Accounting for Climate Change

In a joint Op-Ed submission from Deutsche Bank and Ceres, Kevin Parker and Mindy Lubber called for an international accounting of the costs of climate change. Relying data from behavioral economists they stated that when the price of costly activities are hidden from us, we’re more likely to pursue those activities prudently.

Parker and Lubber claim that the free market’s accounting system has disguised the cost of one of our most destructive activities: emitting pollution that is making the earth warmer. It has done this by making the market price of emitting those pollutants zero — these costs have simply not figured into what we pay to power our factories, heat our homes and drive our cars.

Last week outside of New York City’s Madison Square Garden, Deutsche Bank unveiled in plain view a meter of sorts on human-caused climate change, the great challenge of our age. The bank activated a 67-by-32-foot electronic billboard — where some 510,000 people see it daily — monitoring the real-time, cumulative pollution humans are emitting into the earth’s atmosphere. Millions more can view it on the web at http://know-the-number.com.

This “Carbon Counter” is based on cutting-edge climate change science, with actual emissions being updated every tenth of a second by MIT’s Global Climate Change Program and the National Oceanic and Atmospheric Administration.

Deutsche Bank is part of a large wave of global businesses that understand both the bottom-line risks for business and the huge investing opportunity this challenge presents. A global transition to a clean energy economy is a tremendous opportunity to create millions of jobs, safeguard our health, build sustainable prosperity and energy security, and hand our children the planet they deserve.

Legislation with strong incentives and clear market signals for renewable energy, energy efficiency and other low-carbon technologies will help catalyze needed clean tech investments. In America that legislation now takes the form of the American Clean Energy and Security Act sponsored by Congressmen Henry Waxman and Edward Markey. This landmark bill was approved by a House committee in late May — the first time ever such a bill has gone so far. Now it faces key votes in the full House and Senate.

Their primary assertion: What gets measured, gets prudently regulated.

Kevin Parker is Global Head of Deutsche Asset Management and a member of Deutsche Bank group’s General Executive Committee. Mindy Lubber is president of the Ceres coalition of investors, environmentalists and public interest groups and director of the Investor Network on Climate Risk, a group of 80 institutional investors focused on the business impacts of climate change.

Image Credit: know-the-number.com screenshot