AFL-CIO President Richard Trumka spoke to more than 400 leading investors at the Investor Summit on Climate Risk & Energy Solutions at the UN on January 12, 2012 and proposed hosting a dialogue on the risks of climate change and the need to move forward in a way that ensures broadly-shared prosperity and a sustainable future.
The Investor Summit on Climate Risk & Energy Solutions is co-sponsored by Ceres, the United Nations Foundation, and the United Nations Office for Partnerships.
Remarks by AFL-CIO President Richard Trumka at the UN Investor Summit on Climate Risk
Good afternoon. I am honored to be here with all of you. And thank you, Denise (Napier), for that kind introduction and all your work to protect the pensions of public employees of the state of Connecticut. I also want to express the thanks of the labor movement to Tim Wirth and the United Nations Foundation, and to Mindy Lubber and her team at CERES, not just for organizing this event, but for all you’ve done to focus investors on the opportunities for investment in addressing climate change as well as the risks of failing to address climate change.
Today, as we meet together, scientists tell us we are headed ever more swiftly toward irreversible climate change—with catastrophic consequences for human civilization. We must have a stable climate to feed the planet, to ensure there is drinking water for our cities but not floodwaters at our doors. A stable climate is the foundation of our global civilization, of our global economy—the prerequisite for a profitable investment environment.
And to those who say climate risk is a far off problem, I can tell you that I have hunted the same woods in Western Pennsylvania my entire life and climate change is happening now—I see it in the summer droughts that kill the trees, the warm winter nights when flowers bloom in January, the snows that fall less frequently and melt more quickly.
Even so, some will ask, why should investors or working people focus on climate risk when we have so many economic problems across the world? The labor movement has a clear answer: Addressing climate risk is not a distraction from solving our economic problems. My friends, addressing climate risk means retooling our world—it means that every factory and power plant, every home and office, every rail line and highway, every vehicle, locomotive and plane, every school and hospital, must be modernized, upgraded, renovated or replaced with something cleaner, more efficient, less wasteful.
Taking on the threat of climate change means putting investment capital to work creating jobs. It means building a road to a healthier world and a healthier world economy–one less dependent on volatile energy prices, one where many more of us have the things that modern energy makes possible.
Not since World War II – 70 years ago – have we in America faced an equivalent national challenge. And working people are ready to rise to that challenge—to invest our pension capital, to put on our hard hats, to get the job done. Because this is the kind of challenge that America has always ridden toward greatness.
But today we have to face the reality that at least in the United States, we are not acting fast enough. And why is that? Why is that, when tens of millions need work, when investors have trillions in cash parked making almost nothing and the risks of doing nothing are mounting?
Here’s an important part of the answer. Too often, we have failed to consider who bears the cost of change and ensure that change is managed fairly and respectfully. And when we do that, no matter how important the reasons might seem, we sacrifice the chance to build the power to move forward. The only way for our democracy to act is for those who care about climate change to engage with the people whose livelihoods are tied up with carbon emissions. All of us—investors, companies, workers, environmental activists, governments—need to be part of this dialogue. Any other approach to addressing climate risk is not just fundamentally unfair, it simply won’t work in our democracy.
Now, this dialogue should be connected with responsible, comprehensive public policy making. It was through just such a process of dialogue that the AFL-CIO came to endorse the House Climate Bill in 2009. But it is clear that as long as Congress is effectively controlled by climate change deniers, all of us—investors, companies, workers and the broader public, must take action ourselves. So a year ago, as the climate bill failed in Congress, as the jobs crisis deepened, and as workers’ pension funds continued to suffer from microscopic fixed income yields, the American labor movement decided we couldn’t wait—we had to act to help advance profitable, risk weighted investments that would create jobs and address climate change.
We started with investment areas we knew well—the AFL-CIO’s Housing Investment Trust started investing in energy efficient retrofits of multifamily housing. And then, with the help of CERES, and then the Clinton Global Initiative, we laid out an ambitious program for investing in building retrofits, transportation, energy and educational infrastructure.
The AFL-CIO, our Building Trades Department and our affiliate the American Federation of Teachers went public with a plan at the Clinton group’s first American meeting last June. That commitment involved a labor movement pledge to work together with pension funds, money managers, experts and public officials to see that $10 billion of new capital was allocated to job creating infrastructure investment over the next five years, together with $20 million in immediate investment in energy efficient retrofits. We also pledged to retrofit our own headquarters building in Washington as an example of what could be done relatively quickly and easily.
Six months later, more than $200 million in workers’ capital has been invested in energy efficient retrofits, including a brand new partnership between the labor movement and the state of Oregon’s Cool Schools program to retrofit Oregon schools. More than $1.2 billion in workers’ pension assets have been committed to job creating infrastructure investing—with new efforts underway in New York, Oregon, and other states. I know that Jack Ehnes is here today from CALSTERS, and I want to acknowledge the leadership of CALSTERS and CALPERS, together with California Treasurer Bill Lockyer, in launching these key infrastructure initiatives. And this spring the AFL-CIO will launch our own building retrofit, complete with solar paneling.
So I’m pleased to be able to say that today, the American labor movement is in the problem solving business — looking for profitable investment opportunities that address climate risk and create jobs. We’re looking for partners, and we’re already working with many of you here today directly and indirectly to move capital to profitable and productive purposes, to step forward in addressing climate risk.
But we have learned something else important through our work this past year. By themselves, capital markets will not properly incorporate climate risk and reward into pricing investment opportunities. Climate risk in the short run is an externality—but in the long run diversified investors will bear the costs of climate change.
