An Environmentalist's Perspective on the Current State of the Climate Debate

Jeremy Leggett
Greenpeace International

1. Introduction

During 1995 the scientific evidence backing a grim threat- assessment for global warming has been tightening. This paper begins with a synopsis of the recent scientific evidence, which is soon to become codified in the Second Assessment of the Intergovernmental Panel on Climate Change, due for release in December.

Despite such robust evidence of clear-and-present danger, as 1995 draws to a close it is clear that the world is failing to face up to the enhanced-greenhouse threat. At the climate negotiations, most developed countries now accept that they will not even meet their target of stabilizing greenhouse-gas emissions by 2000. Meanwhile, the energy industry has become entrenched in a defence of perceived short-term vested interests.

In contrast, the financial sector has shown the first signs of awakening to the greenhouse threat not only as a major problem, but also as a potentially significant future market driver. This paper very briefly reviews that process, which is summarized further in a forthcoming edited volume to be published in December by the German insurer Gerling Group.(1)

At the same time that the financial sector has been taking an increasing interest in the issue, a second important new dynamic has been taking shape. Publics have shown recently that they are now capable of exerting crushing consumer pressure, internationally, once their concern is awakened on environmental issues. The importance of this with regard to the enhanced- greenhouse problem is that although publics are not yet placing global warming high on their list of environmental concerns, it seems inevitable - as a corollary of what climate scientists are now warning about climate change - that it will soon move up the ladder of concern.

I focus in this paper on these two emerging dynamics: the respective awakening processes of the financial sector and publics to the greenhouse threat. I assess the potential interplay in the years ahead between these dynamics and the governmental domain, and examine the implications for markets.

I argue that creating huge new markets in solar-power will be the single most important factor in beating the enhanced-greenhouse threat, and fashioning sustainable economies. A key theme developed towards the end of the paper is that lurking in the greenhouse threat are not just economic dangers, but opportunities. A potentially historic opportunity is in the process of opening up for a greenhouse-driven marriage between investment capital and consumer market-pull, on a scale capable of explosively inflating the use of solar energy globally. Such an achievement would be the single biggest possible contribution to abating the greenhouse threat, and would trigger instant progress towards solving many other economically-threatening human societal and environmental problems into the bargain.

2. The state of the climate negotiations, and the interplay between government and industry to date

The world in general began waking up to the threat of an enhanced greenhouse effect in the late 1980s. The Intergovernmental Panel on Climate Change was convened, and in 1990 duly delivered an authoritative and extremely gloomy prognosis.(2) Governments reacted, and had by June 1992 negotiated the Framework Convention on Climate Change, a treaty without teeth (which is to say greenhouse-gas emissions-reductions commitments) but with a tough objective inevitably requiring such teeth sooner or later (i.e. stabilization of atmospheric greenhouse-gas concentrations at levels which pose no threat of dangerous interference with climate, a goal requiring deep cuts in emissions).

Throughout that process, and in the continuing negotiations, the oil industry combined with coal and other fossil-fuel-related industries to try and stall governments' efforts to begin an international global-warming policy response commensurate with the threat. But this "carbon club" lobby, as it has become known (including organizations like the Global Climate Coalition the Global Climate Council, and the International Petroleum Industries Environmental Conservation Association), failed to derail the negotiations. The Convention on Climate Change has now come into force - it is, in other words, an instrument of international law - and at the Berlin Climate Summit in April, governments negotiated a mandate to agree a protocol on emissions reductions by 1997.

However, the prospects for achieving the stated goal look bad. OECD governments have proved either unwilling or unable in the five years of the climate negotiations to put in place policies capable of limiting national emissions. All major efforts to do so, such as the proposed carbon-energy tax in the EU, and BTU energy tax in the USA, have run into the sand. Electric utilities in 1995 are rewarded for generating rather than saving kilowatts to the same bewildering extent they were in 1990. Oil companies have come under no pressure to seriously begin planning for a future where efforts are being made to cut back on oil demand.

In parallel, depressing evidence that global warming is a major threat continues to build up in the technical journals.

