THIS is what it will cost to fight Climate Change
But I know you. You focus on the big picture, what's practical. So when you look at what it's going to take globally to fight climate change in terms of who has the money, what their motivations are, and what exactly it's going to take to unlock those funds to put those funds to use, what are the answers to those questions?
I'm glad you're asking me because that's the question about being practical. It's going to cost between five and ten trillion dollars a year, whether you spend money on it or whether it's its consequences because you don't spend money on it.
So who's got the money is the big question, and how do you practically do it? Right now, we're spending about one sixth of that. That is on mitigation. By mitigation, I mean trying to find alternative energy sources, making sure temperatures don't rise by 1.5 degrees Celsius—those things that mean that climate change doesn't happen.
And then you go to, if it does happen, adaptation. It's going to cost money to adapt, to build the air conditioning and the water to deal with the high sea levels. And then there's number three: the damages.
So this, any way you cut it, is going to be a lot of money. The problem is that it's not economic. You have to start off by looking at who has the money, where you're going to get the money from.
If you look at that, by and large, I won't take all the time to break it down, it has to be economic to produce a profit. The largest source of money is institutional investor money—about $200 trillion dollars. Only about 3% of that money goes into this issue, and so, as a result, when I say institutional money, I mean pension funds, endowments, foundations, and sovereign wealth funds that have to take care of the population.
So think about it as retirement people. The issue is how do you make it economic to get money into that? And that's where the real impediment is.