UN Investor Summit

Al Gore spoke to the United Nations Investors Summit on Climate Change today, and invoked the 's-word' to warn that carbon is more like kryptonite to investors.

"You need to really scrub your investment portfolios, because I guarantee you -- as my longtime good redneck friends in Tennessee say, I guarandamntee you -- that if you really take a fine-tooth comb and go through your portfolios, many of you are going to find them chock-full of subprime carbon assets," the former vice president said. [Snip] "The assumption that you can safely invest in assets that come from business models that assume carbon is free is an assumption that is about to go splat," he said. "You have lots of assets, many of you do, in your portfolios right now that truly do deserve that epithet 'subprime.'"

Read the whole thing. Also, be sure to follow Matt's excellent dispatches from the summit.

Vinod Khosla, of Khosla Ventures and the founding CEO of Sun Microsystems, is one of the rock stars of this summit. His presentation, "...mostly convenient truths from a technology optimist," was sharp and witty and immediately set the summit on a new tact. Khosla has a dogged belief in technology and using bold allocations of venture capitol to reach innovative solutions. Khosla Ventures only invests in a project if he believes that it will be cost competitive with carbon within five to seven years without subsidies. Although his general purpose was beating the drum of innovation, he did specifically address renewable fuels. He seems to agree with us, at least in the promise of second-generation biofuels. Khosla suggests that corn-based ethanol will not be competitive in five years. Therefore, the recent discussion is irrelevant. However, he believes that, within ten years, everyone will believe that oil will have to rapidly decrease in price to compete with second generation biofuels.

Diana Ferrel, the director of the McKinsey Global Institute, is currently making a convincing case for energy efficiency at the UN Investor Summit on Climate Change (the FT has a good summary). The world is obsessed with supply-side solutions to climate change (alternative utilities, renewable fuels, etc.), but demand-side solutions (i.e. increasing energy productivity) could offer remarkable results at, according to Ferrel, a profit. An investment of $194 billion a year (using ideas such as those detailed here) could yield a $17 billion a year profit, as well as getting us halfway to the reduction in carbon emissions that we need. We're talking about a possible reduction in oil consumption of 64 million barrels a day. As Ferrel puts it, even if you plus up the use of solar energy by 500 percent or wind energy by 1000 percent, you get less savings in carbon emissions than those McKinsey suggests.

If you're looking for an unfiltered view of the Summit, check out the webcast.

Professor Holdren gave an incredibly stark, complex, and truly amazing presentation. I won't do it a disservice by boiling it down to a paragraph here. (I'll publish the full text when it becomes available online). The one fact that shocked me: We previously thought that Arctic sea ice would be completely gone by 2050 if we failed to act. It now looks like it will be gone by 2013...FIVE years from now. He says, "We are already experiencing dangerous consequences of human interference in the climate system. The only question is whether that will be catastrophic." He also mentions the Sigma Xi-UN Foundation report, which he led and would give you a pretty good view of what he's presenting on now.

Former Senator Tim Wirth, and UN Foundation President, is now opening the UN Investor Summit. His message: we are on schedule to finish negotiations on a successor regime to Kyoto in Copenhagen in 2009, and a big part of that process is understanding and making the economic case. He says, "Industry groups tends to be way out in front of the political leadership, and a big help in bringing that leadership along." He's now introducing climate scientist and Harvard professor John Holdren to give the lay of the land on climate change and set the stage for the summit.