3. Recent evidence that a warming "signal" is becoming clear, and related evidence of growing concern about the greenhouse (April - September 1995)

The contents of the premier scientific journals in the months immediately following the Berlin Climate Summit in April revealed a pronounced decrease in the level of uncertainty top climate- change researchers were prepared to ascribe to the view that the warming in recent decades might be due to reasons other than greenhouse warming. On 7th April, a researcher from AT&T;'s Bell Labs published a statistical treatment of the twentieth-century warming record showing correspondence between warming and a decreasing amplitude of the annual temperature cycle - the temperature difference between winter and summer. Had changes in incoming solar radiation been solely or largely responsible for observed warming, as greenhouse skeptics tend to argue, the reverse should have been the case. Solar variability, AT&T; researcher David Thomson concluded, "is at most a minor factor." (3) Thomson told New Scientist that "you almost have to invoke magic if it is not carbon dioxide. It's the only logical explanation."(4)

On 21 April, scientists at the US National Climatic Data Center reported that they had found a pattern suggesting that the US climate has turned towards a greenhouse regime in the last 15 years. They compiled data on climatic extremes expected to arise under greenhouse warming, including higher-than-normal daily minimum temperatures, extreme or severe droughts in warm months, and much-above-normal precipitation in cool months. Using this data, they calculated a Greenhouse Climate Response Index in order to express any persistent trends. The index has been consistently high since the late 1970s, in marked contrast to the pattern in earlier decades. Thomas Karl, the lead researcher, concluded that the probability that this can be natural fluctuation in a stable climate is only about 5%.(5)

In June came two other high-powered studies similarly dismissive of natural climatic variability as an explanation for the hot years of the 1980s and 1990s, this time in the global record. A team from Germany's leading climate lab, the Max Planck Institute for Meteorology, concluded that there is only one chance in forty that natural variability can explain the warming seen over the last 30 years. "At the moment there is no other convincing explanation than carbon dioxide for such a big change in temperature," a member of the German team, Gabriele Hegerl, reported. A second team at the USA's Lawrence Livermore Laboratory factored the cooling influence of sulphate aerosols (largely derived from coal burning) into the temperature record, leaving a clear greenhouse fingerprint since about 1950, when the growth of carbon dioxide emissions took off. Commenting on this in Science magazine, Thomas Karl said "you're seeing a shift in the overall scientific view".(6)

Then, on 1Oth August the results of the most sophisticated climate-model experiments yet performed were reported in Nature magazine. Researchers at the UK's Meteorological Office effectively simulated past climate variations using a coupled model (one linking both the atmospheric and oceanic components of the climate system) which also factored in the sulphate aerosol effect.(7) This breakthrough significantly boosted confidence in the accuracy of the models used for forecasting climate change in the future. Leading IPCC climatologist Tom Wigley wrote in a commentary that "'these results mark a turning point both in our ability to understand past changes and predict the future".(8)

The impression of a significant stiffening of scientific opinion on the question of "the signal" was reinforced at a conference of leading climatologists in Colorado, reported in Nature on 24th August. Rapporteur Michael MacCracken, summarizing many presentations, concluded that the evidence for an anthropogenic signal was becoming "quite compelling. Although greenhouse gases and aerosols are not yet convicted beyond all reasonable doubt (in the warming of recent decades), the case is becoming steadily stronger".(9)

And at the same time, the drip of worrying evidence that the feedbacks may be preparing to kick in, stoking up an amplifying effect for future warming, did not abate. In Science magazine on 25th August, a team of researchers at the US National Oceanographic and Atmospheric Administration reported that they had found isotopic evidence for a large sink for carbon dioxide on land in the northern hemisphere during 1992 and 1993. "Because carbon storage on land is likely to be more transient and vulnerable to anthropogenic and climatic perturbations than storage in the oceans," they concluded, "the current partitioning of CO2 uptake between the oceans and the land biosphere may well have significant implications for future increases in atmospheric CO2".(10) Within a week, as though to abate hopes that even the oceanic sink would hold up, came evidence in Nature magazine that the oceans may be losing fixed nitrogen. Fixed nitrogen, as the nutrient nitrate, is a major control on the abundance of phytoplankton. Denitrification - the degradation of nitrate by bacteria in areas of oxygen- deficient surface waters in the oceans - converts fixed nitrogen to free nitrogen or nitrous oxide, of no use to most plants. Studying nitrogen balances, Canadian and American oceanographers found evidence that warmer oceans will lose nitrate, so depleting phytoplankton, so boosting atmospheric carbon dioxide.(11)

