U.S. climate envoy John Kerry declared Tuesday that in order to meet carbon emissions goals, there has to be a sharp increase in investments in green energy, a severe reduction in fossil fuel investments, or both.
Kerry addressed an audience during a talk at the Council on Foreign Relations. He said that while he is "absolutely convinced" that the world will turn to a low-carbon or no-carbon economy, he is worried that it will not happen before it is too late to avoid environmental catastrophe. He said that financial institutions have to get involved.
"Business as usual … is simply not an option," Kerry said.
"For every one dollar invested in low-carbon energy supply, $1.10 is invested in fossil fuels. Go figure," Kerry added. "The math and the science unequivocally make clear, we just can’t hit our targets unless we dramatically change that ratio."
The Biden administration has a goal of reducing net greenhouse gas pollution by 50-52% from 2005 levels by the year 2030, and reaching net-zero emissions by 2050. The European Union's goal is to reduce from 1990 levels by at least 55% by 2030.
Kerry said that climate change is an "existential" problem, and that no single country can solve the problem. In fact, he said that governments alone cannot do it, which is why there has to be help from public and private institutions.
Part of what is needed, Kerry said, is for "private sector financial institutions to recognize the financial risks associated with a disorderly, chaotic, but inevitable transition to net-zero if we don’t manage it more effectively."
Kerry also said that combating climate change presents a great investment opportunity, but warned that "not adequately responding" to climate change would be a real "disruptor in the marketplace."
Kerry also pointed to multilateral development banks (MDBs), institutions that work with donor and borrower countries to help developing nations build their economies and reduce poverty.
Kerry said that MDBs have historically helped address problems like famine and pandemics, and that they have "risen to the moment." He said that going forward they need to continue to do so as the world faces "more frequent, more severe climate-related disasters."
He said MDBs have to "scale up finance for adaptation and resilience," and help countries like Pakistan afford resources to help after disasters.
"Yes, we're asking a lot of these institutions," he said. "But that's what they're there for."
Kerry's remarks were part of a lead up to the COP27 climate conference in Sharm el-Sheikh, Egypt in November.