Your Profitable Climate Change Solution is Waiting for You
Fossil Fuel Economy
We were all born into a fossil fuel economy. We inherited the benefits and now we are inheriting the responsibility of burning these fuels. What do we do about it? We can certainly be aware of our energy usage and our purchasing choices. We can even donate to worthy environmental organizations. But, taking responsibility doesn’t have to be a sacrifice. We can all be an active participant in the carbon free transformation.
Why not us?
Economics and technology have caught up with the problem of global warming. Wind and solar are some of the lowest cost forms of energy generation. Energy efficiency projects often have a better return on investment than energy generation. The cost of energy storage continues to fall. All of this will eventually overtake conventional energy. Investors will make money on it.
Much of the fossil fuel economy that we are now responsible for is out of our control. Why not counterbalance that burden with something that is in our control, is not a sacrifice, and is measurable? Anyone can measurably counterbalance their footprint by using the Carbon Xprint method. This positive feedback approach invests $40 in certified green project financing for each ton of carbon footprint. This can be accomplished by buying individual bonds or buying shares in a green bond mutual fund. These green investments build the renewable energy, energy storage, and energy efficiency infrastructure we need to keep global temperatures from rising above 2 degrees Celsius. Think of it as war bonds for climate change. The IEA estimates that we will need at least $USD 3.5 trillion of this type of investment per year until 2050 to accomplish this goal. Since it is an investment, the investor is returned interest and the principle at the end of the term. This is a targeted and measurable diversification of an individual’s savings. A simple diagram illustrates the process.
The amounts are relatively small…
Consider this example:
- The Average American has a 16-ton carbon footprint
- The average green bond term is less than 5 years
- The S&P Green Bond Index has returned 3.07% over the past 5 years
The table below shows what it would take to counterbalance the average American’s carbon footprint. Starting at year 6, the principal and interest from 5 years earlier would be reinvested. The additional investment amount at year 6 to counterbalance their footprint is zero. After 5 years one could let the money ride and counterbalance their footprint for the rest of their lives all while making a few hundred dollars a year.
No matter what combination of policies and technologies we use to solve the problem of climate change, we will still need trillions of dollars in capital investment to pay for it. We can be an active part of the solution by diversifying a small portion of our savings to counterbalance our carbon footprint.
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Certification bodies include the Climate Bonds Initiative, Green Bond Principles, Investor Confidence Project, and Passive House.
