Kevin Parker, Global Head of Deutsche Bank’s Asset Management division (DeAM) and a member of the Bank’s Group Executive Committee, is speaking in a plenary session at the World Future Energy Summit in Abu Dhabi. He will speak about the need for comprehensive global government regulations needed in order to attract the massive amount of capital investment required to switch from a carbon-based economy to a more sustainable model based on renewable energy.
Parker will argue that the science of climate change is irrefutable. “Evidence from Antarctic ice-cores has clearly shown that the concentration of carbon in the Earth’s atmosphere has reached an 800,000 year high, with most of that increase having taken place in the last two or three hundred years.”
“We are close to a tipping point where average global temperatures will rise more than 2 degrees Celsius, potentially leading to catastrophic, and certainly very expensive, macro-climatic shifts. The global community must take swift action.”
Comprehensive and global government regulations are the only way to create the investment conditions needed for the transition to a more sustainable energy model over the next few decades.
“A decade and a half after the Kyoto Agreement, regulation to encourage private investment in climate change industries is fragmented and inadequate. There is little international cooperation, the largest carbon-emitting countries such as the US, China, Russia and India, have done little to introduce regulation, and the US has not even signed up to the Kyoto protocol. This chaos must not happen again with the new international agreement being negotiated in Copenhagen in December 2009.”
The Montreal Protocol limiting ozone depleting gasses has proved that international agreements on regulations are possible. A growing hole in the ozone layer, identified as dangerous in the mid-1980s, led to an international treaty in 1987 limiting CFC emission. There is a considerable decrease in the concentration of CFCs in the atmosphere since then.
“Regulation limiting carbon must not only happen fast; it must also be comprehensive and global. Above all, it is critical to establish a global price for carbon, to enable the cost of pollution to be priced into the burning of fossil fuels. Only by pricing in those externalities can we establish a realistic price comparison between fossil fuels and renewable energy. Whether the carbon price is created by a cap-and-trade system or a tax system, the important thing is that the carbon price becomes as well understood and closely watched by people as, say, the oil price,” adds Parker.
