As President Donald Trump puts together his fossil fuel-focused administration, the investment community is moving full speed in the opposite direction. They are placing their bets on emissions reductions and support for clean energy. The scope of global fossil fuel divestment has doubled over the past 15 months, with institutions and individuals controlling $5.197 trillion in assets pledging to divest. This announcement comes on the first anniversary of the Paris Agreement on climate change.
688 institutions and 58,399 individuals across 76 countries have committed to divest from fossil fuels. Universities, foundations, and faith-based organizations account for 54 percent of new commitments made. Representatives from finance, philanthropy, faith, entertainment, and education showed their support for the movement. As more mainstream financial institutions commit to divest, the industry faces greater scrutiny. The oil and gas industry is currently experiencing an unprecedented level of negative factors. These include reduced profits to increased borrowing to pay dividends. In comparison, the costs of solar, wind, and batteries continue to fall.
The financial markets are fast losing faith in the investment case for fossil fuels. A technological revolution is underway in the energy and transportation sectors, as cheap solar and electric cars take away demand for coal and oil. Over time, climate risk management will likely become an enforceable obligation, as financial market regulators stand ready to move from planning to action.
On a global scale, more than half the investment in new electricity generation is going into renewable energy. That is more than $300 billion a year, a sign of how powerful the momentum has become. Wind power is booming in the United States, with the industry adding manufacturing jobs in the reddest states. When Mr. Trump’s appointees examine the facts, they will learn that wind-farm technician is projected to be the fastest-growing occupation in America over the next decade. The election of Mr. Trump left climate activists and environmental groups in despair, but the financial benefits of “growing green” are becoming too strong to ignore.
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