Divestment the way forward
At this month’s G20 meeting in Shanghai, leaders of the worlds’ largest economies expressed their commitment to “green” investment.
The definition of green investment, though ambiguous, encompasses anything from renewable energy, energy efficiency and sustainable transportation to fossil fuel subsidy reform.
Collectively, major economies pledged US$90 billion over the next decade in climate-related financing. Wealthy nations talking about investment in green growth — and not just growth — is a signal that they are no longer seeing climate change as a responsibility or liability, but as an opportunity.
The G20 set up the Green Investment Working Group to focus on investments that avoid environmental externalities. The group’s second meeting is in London later this month.
Norway’s US$713 billion sovereign wealth fund pledged to drop deforestation firms the same week the first meeting took place, while Sweden pledged to be carbon neutral by 2045. It turns out that nations are not the only ones that recognize this ever-growing, untapped divestment opportunity — the private sector is developing strategies for green investment opportunities.
The financial sector has seen similar momentum in green growth, particularly in green-energy financing. JP Morgan, for example, is to stop financing new coal-fired power plants in what they call “high income” nations.
According to Yale University’s environmental blog, Environment 360, “Bank of America, Citigroup, Morgan Stanley and Wells Fargo have made similar pledges in recent months, all part of a larger divestment movement aimed at transitioning the world’s economies off fossil fuels.”
Coincidentally, the coal industry is struggling as it suffers from a continuous drop in prices, partly due to a transition to natural gas and renewable energy sources, and partly due to global campaigns against using coal as an energy source.
The emergence of cheaper and scalable renewable energy generation methods, widespread adoption of natural and shale gas, compounded by a cap on national greenhouse gas emissions in the form of Intended Nationally Determined Contributions, has contributed to coal becoming relatively irrelevant. The decision to end coal financing from the financial sector sends clear signals to investors and policymakers: that divestment is the way forward.
Last month turned out to be the warmest seasonally adjusted month in more than a century. NASA data showed that it was 1.35oC above the 1951 to 1980 global average for the month. The previous highest record was the month before that — January was 1.14oC higher than the average.
If there is any consolation at all, it is that the actions are painting a less gloomy picture of climate change, at least for the time being.
Angela Yeh
Taipei
Eye of the gyre
I had high hopes for Taiwan’s elections and was delighted to see the Democratic Progressive Party win a legislative majority.
I had hoped they would not start acting like children and dust off some old transitional justice issue and run with that as their first attempt at legislating, but no.
Is removing Sun Yat-sen’s (孫逸仙) portraits from public buildings really that important?
Many analysts I respect have said that the world economy is in the eye of a storm, but most people, analysts and organizers cannot see the forest for the trees. So many micro data points are “seasonally adjusted,” that they basically add pepper to a rotten dinner.
I support the appointment of former minister of finance Lin Chuan (林全) to the position of premier. What I am seeing from president-elect Tsai Ing-wen (蔡英文) is strong leadership and a proven way forward. I like the groups she has targeted for focus and investment.
In other news, if Taiwan sets the bar for 5G and gets the proper intellectual property rights, this would be great. Fiber optics are another growth area.
I am not surprised that the TAIEX has dropped, as it usually does when foreign investors flee and the New Taiwan dollar drops. Nor that Chinese yuan deposits in Taiwan fell to a 13-month low. China’s slowdown and eventual hard landing is likely to have a profound effect on Taiwan’s economy and the incoming government needs to start preparing now.
A third runway at Taiwan Taoyuan International Airport would never ever pay for itself. It is a white elephant. China’s proposed high-speed rail line from Beijing to Taipei is also a stupid plan that should not happen. I guess I would call that a red elephant, or a Trojan horse.
Widespread reporting on China’s leadership panic is finally shaking some investors awake. Limits, crackdowns, capital controls and now a Tobin tax. Off the radar, international law firms are having trouble moving money around. China’s state-owned enterprises, many of which are enduring local riots because of months of unpaid wages to their workers, simply cannot be supported by the global economy. Coal and steel are both oversupplied. The real-price Baltic Dry Index is at its lowest point since records started and this is a number that Beijing’s “economists” cannot manipulate.
I propose investments in autarky. Taiwan does not grow its own food even though it has a high fallow, but fertile, land rate and it imports all its energy, despite being No. 2 for solar power sales globally. Taiwan does not need foreign direct investments. Taiwanese are sitting on a mountain of savings because of the White Terror era. Investors need viable plans that seem likely to work. Let us use the smart way to invigorate Taiwan: Buy gold.
Torch Pratt
New Taipei City
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