On 10th September, the stiffening of scientific opinion reached the front page of the New York Times. The headline referred to a leaked draft copy of the IPCC's Second Assessment report, due to be published in December. It read: "Experts confirm human role on global warming."

Against the march of this kind of evidence and events, soon to be codified in the IPCC Second Assessment, the arguments of the small but vocal community of scientific skeptics are beginning to look increasingly flimsy.

4. The emerging reaction of the financial sector to the greenhouse threat

One of the few moving objects on the radar screen of the global greenhouse debate comprises the private financial institutions (insurance companies, banks, and pension funds), which are in some quarters starting to realize that their future profitability depends on abating the greenhouse threat, and hence - among other corollaries - the early take-off of clean-energy markets. The insurance industry fears that climate change can in principle inflict severe damage on global property-catastrophe reserves, and that concern is spreading to the banks and pension funds, who are just beginning to appreciate that they face potentially severe direct and indirect threats to investments.

Two quick examples illustrate the problem. A recent New York Times article on the impacts of climate change, reporting a second leak from the IPCC report, comments about the prospect of sea-level rise in a warming world as follows. "At the most likely rate of rise, some experts say, most of the beaches on the East Coast of the United States would be gone in 25 years. They are already disappearing at an average of two to three feet a year."(12) Consider the direct threat to the insurance industries interests inherent in this statement. There are over two trillion dollars of insured assets in US coastal communities.(13) A direct threat to banks' interests lies in the danger posed to debt investments, a threat which becomes a disaster if - as so many insurance chiefs now say is possible in an enhanced-greenhouse world - unlucky rolls of the dice cause a global insurance crash.

Talk has already started in the sector of a greenhouse-driven strategic adjustment of investment behavior. The Chartered Insurance Institute Society of Fellows set up a Study Group on climate change and insurance which concluded in a 1994 report that "the industry has a limited breathing space in which to gather its wits, and plan in a truly long-term timeframe." It recommended many options, one of which was that "all investment managers should modify their investment policies to take account of the potential direct and indirect effects of global warming."(14) Such options are discussed by industry actors further in the forthcoming Gerling book. In addition to the written word, I have participated in high-level discussions in insurance companies where options for greenhouse-gas risk abatement at source have been discussed. Such discussions show that, where progressive talk is currently aired, boardrooms are currently split, and so nothing has yet happened to change the status quo. I do not expect that situation to last. As I write this paper, my Financial Times carries a full-page advert by reinsurance giant Swiss Re. It shows the corporate logo bent over by winds, and reads "giant storms are triggered by global warming; this is caused by the greenhouse effect; which is, in turn, accelerated by man ...Swiss Re, together with its clients (the insurance companies of the world), is implementing a dedicated environmental strategy."(15)

In this process of awakening to the greenhouse threat / market driver, financial institutions are in the encouraging company of a progressive enclave in the gas industry. Bob Kelly, Executive Vice President of Enron, told the 1995 US Solar Energy Industries Association annual trade fair in San Antonio, Texas, that he believes that global warming will inevitably drive huge solar markets in the future. He wants to place his company - one of the largest gas companies in the world - firmly in the front lines of the solar revolution. "We think the multi-megawatt solar industry is ready to take off," Kelly said. "Sometime, our children will have to pay a carbon pollution cost. That could be a great big number. It could be bigger than the budget deficit. We think there is a great big market out there, and we are going for it." His company can now build 100 MW solar photovoltaic (PV) power plants, generating electricity at 5.5 cents per kilowatt hour: a price competitive with fossil-fuel power. Kelly subsequently addressed insurers and bankers on this theme at a Greenpeace - US Solar Energy Industry Association seminar in Washington DC (July 1995), and contributed a chapter to the Gerling volume.

