《Climate Finance and its Governance外文翻译啊.doc》由会员分享，可在线阅读，更多相关《Climate Finance and its Governance外文翻译啊.doc（9页珍藏版）》请在taowenge.com淘文阁网|工程机械CAD图纸|机械工程制图|CAD装配图下载|SolidWorks_CaTia_CAD_UG_PROE_设计图分享下载上搜索。
1、Climate Finance and its Governance: Moving to a Low Carbon Economy through Socially Responsible Financing?I. INTRODUCTIONTo what extent, and how, can financial markets contribute to climate policy goals? Amidst the mounting international urgency to combat global warming, the financial sector has bec
2、ome an increasingly prominent stakeholder. The Kyoto Protocols inclusion of various economic mechanisms to achieve cost effective reductions of greenhouse gas (GHG) emissions, created a framework for financial institutions such as banks and pension funds to play a seminal role in the transition to a
3、 low carbon economy. They would be able to act as brokers for carbon trading, and as financiers for clean development and climate adaptation. Until recently, however, another role of financial markets has been somewhat overlooked in the climate policy debates. It is the movement for socially respons
4、ible investment (SRI). Rather than limiting financial institutions to mere transactional agents in climate finance, SRI envisions a much more active and enlightened role for them. Traditionally, SRI has expected financiers to act as ethical investors, who priorities socially just and ecologically su
5、stainable development over the maximisation of financial returns .In other words, the financial sector should act in the public interest rather than merely for its own economic self-interest. By this approach, SRI promises a radical path to a low carbon world, whereby the financial sector may exploi
6、t its economically strategic position to leverage positive changes in corporate behavior. If successful, SRI can overcome the limitations and gaps in official climate regulation by pushing for early corporate action to reduce GHG emissions.However, SRI is not a textbook manual for social responsibil
7、ity, but rather a fluid discourse open to diverse interpretations and practices. In recent years, particularly since 2000, that discourse has changed profoundly. Many SRI actors have jettisoned pretensions to invest solely on ethical grounds; instead, they are motivated primarily by a business case
8、whereby social and environmental problems, including global warming, are addressed on the basis of the relative financial risks and opportunities to the investor. A second important transformation in SRI is the propagation of an array of codes of conduct and other governance standards for responsibl
9、e finance. Several of these regimes specifically target climate change issues, such as the Carbon Disclosure Project. In general, this trend in SRI governance has tended to reinforce the drift to the business case approach.This article assesses the contribution of SRI to climate finance and the tran
10、sition to a low carbon economy. Taking a comparative and international perspective of the subject, it examines in particular the relationship between SRI and the mechanisms for governance of climate finance. This article argues that international financial markets are presently unlikely to be the va
11、nguard of change to a low carbon world. This is for primarily two reasons. First, the shift to a business case approach to SRI has blunted its pretences to be a vehicle for radical reform. Second, although SRI arose to provide a form of surrogate market regulation, compensating for the lacunae and w
12、eaknesses of official regulation, its dependence on the state to create legal standards conducive to responsible conduct in the area of climate finance is increasingly evident. While the article does not seek to explain in detail how SRI could be legally reformed to enable the financial sector to pl
13、ay a more effective role in responding to climate change a topic of great length requiring a further essay it provides insights into future directions. II. CLIMATE CHANGE CONCERNS FOR THE FINANCIAL SECTORClimate change will be the most complex and expensive environmental problem humanity has ever ha
14、d to address. According to the Stern Review commissioned by the British government, the cost of business-as-usual, of not taking immediate action to mitigate climate change, will in years to come likely amount to between five to ten percent of world gross domestic product (GDP) each year, but only o
15、ne to two percent of GDP if we act now.The Stern report, however, sanguinely assumes that climate change can be managed without any fundamental change to our economy, the market system, and the concomitant priority given to economic growth. Other commentators such as Monbiot, Flannery, and Homer-Dix
16、on predict much severer challenges and costs in kicking the carbon economy. Credible government policy measures to reduce emissions rapidly have yet to be advanced, and the political will in many countries to force change is muted.In the present era of finance capitalism an economic system dominated
