Environment: Gore Says Markets are Key in Battle to Combat Climate Change

According to Gore, the profit motive may do more to aid to call to stop global warming than government edicts, rules and regulations.

Al Gore, the former vice president of the United States and leading environmental campaigner, says that market forces will play the pre-eminent role in the fight to combat climate change in an exclusive interview published by Euromoney.

"In some cases the commitment of larger banking institutions has run ahead of the expertise and knowledge that currently exists. And that's OK. It's right to try to understand the best ways to maximise the opportunities. It's a massive shift, and it's going to pick up speed and be one of the largest movements in the history of business," comments Gore.

In a special report that will gain widespread distribution at the annual World Bank/IMF meetings in Washington, Euromoney looks at how green finance will change the fabric of the global capital markets in the years to come.

Ted Roosevelt, chairman of Lehman Brothers' Global Council on Climate Change, says: "The economic transformation driven by climate change, we believe, will be more profound and deeper than globalization, as energy is so fundamental to economic growth."

Michael Klein, chairman and co-CEO of Citi Markets and Banking, who have committed $50 billion to combating climate change over the next 10 years, says: "The impact on funding markets will be transformational. The sectors that will be most affected by dealing with climate change are infrastructure, transport, energy and technology. These account for up to half the global financing in any given year. The impact on financing could be hundreds of billions of dollars."

Bankers are already hoping that the carbon trading market will become one of the largest global commodities markets, and are looking to opinion formers such as Vice President Gore to promote the role that markets can play in carbon reduction to regulators in the largest polluting countries such as the US and China that have yet to adopt a cap and trade system.

Gore believes cap and trade will have to co-exist alongside taxation. "The carbon trading regime is like a bucket with a large whole in it. It will become more universal. I think it will become the principal way that the international political community addresses carbon emissions. But there will be a growing recognition that CO2 taxes alongside cap and trade represent the most efficient way of reaching the desired outcome."

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