In a very interesting article
in Nature (1) Nathan Fabian discusses
the role of global investors in the transition from a high carbon to a low
carbon economy. He points out that
capital investments are trending toward lower emission energy sources such as
solar and away from high emission sources such as coal. This is happening not
because of the investor’s altruism but because of cold calculation about
risk/reward ratios. Basically green energy may be a safer bet than coal for the
long run.
However, the capitalist
calculations are inevitably based on government policies. As the article admits,
the expectation of political actions such as instituting carbon taxes, removing
subsidies to oil and coal industries, and providing subsidies to green energy
development are part of the investor’s calculus. Thus, as usual, it is up to
governments to channel the behavior of capitalists into socially productive
pathways.
(1)
http://www.nature.com/news/economics-support-low-carbon-investment-1.17015