Why Investing in Renewable Resources is Vital to Benefit Humanity

Climate change has been a contentious issue for years now. The public hears about it, but how do we figure out who to trust? According to Gareth Redmond-King, the head of climate change at World Wildlife Fund UK, part of the blame lies with “the biggest companies in the world who have benefitted the most on fossil fuels...[and] spent an awful lot of money lobbying against climate action and suppressing evidence of climate change over the years, and indeed putting out alternative versions of the story to try and muddy the waters and slow down action.” Since 2015, $1.9 trillion has been invested into the fossil fuel industry by global banks. Given that I am studying finance, seeing how much money has gotten poured into energy sources that have and need safer alternatives was alarming. The Intergovernmental Panel on Climate Change (IPCC) stated in 2018 that “there\u27s a better than 95 percent probability that human-produced greenhouse gases such as carbon dioxide, methane and nitrous oxide have caused much of the observed increase in Earth\u27s temperatures over the past 50 years.” How can the finance world learn to redirect their assets to invest ethically, specifically when it comes to the energy sector, in order to help diminish greenhouse gases? The 2016 Paris Agreement notes that the global temperature cannot rise higher than 1.5 degrees Celsius above what it is today without doing permanent damage. Consider the current coronavirus pandemic. It has disrupted many networks, including but not limited to the economy, transportation, and health care. Breaking links in one of these networks can cause a ripple effect in others. For example, the failure of the transportation network would lead to a disruption in the supply chain. Like coronavirus, climate change is also currently affecting our networks. The difference between coronavirus and climate change? There will likely be a vaccine for COVID-19 but there’s no “vaccine” for climate change. The only barrier to its many devastating effects, like sea-level rise or extreme weather, is to stop the release of greenhouse gases into the atmosphere. Ultimately, I would like to determine the current effect climate change is having on the world of investments: specifically, investments in energy. Additionally, I will utilize that information to make a well-informed argument about why long-term investors should invest in renewable resources as opposed to traditional energy sources