Climate Finance and Community Propserity

According to the Task Force on Climate-related Financial Disclosures:

For many investors, climate change poses significant financial challenges and opportunities, now and in the future. The expected transition to a lower-carbon economy is estimated to require around $1 trillion of investments a year for the foreseeable future, generating new investment opportunities. At the same time, the risk-return profile of organizations exposed to climate-related risks may change significantly as such organizations may be more affected by physical impacts of climate change, climate policy, and new technologies. In fact, a 2015 study estimated the value at risk, as a result of climate change, to the total global stock of manageable assets as ranging from $4.2 trillion to $43 trillion between now and the end of the century.

Organizations that invest in activities that may not be viable in the longer term may be less resilient to the transition to a lower-carbon economy; and their investors will likely experience lower returns. Compounding the effect on longer-term returns is the risk that present valuations do not adequately factor in climate-related risks because of insufficient information.

Just that right there could keep an army of people busy. But we’re not just talking about traditional finance here. Several organizations are already making strides in new local ownership models and community-powered ventures and investments, including the Institute for Local Self-Reliance and Common Future. Author Marjorie Kelly, in Keeping Wealth Local, sums up the power of individual community and rural residents:

Community prosperity rests on the ability of residents to make the most of the resources they have on hand. This means (1) recognizing the assets a community has, (2) managing them in effective ways, and (3) using appropriate ownership and wealth-control designs to define, capture and benefit from those assets.

Models of shared ownership include cooperatives, employee ownership, community land trusts, community covenants and easements, and more. The power of communities to produce what their people need locally and to provide opportunities for everyone to contribute in their own unique ways is largely untapped and waiting to be explored. Author Michael Shuman and other have provided a wealth of information on these topics over the years; view presentations by Michael here and here.