Capital Markets

The finance sector has numerous opportunities to help drive global warming solutions.

According to the 2006 Stern Review on the Economics of Climate Change, doing nothing to stop global warming could cost the equivalent of 5 percent to 20 percent of global gross domestic product each year. Clearly, global warming poses an economic threat as well as an environmental one. The good news is that capital markets are in an excellent position to save themselves -- and help the planet.

The finance sector has numerous opportunities to help drive global warming solutions, through investment in energy efficiency, renewable energy and other clean energy technologies. A few examples:

• In 2006, solar energy companies raised $5.6 billion in public markets, and they have provided a 29.1 percent return on investment, according to a May 2007 study by The Climate Group.

NRDC’s Center for Market Innovation recognizes the key role that capital markets can play in transforming the energy sector from a polluting, archaic system to one driven by innovation and clean technology. We will reach out and engage the financial community on pending climate regulations, clean energy technologies and the economic risks and opportunities related to climate change. Together, we can help spur innovation in capital markets by:

• Encouraging redirection of capital towards clean solutions by communicating to investors likely economic scenarios under forthcoming climate regulations.

• Promoting low-carbon energy infrastructure investments through negotiation of buyout deals and other transactions.

By working collaboratively with the financial sector, we can help catalyze a shift in capital allocation that dramatically accelerates the process of bringing global warming solutions to the market.