The Independent recently reported on a speech by Dr Jean Rogers, head of ESG at global asset management company Blackstone. Speaking at the Dublin Climate Summit on the 12th May, Dr Rogers argued that whilst 90% of the world’s GDP is now covered by climate commitments but still only 20% of the world’s emissions are priced it is difficult for investment companies to avoid putting investor’s money into future stranded assets. The solution, she argued, is a carbon pricing policy like Canada’s, which is predictable and progressively rises…..
“One thing that can really move the needle is actually pricing carbon and the reason for that is that it then becomes investable – you can take that future liability and turn it into an asset by investing against it now.”
The fact that the Canadian carbon tax will rise from $50 a tonne now to $170 by 2030 incentivises investors to finance the decarbonisation of the copper mine of which she is a board member…..
“We’d never want to pay a dime against that tax… and that is, I think, a really important mechanism.”
The predictability of such a carbon tax would enable the case for investment in decarbonisation to be clearly put across to investors…
“We now need to be talking about long term capital strategies, and we need the tools, but we need the incentives to do that really well,”.
The article also reported on Mark Carney’s appearance at the Lords Economic Affairs Committee on the 22nd April. Carney was former Governor of the Bank of England and is now special envoy for climate action and finance at the United Nations. The committee was discussing how the financial sector should be regulated to enable the move to net zero whilst preventing fear of stranded assets moving investors away from the regulated market.
Carney was asked, ‘Would not this add up to a further case for a carbon tax which would reach part of the financial sector which regulation can’t reach?’ To which he replied, ‘Carlsberg solution, the case is very strong for a carbon price widely applied with maybe an appropriate rebate for less well off households to ensure it is resilient.’ – aka Climate Income!