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BOSTON, Massachusetts, US, March 29, 2006
(Refocus Weekly)
The goal of displacing 3,500 megatons of CO2
emissions by 2050 gives U.S. businesses “an opportunity to
capitalize on technological innovation,” according to the report,
‘Corporate Governance & Climate Change: Making the Connection,’
commissioned by Ceres.
Ceres is a national coalition of investors, environmental and
public interest organizations which work with companies to address
sustainability challenges such as global climate change.
“Companies in many sectors can increase profitability by
implementing energy efficiency strategies and developing
emission-reducing technologies or new products that meet changing
corporate and consumer demands,” it explains in the section on
technological and competitive risks and opportunities. “Fossil fuels
have been the driver of economic growth for more than two centuries,
but change is clearly afoot.”
“Global investments in renewable energy hit a record US$30 billion
in 2004, providing 1.7 million jobs worldwide (and) far larger
investments are expected in the years ahead, as Europe, the U.S.,
China and Japan aggressively embrace solar, wind and other
climate-friendly options over increasingly costly fuels like oil and
natural gas,” it notes. Coal and nuclear power are wildcards in
energy transition, both of which “face huge questions regarding
waste disposal.”
To cut the projected rate of CO2 emissions from energy in half by
2050 and to stabilize atmospheric concentrations at double
pre-industrial levels, 25 billion tons of carbon savings must be
found, and research at Princeton University has identified seven
strategies, each of which would supplant 3.5 billion tons of CO2
emissions from other sources by 2050. Among the strategies: a
50-fold increase in wind power; a 700-fold increase in solar
photovoltaics; produce 34 million barrels of biofuels a day using
250 million hectares of arable land (16.5% of the world’s available
resources); use existing energy efficiency methods to cut carbon
emissions from buildings by 25%; increase fuel economy in cars so
two billion vehicles run at an average of 60 mpg; use natural gas
instead of coal at 1,400 gigawatt generating plants; and store
carbon generated at 1,600 gas-fired generating plants.
“In short, the stakes could not be higher for U.S. companies and
investors,” the report notes. “The greatest investment opportunities
as this new era takes hold will lie with companies that capitalize
on this emerging shift in global energy use and production methods.”
“The greatest risks will be with those that choose to ignore these
trends and try to carry on with business as usual,” it warns.
“Companies in the electric power sector that have not prepared for
the inevitable future costs of carbon emissions could see losses” of
24% to 83%, it warns. Some public utility commissions now require
utilities to include a cost for their carbon emissions “which will
accelerate demand for cost-effective energy from providers of clean
power such as wind, solar, hydro and possibly nuclear power.”
The electric utility industry scored an average of 48.5 points out
of 100 in the Ceres analysis, with credit for high disclosure.
Electric utilities account for two-fifths of U.S. emissions and face
“considerable risks from climate change regulations,” and
high-scoring companies are pursuing renewable energy options (as
well as natural gas and clean coal) to generate electricity, with
special mention to the FPL Group which is the largest wind power
generator in the U.S.
Ceres directs the Investor Network on Climate Risk, a group of 50
institutional investors from the U.S. and Europe managing $3
trillion in assets.
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