So far, our class has placed an emphasis on climate change and it’s impacts on the economy and society at large. We have discussed how sustainable development is a critical factor in the mitigation of these environmental changes. It appears as if American investors are also finally giving thought to the impacts of climate change.
In the June 7th-13th issue of The Economist, there was an article entitled Nobody’s Fuel, which examines the shifting attitudes among American investors towards climate change. It highlights the landmark decision by Stanford University in May of this year to “no longer invest any of its $19 billion endowment in coal firms”. This is in response to a generation of young American students who have pushed their school towards investments in greener technology and to steer clear of firms that profit from carbon and similar climate changing fuels.
GIven our class discussion to date, this is an interesting development, and seems like a positive step in the right direction. If American students — who will soon be entering positions of authority all over the United States as the baby boomers begin retiring — are cognizant and invested in the issues surrounding climate change, there is hope that the United States and other developed countries may soon be investing heavily in sustainable development.
Given recent trends, Morgan Stanley is predicting the the growing investment in renewable energy will succeed in reducing carbon emissions by 7-8% by 2020. While natural gas will likely be the biggest winner in this shift away from major carbon-producing fuel sources, thanks to the reduction in costs that accompanied the development of fracking, other renewable fuel sources will also benefit. While fracking is not without its issues, it is generally considered a much more desirable source of fuel than coal and other major carbon emitting resources.
This shift in investor attitudes is accompanied by rich backers. Former Mayor of New York, Michael Bloomberg, Thomas Steyer and Hank Paulson are all backers of the Risky Business Initiative, who is preparing to publish a paper highlighting the economic risks posed to America by climate change.
Time will tell if this shift among investors is something can sustain momentum or if it just a fade, however it gives those who support sustainable development in the United States hope that positive changes are coming.