 84 nations in Denver next week to look at climate change and extreme weather events. Fossil fuel-burning and other human changes on climate clearly raise the odds for "more of these types of events — heat waves over Europe — in the future," Ghassem Asrar, the program's director, told reporters Wednesday.

In June, the Democrats' leading environmental messenger, Al Gore, argued that even President Barack Obama — a proponent of green jobs to spur the economy — has failed to take "bold action" on the issue of global warming.

"Individual nations will be in a stronger position to attract private capital to stimulate their economies by implementing clear and credible climate policies," said Frank Pegan, chair of the Sydney-based Investor Group on Climate Change, which includes Goldman Sachs, Merrill Lynch and UBS Investment Bank, and controls about $700 billion in assets.

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