17、 by the financial sector and involving the propagation of a complex system of banking services, securities markets, and other financial instruments the finance sector will likely play a central role in climate policy. It can help to price climate risks and facilitate investment in renewable energy a
18、nd efficient technologies.The investment community increasingly perceives some action on climate change as in its self-interest, for it poses risks to the value of their investment portfolios or their borrowers solvency through tightening regulations, impairment of physical assets, and reduced incom
19、e.A report by the International Finance Corporation assessed climate change as a particularly powerful catalyst for the incorporation of environmental factors into investment decision-making. Some analysts predict climate change due diligence will soon become an indispensable facet of inquiry in any
20、 transaction.Although the financial sector is publishing numerous studies that warn of the impact of global warming to its self-interest, so far tangible changes in investment practices are hard to discern. Financial markets continue to capitalise the fossil fuel industry heavily. The surging invest
21、ment in Albertas oil sands is one of the most controversial examples. Even many so-called SRI funds continue to hold stakes in GHG emitting firms. The business case for investment in fossil fuels often remains far more potent than the business case for divestment. Moat fundamentally, the turmoil tha
22、t swept global financial markets in late 2008 and early 2009 epitomized the deep structural failure of the financial sector to manage risks and invest with a view to the long-term.The speculative, myopic and avaricious culture embedded in this sector, which precipitated the market turmoil, hardly pr
23、ovides the appropriate milieu to nurture an environmentally responsible financial community that invests for sustainable development.Presently, the financial sector acts mainly as a transactional mechanism to allocate capital for climate mitigation and adaptation efforts. In other words, it is an in
24、termediary, helping to facilitate investment in renewable energies, Clean Development Mechanism projects, and carbon emission trading. One such player, for instance, is the British-based Carbon Capital Markets, which buys and sells carbon allowances for companies.The financial sector has also pionee
25、red voluntary trading schemes, the most successful example being the Chicago Climate Exchange (CCX). Established in 2003, the CCX is a GHG emission allowance trading hub for emission sources and offset projects in the United States (US) and a growing number of other countries including Canada, Brazi
26、l, and Mexico.The CCX members, who include corporate behemoths such as Ford and IBM, make voluntary commitments to reduce their GHG emissions in 2010 by six percent below a baseline period of 1998-2001.In the retail finance markets, catering mainly to individuals, mutual funds are selling climate fr
27、iendly investment portfolios, and banks are offering green home loans that take into account the energy efficiency of mortgaged properties.In theory, however, the long-standing movement for SRI suggests that the financial sector could play a more ambitious role on climate issues. It evolved from chu
28、rch-based, single-issue activism, where ethical investors eschewed ties to companies and activities deemed immoral, such as gambling, alcohol, and vulgar entertainment. From the late 1960s, the SRI movement began to embrace a wider agenda of concern for human rights, taking up cause against the Viet
29、nam War and, later, South Africas apartheid regime. Since the 1980s, and especially since the late 1990s, SRI has also championed environmental causes including climate change.The massive growth of international financial markets, fuelled in part by surging household wealth and the participation of
30、mass society in investment schemes such as pension plans and mutual funds, has provided an opportunity for ordinary people to use their investments to promote positive social and environmental changes including stopping global warming,As it has matured, SRI has sought to influence financial markets
31、through several techniques, including ethical screens (excluding assets in problematic firms), best-in-class portfolios (selecting the firms that act the most responsibly relative to their peers), shareholder advocacy (using shareholder rights to advocate change within companies) and, in the banking
32、 sector, financing on preferential terms to socially or environmentally beneficial projects. Through such techniques and engagement with a widening agenda of issues, SRI seeks improvements in corporate social and environmental behaviour beyond the letter of the law. However, as this article will dis
33、cuss shortly, that potential has not yet been generally reached.The threat of climate change, which should raise profound questions about the sustainability of our economic system, is hardly debated in the mainstream financial community.22Taylor and Brown contend that we need to debate the ethical i