That’s why investors need, for our own economic reasons, government policies to make sure that critical investments get made—investments in building retrofits, in high speed rail and the smart grid, in carbon capture and sequestration. That’s what comprehensive climate legislation is about—and that’s why we as nation must return to the work of passing a climate bill.
That’s why labor and environmental organizations jointly created the Apollo Alliance and the Blue Green Alliance to focus on creating good jobs and a cleaner planet. That’s what the UN sponsored COP process, which met most recently in Durban, South Africa, is all about—and it’s another effort strongly supported by the global labor movement. That’s what efforts led by CERES at least to require disclosure by companies of the impact of climate risk is designed to address—to give the capital markets better information on a company by company basis and get prices to better reflect the realities of risk.
And so these political realities bring us back to the point about fairness and dialogue. I want to take a few minutes to give you a deeper sense of how serious a challenge the problems of fairness and dialogue are to the agenda of addressing climate risk—and then lay out a proposal to you.
First, what do I mean by unfairness? Half of the electrical power in the United States comes from coal. This has been true for years. People I grew up with dig the coal that lights the lights and heats the buildings all across this country today. The world we know exists because coal miners go down to the mines. But the carbon emissions from that coal, and from oil and natural gas, and agriculture and so much other human activity– causes global warming, and we have to act to cut those emissions, and act now.
Now, some people’s response is to demand that we end all coal production now—they say “End Coal.” Never mind that such a thing is simply not going to happen—there is no substitute now for metallurgical coal and if we stopped burning coal this afternoon and cut the power in the U.S. grid by 50 percent, as Mayor Bloomberg advocates, he’d be reading handwritten memos by candlelight this evening. Given that reality, it’s important to think about how that slogan is heard in places like my hometown of Nemacolin, Pennsylvania.
Nemacolin lives on coal—the coal mine my grandfather and my father went down to every day of their working lives, the power plant the mine feeds, the rail lines that carry coal to other plants. When these folks hear “End Coal,” it sounds like a threat to destroy the value of our homes, to shut our schools and churches, to drive us away from the place our parents and grandparents are buried, to take away the work that for more than a hundred years has made us who we are.
So why, in an economy without an effective safety net, would the good men and women of my hometown and a thousand places like it surrender their whole lives and sit by while others try to force them to bear the cost of change.
The truth is that in many places – and not just places where coal is mined – there is fear that the “green economy” will turn into another version of the radical inequality that now haunts our society—another economy that works for the 1% and not for the 99%.
So if we are going to build an innovative, sustainable, climate friendly American economy, if we are going to rebuild, restore, modernize or replace everything we inherited in just 30 years, we are going to need the energies, talents, passion and hard work of more than some regions or some Americans. No, the job we have to do is too big. We need the skill and effort of all of us. Our enemy in this great challenge, as always, is fear. Sometimes it seems like fear, and the power of money, has paralyzed our government. But the antidote to fear is trust.
So how can all Americans sit down together and develop trust? I think it begins with a commitment—a challenging and difficult commitment—that we are going to measure our approach not by how well it fits the needs of the well-positioned. We must ask ourselves, “How well does this pathway serve the least, the hardest to reach, the most likely to be left behind?” Places like West Virginia and the Ohio Valley must come first, not last.
How can this happen? Let’s think about the new EPA emissions rules for power plants. All of the unions of the AFL-CIO want to see coal fired power plants retrofitted immediately to cut back on mercury and sulfur emissions—those retrofits create good jobs, save lives. We oppose anyone who would take away the Environmental Protection Agency’s authority to keep our air and water clean. But power plant and mine workers want to know that if their employers commit to doing the retrofits, they will get the time to complete them. Surely through dialogue common ground can be found between workers who want the retrofit jobs and clean air and public health advocates.
But we need to be honest that mass unemployment makes everything harder and feeds fear. The AFL-CIO has not taken a position on the Keystone pipeline—unions don’t agree among ourselves. But we cannot have a trust building conversation about it unless opponents of the Pipeline recognize that construction jobs are real jobs, good jobs, and supporters of the Pipeline recognize that tar sands oil raises real issues in terms of climate change.
For our part, the AFL-CIO believes that honest, constructive dialogue between workers and their communities and environmental advocates, between investors and companies can forge pathways to fair and politically sustainable change—and that without it, we will not move forward. And we are ready to help lead that dialogue—to work together with others to shape a process for how we are going to address climate risk by putting America back to work, how we are going to build a smart grid and retool our vehicle fleet, catch up with our foreign competitors on high speed rail and wind and solar, retrofit coal plants and commercial buildings and modernize industry, how we are going to help communities prosper when coal plants and mines are closed, how we are going to create jobs for out of work construction workers—jobs that build America’s competitiveness, while we turn our nation’s economic future in a low carbon emissions direction.
And so I am closing with a proposal that all of us sit down together on the basis that we live on one planet, and that we share a common humanity that requires respect for each others’ families and communities.
In particular we need dialogue between environmentalists and workers and communities about the future of coal. About what the global labor movement calls a Just Transition to a low carbon emissions economy. And the AFL-CIO is ready to host that dialogue.
Addressing climate risk is the path to a competitive, profitable future for investors, but the path is only open if it is a path to an economy that works for the 99% who seek good jobs, economic security and healthy communities—not just in New York, but in Nemacolin, and in countries around the world, from Australia to Poland to South Africa to China, countries that face the same issues and share the same climate with you and me.