5. Public opinion on the environment: growing concern, but not yet on the greenhouse issue

The chief lesson of the Brent Spar and French-nuclear-testing episodes in 1995 seems to be the volatile nature of publics in the mid 1990s when it comes to wilful environmental infringements. Market research in a number of countries suggests that core values on the environment, while routinely subordinate to unemployment as a concern, have reached a new and unprecedented level recently.(16) Both Shell and President Chirac catastrophically underestimated the impact on publics of their respective intentions. Organs such as the Financial Times, the Economist and the New York Times have all suggested that the Brent Spar affair marked a watershed in environmental politics.

The corollary of what climate scientists are saying about the enhanced-greenhouse threat today embodies a clear corollary that a critical mass of public concern about global warming may be not far off. When Mt. Pinatubo erupted in June 1991, NASA's Jim Hansen predicted that world average temperatures would be cooled by 0.5?C over the next few years. He was bang on. He predicted that as soon as the aerosols from the huge eruption disappeared from the stratosphere, the sequence of hot years in the 1980s would begin again. Right again. 1995 seems set to be the hottest, on the global average, since records began 140 years ago. The eight hottest have all been since 1980. In parallel, a suspicious sequence of worst-of-the-century droughts, drought-related wildfires, floods and storms has hit most continents since the late 1990s.(17)

If publics were to wake up in numbers to the global-warming threat, generating political currency for politicians, and looking for opportunities to give shape to their concern, where would the best avenue for consumer action lie? In the next section, I argue that the answer to this question lies in the area of solar power.

6. The central importance of solar power in fashioning sustainable economies

Solar energy production emits no greenhouse gases, and although energy efficiency and other renewables are vital components of a sustainable energy future (in no way do I intend to infer that their importance should be down graded) solar photovoltaic (PV) and solar-thermal energy are the core of the energy mix in many energy scenarios for the future, including for example both Greenpeace's and Shell's.(18) In addition, human enhancement of the greenhouse effect - awesome a problem though it is - sits at the head of a long list of other daunting environmental and societal problems which require that the developed and developing worlds proliferate solar energy as quickly as possible.(19)

Because China and India have huge coal reserves, which they will utilize unless better alternatives are made available, solarizing the developing world is probably the biggest of all environmental imperatives. But it is clear that that will not happen quickly or pervasively enough to arrest environmental ruin unless the developed world goes solar, or heads in that direction fast.(20) This sounds like visionary, but is in principle achievable with ease, even using today's solar technologies. As Shell's Head of Renewable Energy Supply and Marketing, Roger Booth, put it in February 1995, "all the world's energy could be achieved by solar many thousands of times over."(21)

The rooftop and building-integrated PV market in the developed world is potentially vast, and offers the best consumer-led key to solarizing the world. For example, BP Solar professes that putting solar panels of existing efficiency on the rooftops of the UK - 0.4% of the land area in that not optimally sunny land - would provide all that country's primary energy requirement.(22) Once a solar revolution was underway, led by explosive growth of the rooftop building-integrated and/or the other main solar markets (developing world off grid, and the solar PV power-plant market) there could be little doubt that its impact would spread - critically - into the transport sector, and ultimately lead to mass-production of zero-emission and very-low-emission cars: solar cars, hydrogen cars, battery cars, and hybrids of various kinds.