34、ssues raised by climate change to reach an urgently needed international consensus for action.23They also see ethical deliberation as crucial to leading the world toward an equitable sharing of the burdens and benefits of protecting the planet, as called for in the UN Framework Convention on Climate
35、 Change (UNFCCC).24Yet, for most investors, global warming is (at most) mainly a matter of financial risk or investment opportunity. With decision-making in financial institutions dominated by fund managers and other investment professionals focused on the bottom line, any notion that such instituti
36、ons are a forum of enlightened ethical deliberation among climate-conscious investors would be naive.The legal system influences the construction of these risks and investment opportunities. On the upside, the Kyoto Protocols flexible mechanisms create several market opportunities for financiers.25T
37、hey expand opportunities for lending to companies acquiring emission abatement technologies. Also, the Clean Development Mechanism and Joint Implementation sectors provide opportunities for project finance. Further, carbon emission trading creates a demand for brokerage services. Finally, climate ri
38、sk assessment in equity and debt financing provides additional work for financial analysts.On the downside, polluting industries in the oil and gas, heavy manufacturing, and transport sectors should be competitively disadvantaged by climate regulation, thereby hurting their investors.26While such lo
39、sses would concern any rational investor, they would particularly concern institutional investors having fiduciary duties to their fund beneficiaries to promote optimal financial returns.27 A guide for British pension fund trustees suggests that:Climate risk can have a real impact on portfolio holdi
40、ngs. There is a growing case for trustees to attain some level of knowledge around these issues, and to take steps to mitigate any negative consequences of not taking action. In line with these definitions of fiduciary responsibility, we suggest that it is consistent with fiduciary responsibility to
41、 address climate change risk.28Regulatory risk is thus one of the most material concerns to investors, as some governments have begun to tighten controls on GHG emissions. The growing reliance on market-based policy instruments, such as carbon taxes and subsidies for clean energy investments, will a
42、ffect the competitive advantage of polluters.29 Several studies also forecast that participants in emission cap-and-trade schemes will incur cash flow risks from the increased expenditure on GHG reduction measures or the purchase of emission allowances.This partiality to economic instruments reflect
43、s a broader evolution in environmental law worldwide, which is moving away from bureaucratic, command-and-control regulation toward reflexive legal instruments perceived as more congruent with the workings of the market.31Thus, the United Kingdom (UK), once a staunch opponent of carbon taxation, in
44、2001 introduced a climate change levy on non-renewable energy consumed by industry and public sector agencies.32The UKs Climate Change and Sustainable Energy Act 2006, Canadas Clean Air and Climate Change Act 2007 and New Zealands Climate Change (Emissions Trading and Renewable Preference) Act 2008,
45、 are among the new climate laws creating a framework for further such initiatives. Even in the US, where federal policy was largely indifferent to global warming until the election of President Barack Obama, several states have acted unilaterally.33For instance, Californias Global Warming Solutions
46、Act 2006 caps the states GHG emissions at 1990 levels by 2020, and mandates a cap-and-trade system to help achieve this goal.Litigation risks may also concern some investors. Several lawsuits initiated in North America against major GHG emitters may ignite fears of a litigation onslaught reminiscent
47、 of the anti-tobacco campaign.34Big polluters could be liable for damages associated with the physical effects of climate change, such as flooding, severe storm damage or droughts. In 2004, eight US States and New York City sued five of the countrys largest power companies for creating a public nuis
48、ance.35In the 2006 case of Lockyer v General Motors,36California commenced a similar tort action against six automobile manufacturers. While some legal commentators believe that the probability of legal victories against global warming is low,37they also concede that such litigation may generate sub
49、stantial legal fees and costly delays to new projects.38Climate litigation is emerging in other countries, including actions against governments in Australia39 and Canada.Climate change also poses both physical risks and intangible reputational risks to investments. Economic sectors dependent on stable climate conditions, such as agriculture, forestry and tourism, face physical threats.41The oil industry itself is vulnerable, as illustrated by how Hurricane Katrina in 2005 shut down many refinerie