3 December 2007
London Accord maps out how $600 billion a year investment
market can be shifted to help roll back climate change
Today (Monday) the City of London Corporation, BP, Forum for the
Future, Gresham College and Z/Yen Group together unveiled the first
fruits of a pioneering London Accord research project to put London
at the leading edge of investment research into technologies needed
to tackle climate change.
Announcing the programme for a results conference that will take
place at the Mansion House on 19 December, Lord Mayor of the City
of London David Lewis said:
"Climate change represents an unparalleled threat to our life on
the planet and through the London Accord the City's best brains
have cooperated in an unprecedented way to tackle the
challenge.
"The London Accord is the first open-source, co-operative
investment analysis into opportunities and challenges in the energy
supply and climate change market - which needs to be $600 billion a
year invested from the private sector over the next 25 years.
Climate change can be tackled if the investment is there - and the
London Accord is the first comprehensive map for the investment
community"
Michel Snyder, Policy Chairman of the City of London, said:
"London Accord started as an idea over a cup of coffee with
Michael Mainelli, the City's Gresham Professor. It has rapidly
turned into several million pounds of collaborative research and
will greatly ease decision-makers' ability to direct investment to
the best opportunities in climate change and adaptation. "The
London Accord research sets a new benchmark in rigour and
innovation in research and will become a standard text."
Drawing on two key papers in the London Accord, Climate Change:
the State of the Debate (by Alex Evans, & David Steven) and The
Forces of Change in the Energy Market (Nick Butler), the Lord Mayor
said: "A broad consensus has emerged that climate change presents a
challenge - and that we can afford, economically, to solve it.
"What is missing is a consensus on the solutions. However, the
searchlight of London Accord is picking out outlines of an early
consensus on this. One key finding is that in future the two key
drivers of energy supply will be security of supply and
climate-impact. Another is that there is no single 'magic bullet'
that will do it all for us - although a common ingredient to all
the necessary solutions is the enabling power of the market: Adam
Smith's "invisible hand" ".
"The market got us into this mess - because the cost to the
planet of our behaviour was not properly priced. Now we can see our
way to pricing fully what the planet does for us, the market will
get us out."
Professor Michael Mainelli - of Z/Yen Group - said: "The
investment community is searching for ways across relatively
unknown territory: the London Accord is a map - perhaps not
complete in every detail yet - but an excellent tool for one of the
most important journeys the human race will have to make."
Sponsors of the London Accord, which follows from the City's
involvement in the Johannesburg Summit in 2002, are BP, the City of
London Corporation (the authority for the Square Mile business
district), Forum for the Future, Gresham College and Z/Yen Group.
Reuters, the London School of Economics (LSE), the Santa Fe
Institute are also behind the initiative and key City institutions
who invested research time include : ABN Amro, Canaccord Adams,
Credit Suisse, Societe Generale , Morgan Stanley, Bank Sarasin,
Barclays Capital, Cheuvreux, JPMorgan Chase, Merrill Lynch and
WestLB. Firms like Herbert Smith and Sustainable Forestry
Management also contributed, as did institutions like the Cambridge
Centre for Energy Studies, the NextEarth Foundation and River Path
Associates.
The LSE and the Santa Fe Institute has helped draw the threads
of the research together while buy-side firms such as USS, Insight,
and Legal & General helped to shape the project to ensure its
outcomes will be useful to investors. Observers from the EU, the
International Energy Agency, UNFCCC and others have been
involved.
Project Director Jan Peter Onstwedder, seconded from BP, said
technologies examined included solar and geothermal energy,
biofuels and carbon-reducing building and transport schemes.
"A key point was to test if something was more than an idea - ie
if it is also scalable and investable. In clean coal technology,
for example, the teams looked at costs of capturing the CO2, the
scrubbing costs, costs of the high temperature ovens, the risks
from electricity price rises, etc, and then set these factors
against a range of scenarios, including soft intervention from
governments - and aggressive intervention.
"Another example might be solar energy. Here we know there are
both centralised solutions and localised ones and different people
are producing different technologies. Each might be good in
different circumstances, in different parts of the Earth, or even
under different levels of price for silicon - a key material
currently booming in price. The modellers have teased out the
issues and establish best practice for their work - thus helping to
create a platform for investors and a market.
"We even ran 'war-games' style scenarios to see how different
governments reacted to pressures for resources."
Ends
Notes
To see the first part of the results, go to
http://www.london-accord.co.uk/final_report/
NB This site is being readied in phases for 19 Dec and
some embargoed material will not be accessible; there will be an
update when more is ready later this week. At the moment Sections
A, B and F are published.
Media
For more information, contact Greg Williams, 020 7332 1455 or 07889
167 205.
To contact London Accord Project Director Jan-Peter Onstwedder ring
0044 20 7948 5979
City of London Corporation
The City of
London Corporation is committed to maintaining and enhancing the
status of the wealth and tax-generating business of the City as the
world's leading international financial and business centre through
its policies and services. Examples are the extensive overseas
business missions on behalf of UK-based financial services and the
wide-ranging economic development, research and regeneration effort
the City of London Corporation undertakes across London. It also
runs the City Office in Brussels on behalf of the City and City
Representations in Beijing, Shenzhen and Shanghai - and a City
Office in Mumbai. Although the City of London Corporation provides
local government services for the City, the financial and
commercial heart of Britain, its responsibilities also extend far
beyond the City boundaries and include management of the Barbican
Centre, Central Criminal Court at the Old Bailey, Epping Forest,
Hampstead Heath, three wholesale food markets, as well as acting as
the London Port Health Authority - and running the Animal Reception
Centre at Heathrow. Other work on climate issues include a
pioneering climate-change adaptation plan for the Square Mile and a
proposal to encourage all City firms to go carbon neutral.