7. Adjunct reasons why progressive capital withdrawal from carbon-fuels may be inevitable, and advisable.

Delphi International's well-known 1994 report is the first financial-sector report analyzing threats to carbon-fuel investments arising from climate change.(23) The main message of that ground-breaking study is that the coal and oil industries' collective denial of the enhanced-greenhouse problem poses potentially severe threats to investments in those industries. For example, most greenhouse spokespersons in the oil industry contend that because the enhanced greenhouse is not the problem that the IPCC professes it to be, sea level will not rise appreciably in the next thirty years. The New York Times report based on the IPCC Second Assessment draft, as quoted above, showcases an interesting example of the problems involved in the reality-insulated oil- industry view. If there is indeed little threat from anthropogenically driven sea-level rise, presumably the oil industry will not enhance risk-management measures for existing coastal-infrastructure such as refineries. Indeed, the industry will presumably seek support in the capital markets for expansion of such infrastructure. It will be interesting to see how many banks, having read the IPCC second assessment, will prove willing to capitalize an oil company wanting to build a refinery with a 30 year lifetime on a coast.

On top of direct greenhouse-related threats such as this comes the prospect, in the post-Brent-Spar world, of politically-enforced major liability payouts, public-relations disasters, and huge infrastructure-upgrade costs arising from routine operations: for example in the oil industry's case as a result of the aging tanker fleet and the parlous state of the pipelines for delivering oil from frontier provinces. The main theme, in effect, is that fault lines have begun to appear in the idea that the oil industry can add a second century to the oil era. The intersection of the greenhouse problem with other escalating environmental problems suggests that the oil industry will experience severe capitalization problems in the decade to come.(24)

8. The enhanced-greenhouse threat not just as compound business threat, but generic business opportunity.

Putting the three key themes of this paper together - the ongoing greenhouse-awakening of the financial sector, the seemingly inevitable upwelling of public concern, and the technical readiness of solar technology - allows some encouraging crystal- ball gazing. If the financial sector did begin a greenhouse-driven strategic adjustment of investment behavior, the effect could be seismic, the more so if it intersected with a consumer-focused upwelling of public concern, and the translation of that concern into political currency and therefore increased governmental willingness to act. The private financial institutions own over half the equity in corporate America, for example. Even a switch of capital from carbon fuels at the margin could have a dramatic snowballing effect if a way could be found to divert it into solar markets. As Time magazine put it in March 1994, "the crucial role played by the $ 1.41 trillion insurance industry in the world economy could change the dynamic of the debate about global warming."

There are a number of modus operandi open to financial- sector actors wishing to act proactively on the question of greenhouse risk-abatement and loss-reduction. As I have argued elsewhere, options include participation in the policy debate at the climate negotiations themselves, sending unilateral signals in routine corporate practice favoring clean energy, and investment in the full gamut of clean-energy markets, not just the embryonic solar markets.(25)

The case for the financial sector to help create new markets as a route to greenhouse risk-abatement, loss reduction, and sustainable profit is now compelling. And it seems that it is showing the first signs of registering at the top of the banking industry, as well as the insurance industry. In September, the British Bankers Association submitted a paper to the annual meeting of the chief executives of the world's bankers' associations. It concluded as follows. "A lot of bank lending today is for long terms up to 40 or 50 years and often for 20 to 30 years. Within the lifetime of loans granted today climate change is forecast to have a dramatic impact upon industrial operations within 20 to 40 years." The paper discussed the need to monitor the climate negotiations closely, assessing that "at best it will enable banks to be full partners, thus protecting as far as possible existing business and safeguarding opportunities for future business; clearly there are enormous opportunities to finance new environmental developments and the development of alternative energies, amongst others."(26)

9. Conclusions

Contributions to the forthcoming Gerling book on climate change and financial institutions by financial-sector contributors capture the themes I have tried to define. As Dr. Sven Hansen, Vice President and Head of Environmental Management Services at the Union Bank of Switzerland, puts it, global warming is "the single most important environmental problem for the world today contamination and lender liability are only the tip of a banker's 'environmental iceberg'. Climate change is from my perspective, the mass lying underneath the water line and we can't neglect this part ...(it) will probably surface soon." Carlos Joly, Senior Vice President, Environment Policy and Investments at UNI Storebrand, adds, "prevention must occur through global cooperation before catastrophe develops. ...What we invest in long term, how we manage the assets we are entrusted with, should take into consideration avoiding causing harm to our clients through environmental deterioration. What good does it do us to cash in on investments 20 years from now if the world goes to hell partly as a result of what we invest in?" Bob Kelly, Co-Chairman of Amoco- Enron Solar - an oilman, no less - seizes on the business implications of this, in terms of opportunities. "Solar technology can play a major role in the global effort to limit CO2 emissions," he says. "Rooftop systems are already feasible." Hilary Thompson, Head of Environmental Affairs at the National Westminster Bank, offers a similar view from the banking sector. "Climate change holds implications in terms of funding new sectors, new growth markets, and solar energy is one - even if we do not understand it as an industry terribly well - where there are investment opportunities. "

