Technologies to combat climate change could cause wider environmental damage, investors warned
New report warns investors to think more widely about the social and environmental impacts of their clean energy investments.
A new report warns investors to think more widely about the social and environmental impacts of their clean energy investments.
The report, Investments to Combat Climate Change – Exploring the Sustainable Solutions, has been written by sustainable development charity Forum for the Future.
It is being launched as part of the London Accord, one of the largest collaborative research exercises ever undertaken in the City, the focus of which is the evaluation of investment opportunities in solutions to climate change.
The report analyses potential social and environmental problems resulting from technological solutions to climate change and concludes that:
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Existing technologies exist to combat climate change and investors are already allocating significant resources to support them – over US$100 billion is expected to be invested in clean energy in 2007. This will need to increase dramatically in the next few years.
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But current investment levels are already causing unanticipated social and environmental impacts. The rise of global food prices, for example, has in part been caused by high investment in biofuels derived from food crops. Conservationists are increasingly worried that rainforest destruction is being accelerated through cultivation of palm oil and other biofuel crops. These impacts were created when the biofuels industry started expanding rapidly in 2005/6.
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Other technologies to combat climate change could also cause unanticipated impacts. Advanced solar PV uses rare materials and nanotechnologies which have unknown risks. Genetically engineered bio-organisms are being developed for next generation fuels. Each of these technologies will have wider impacts once they are scaled up to a level where they can deliver effective reductions in carbon emissions.
The report says that by looking through the wider lens of sustainability rather than only focusing on carbon emissions, investors can identify and manage wider issues that may threaten the success of their investments.
Financial returns will be dependant on social and environmental viability.
