Conference Presentation, Panel, Fireside Chat, Roundtable
Acid Rain to Asset Reign: The Business Case for Investing in Climate Change Technology
Milken InstituteSpyros Kouvelis, Gísli Hauksson, Richard Mattison, Sabrina McCormick, Alisa Swidler, Peter, Abid Kamali, Hannah
- The global focus on climate investment and technology is shifting eastward, with China actively leading this transition following the United States' withdrawal from the Paris Agreement.
- Future climate strategies require the integration of artificial intelligence, big data, blockchain, and advanced energy storage systems to bridge investment gaps and mitigate emissions.
- Geothermal capacity is currently approximately 13 to 14 gigawatts, with estimates predicting a rise to 34 gigawatts by 2013 and a long-term utilization potential of 200 gigawatts.
- Approximately 6% of global aluminum production is located in Iceland, exceeding total output in the United States, while geothermal production remains under 1% of total global energy consumption.
- Deep drilling technology investments over the next two to few years aim to extend viability to non-volcanic areas, with the Icelandic Deep Drilling Project targeting depths of up to eight kilometers.
- Geothermal energy in volcanic regions is currently economically viable without subsidies, with non-volcanic viability and unsubsidized markets anticipated in the near future.
- China plans a tenfold increase in households heated by hot water over the next few years, targeting approximately 30 million households.
- Market participation is evolving as private equity and public investors increasingly enter the geothermal sector, reducing reliance on development agencies and international financial institutions.
- Ocean-related initiatives are forming to link poverty eradication with ocean safeguarding, noting that climate change impacts ecosystems above and below water.
- Pacific Island countries face direct climate change losses of 50% to 80% in their fish stocks.
- Lake Chad has shrunk by 95% over the last 20 to 25 years due to climate change and river drying, resulting in drought, famine, disease, and conflict.
- The Intergovernmental Panel on Climate Change assessment warns of a three-year window to peak global carbon emissions to limit warming to two degrees.
- Hydroelectric projects involving flooding generate methane emissions estimated at 30 times the potency of carbon dioxide.
- The Belo Monte Dam project has encountered 30 years of delays and legal issues, including corruption charges against two Brazilian presidents, with current generation projections 70% lower than planned due to altered Amazon microclimates.
- Major asset owners like GPIF are considering allocating 10% of assets to ESG investments, while Swiss Re has shifted $120 billion from traditional to ESG-based benchmarks.
- Financing the Sustainable Development Goals may require $2 trillion or more in capital reallocated from capital markets rather than philanthropy.
- The European Union is consulting on making environmental, social, and governance factors a core part of fiduciary duty for investors, asset managers, and banks.
- Lord Stern's original 2006 review estimated a potential GDP loss of 20% per annum without climate action against a 1% to 5% cost to address it, with subsequent views indicating these downside risks were vastly underestimated.
- A green taxonomy system is scheduled for launch in December by Vice President Dombrovskis at a conference in Paris.
- The European Commission plans to implement investor duty recommendations next year if deemed necessary following current consultations.
- Green bond issuance is accelerating with anticipation that the entire bond market will eventually be assessed for its "greenness."
- Renewable energy sectors have created more jobs in the United States for the past two quarters than any other sector, independent of federal government influence.
- The private sector is viewed as the primary driver of climate action, with federal government initiatives consistently lagging behind.
- The European Investment Bank and S&P are collaborating on a taxonomy to classify assets as green or non-green in alignment with SDGs.
- Preliminary research suggests health is a primary motivator for behavior change regarding climate change, though specific study results remain unreleased.