The solar revolution is coming, it seems, and with it many benefits.

But it will be a race against time.


1. J.K. Leggett, editor, "Climate Change and the Financial Sector: the emerging threat, the solar solution," Gerling Akademie Verlag, Munich, in press.

2. "Climate Change: The IPCC Scientific Assessment," Intergovernmental Panel on Climate Change, Report to IPCC from Working Group I, edited by J.T. Houghton, G.J. Jenkins and J.J. Ephrams, WMO-UNEP, Cambridge University Press, 1990). This warming was reaffirmed in 1992 [Intergovernmental Panel on Climate Change, 1992 IPCC Supplement, Scientific Assessment of Climate Change, Final Report, Guangzhou, China, January 1992].

3. "Sun's role in warming is discounted," Science, v.268, p. 28-29, 7 April 1995: report on D.J. Thomson, "The seasons, global temperature, and precession," Science, v.268, p. 59-68, 7 April 1995.

4. "Fresh blow for greenhouse skeptics," New Scientist, 22 April 1995.

5. "US climate tilts towards the greenhouse," Science, v.268, p. 363-364, 21 April 1995.

6. "Studies say - tentatively - that greenhouse warming is here," Science, v.268, p. 1567- 1568, 16 June 1995.

7. J.F.B. Mitchell, T.C. Johns, J.M. Gregory & S.F.B. Tett, "Climate response to increasing levels of greenhouse gases and sulphate aerosols," Nature, v.376, p. 501-505, 10 August 1995.

8. T.M.L. Wigley, "A successful prediction?", Nature, v.376, p. 463-464, 10 August 1995.

9. M.C. MacCracken, "The evidence mounts up," Nature v. 376, p. 645-646, 24 August 1995.

10 P. Ciais, P.P. Tans, M. Trolier, J.W.C. White & R.J. Francey, "A large northern hemisphere terrestrial CO2 sink indicated by the 13C/12C ratio of atmospheric carbon," Science, v.269, p. 1098-1102, 25 August 1995.

11. L.A. Codspoti, "Is the ocean losing nitrate," Nature, v. 376, p. 724-725, 31 August 1995; reporting on R.S. Ganeshram, T.F. Pedersen, S.E. Calvert and J.W. Murray, "Large changes in oceanic nutrient inventories from glacial to interglacial periods," Nature, v.376, p. 755-757, 31 August 1995.

12. "Forecast trouble ahead for the world's climate," International Herald Tribune, 19 September 1995, reprinting New York Times story from the previous day.

13. F. Nutter, "A reinsurers perspective," in J.K. Leggett (editor) "Climate Change and the Financial Sector: the emerging threat, the solar solution," Gerling Akademie Verlag, in press.

14. "The impact of changing weather patterns on property insurance," Chartered Insurance Institute special report, May 1994.

15. The IPCC report will not provide backing for such a categoric statement on windstorm risk, concluding that there are uncertainties as to whether an enhanced-greenhouse world will be a stormier world or not. Many world-class meteorologists think it will, many profess not. With other categories of climate-related disaster, particularly drought-related wildfire and interior and coastal inundation, the uncertainty is far smaller.

