The world is losing natural capital worth between $2 – $5 trillion every year as a result of deforestation, according to an EU funded report led by Pavan Sukhdev, the Deutsche Bank economist and head of its global markets business in India. The report said the figure comes from adding the value of the various services that forests perform, such as providing clean water and absorbing carbon dioxide and calculating the cost of either replacing or living without them. The review, The Economics of Ecosystems and Biodiversity (Teeb), concluded its first phase in May this year when the team found that forest decline could be costing about 7% of global GDP. The second phase will expand the scope to other natural systems. Sukhdev told the BBC that the cost of natural decline dwarfed the $1-$1.5 losses on the financial markets to date as a result of the credit crunch: “It’s not only greater but it’s also continuous, it’s been happening every year, year after year.”
A group of 17 leading economists have written a series of short articles proposing solutions to the credit crisis. The series, titled: “Rescuing our jobs and savings: What G7/8 leaders can do to solve the global credit crisis” has been called a “must read” by Paul Krugman, recent winner of the Nobel prize for economics. Link to site
The credit crisis could be an opportunity for global green economic growth if Western governments help poor countries tackle problems that key to savingthe planet’s ecology instead of spending excessively on rescuing the financial world, according to Yvo de Boer, head of the Bonn-based United Nations Climate Change Secretariat. De Boer said the financial “earthquake” that has seen markets plunge worldwide in recent weeks could damage UN-led climate change talks if the opportunities that the crisis brings for climate change abatement are ignored. He said: “The credit crunch I believe is an opportunity to rebuild the financial system that would underpin sustainable growth … Governments now have an opportunity to create and enforce policy which stimulates private competition to fund clean industry. He said a successful outcome to climate change negotiations in Copenhagen in December 2009 would create new markets, investment opportunities and job creation.
The results of the second Carbon Disclosure Project survey for Switzerland will be presented jointly by Ethos and Pictet Asset Management on 24 November 2008 in Zurich. One hundred companies were contacted with a response rate of 55%.
Clean energy stocks listed on the WilderHill New Energy Global Innovation Index (NEX), lost 25% of their value in five trading days last week, according to New Energy Finance. The Dow Jones Industrials and the S&P 500 each fell by 18% in the same week, underlining greater volatility in clean energy stocks. The NEX
represents a basket of 88 clean energy stocks worldwide.
Hermes Real Estate is launching the Hermes Emissions Trading Scheme (HETS) to prepare the asset management firm and its tenants for the UK government’s introduction of the Carbon Reduction Commitment (CRC) in October 2009, reports IPE Real Estate. The two-year-trial of HETS is intended to prepare managers for the potentially significant financial implications of the CRC, a mandatory emission-trading scheme whose objective is to create a market for carbon emission permits, and in turn encourage tenants to reduce their carbon footprint.
Daniel Lebègue, president of Transparency International in France and a member of the responsible investment committee at France’s FRR reserve fund, has called for European governments and transnational groups such as the IMF to tackle the “clandestine finance” of fiscal and legal offshore havens. Lebègue, former director general of CDC, the French state-owned bank and board member at Crédit Agricole, the French banking group, saidmore than 400 banks, a thousand plus hedge funds and millions of shell companies used offshore jusridictions to conduct their business. He said: “There will be no credible reconstruction of the international financial system if there is no remedy to this dangerous situation which runs contrary to stability, collective ethics and the development of the world’s poorest countries.”
HSBC Global Markets has launched a climate change research facility through which fund managers can contribute to and access research on climate change from partners including Ernst & Young, New Energy Finance, Risk Management Solutions and the UK Met Office via a commission sharing agreement.
IBM is providing consulting services to Boston-based quant asset manager Jantz Morgan to integrate corporate social responsibility throughout its business strategy and operations. Jantz Morgan has been managing SRI portfolios for institutions and plans to roll out its first SRI portfolio to retail clients shortly.