16. Bob Worcester, "Business and the environment: the predictable shock of Brent Spar," Paper for HRH The Prince of Wales's Business and the Environment Programme, University of Cambridge, 18 September 1995. In this paper, the MORI Chairman shows that in the UK, for example, the "environmental activist" class in his typology has more than doubled in the last six years, along with a "spectacular" increase in the number of green consumers. 23% of the British general public claim to avoid using the services of a company which they consider has a poor environmental record. Worcester points out that this suggests "more than 9 million consumers are using their purchasing power to affect the behavior of manufacturers in this country to produce green. When you think that this includes one in three ABs, who are nearly one in five of the population and more than that in purchasing power, this is a powerful force."

17. J.K. Leggett, "The threats of climate change: a dozen reasons for concern," Chapter 2 in "Climate Change and the Financial Institutions: the emerging threat, the solar solution," Gerling Akademie Verlag, in press.

18. "Fossil fuels in a changing climate," Greenpeace International Special Publication, 1994; P. Kassler "Energy for Development" Shell Selected Paper, November 1994. The differences are as follows. In Shell's Sustained (energy) Growth Scenario, solar does not dominate the mix until after 2050, and it does so in a world where even more coal, oil and gas are being burned than today, and all recoverable oil is ultimately burned. In the Greenpeace Fossil Free Energy Scenario, solar energy is dominating the global energy mix soon after 2030, at which time the use of fossil-fuels has fallen to around half today's level and is still falling, so that some recoverable oil ultimately remains in the ground unused.

19. As well as global warming, solar proliferation meaningfully addresses the acid rain, air quality, water-quality and availability, deforestation, urban migration, and population problems. Solar cells emit no acidifying gases and offer air quality both by replacing the need for power plants, and when used to charge batteries or make hydrogen fuel, displacing gasoline. It can power water-purification apparatus and can make water by driving desalination. It can obviate the need to fell trees by powering solar cookers, and provide power for local economic activity, arresting the flow of millions to megacities. Finally, by providing light for reading, and power for refrigeration, it can improve literacy and health: two of the key drivers of high birth rates.

20. Many energy-policy discussions with developing-world diplomats at the climate negotiations have shown me that without clear evidence that solar technology - or for that matter wider clean-energy technologies - are the technology of choice for all, the search for development will inevitably be powered primarily by fossil-fuel-fired power stations. As well as showing the way to a new development paradigm, however, a massive solarization programme in the developed countries can accelerate the growth of solar markets in the developing world by lowering unit costs of the technology. The more the volume of production globally, the cheaper the price will go, and the more the 2 billion people currently without any electricity at all might be able to afford it.

21. R. Booth, "Renewable energy: dream or reality?" Presentation at the International Solar Energy Society 21st anniversary conference, "Renewable energy: what can it do for the environment," Royal Institution, 23 February 1995.

22. Rod Scott, Personal communication during visit to BP Solar's headquarters, Sunbury, 17 March 1995.

23. M. Mansley, "The long-term financial risks of climate change to the carbon-fuel industry," Delphi International, November 1994; and see Chapter 8, "A financial analyst's perspective," in J.K. Leggett (editor), "Climate change and the financial institutions: the emerging threat, the solar solution," Gerling Akademie Verlag, in press.

24. J.K. Leggett, "A looming capital crisis for oil? Taking bearings in the greenhouse in a post Brent Spar world," Paper for the Aspen Environmental Round Table "Global environmental investment challenges in downstream oil, gas, and power generation," Ritz Carlton, Aspen, Colorado, 18 September 1995.

25. J.K. Leggett, "Climate change and the insurance industry: solidarity among the risk community?" Greenpeace International Special Publication, February 1993; for accounts showing the evolving story of the insurance industry's awakening to the threat see also "Climate change and the future security of the reinsurance market: recent developments and upcoming issues for the industry," Journal of Reinsurance, v.1, no.2, p. 73- 95, winter 1993; "Climate change," a report presented to the 26th Annual Meeting of the Reinsurance Association of America, Ritz-Carlton, Laguna Niguel, California, 29 April 1994; "Climate change and the financial sector," Journal of the Society of Fellows, Chartered Insurance Institute, January 1995.

26. Paper tabled at the UNEP Round Table meeting on banks and the environment, London, 31 October 1995.

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