What have we been doing wrong? How can we fix our approach to climate change?

As we approach COP 30—the UN Climate Change Conference set to take place in Brazil—we are reminded that while the fight against climate change continues, it has been a pressing issue for over fifty years. On Thursday, Barnard College hosted “Pricing the Priceless,” a discussion featuring author Paula DiPerna and Dr. Kurt Semm, aimed at providing insight into the imperative changes that must take place in order to achieve net-zero emissions. 

In this event, Paula DiPerna and Dr. Kurt Semm discussed the importance of using economics to fight climate change rather than allowing it to continue damaging the planet. DiPerna, an environmental activist, wants to dismantle the stereotype that banking and environmentalism are incompatible. Instead, banks must incorporate investment opportunities into clients’ portfolios to effectively combat climate change. 

DiPerna started the discussion by bringing our attention to Uber, a company that is worth billions and continues to grow in value everyday. The company generates profit by servicing employees’ cars through software that connects drivers with their clients. While the company doesn’t hold much physical capital, they are still worth billions. Uber is valued very highly—but what is the value of our planet, which has been providing countless services and resources to humanity since the beginning of time? 

So, how is it that our planet is valued at zero? Companies fail to compensate nature for the destruction that they have caused and continue to overlook the damage they inflict. BlackRock, an asset management company, has admitted that 50% of our GDP relies on the planet’s seven systems. These systems include the heliosphere, geosphere, atmosphere, cryosphere, biosphere, anthrosphere, and the hydrosphere. Nature is deteriorating rapidly, with six out of the seven systems essential for maintaining a habitable planet now in the red zone. 

How do we fix this? DiPerna’s solution focuses on “marrying science and economics,” which means redesigning the current financial system. Earth’s natural resources need to be managed as a portfolio. The World Bank is a prime example of how institutions can establish a partnership between money and the environment. They have achieved this by issuing AAA-rated Sustainable Development bonds. These bonds offer investors the opportunity to finance green projects in countries such as South Africa. The funds from these projects are used to restore and rebuild national parks, which in turn attract tourists. 

Another company that has focused its energy on investing in nature is Blue Forest, a non-profit financial organization founded by graduates of the University of California, Berkeley’s business school. This non-profit organization developed the Forest Resilience Bond to finance forest maintenance and restoration efforts, aiming to prevent wildfires that could hurt millions financially. The idea here is to avoid the extensive costs from wildfires by regularly taking care of forests using the investments from these bonds. Insurance companies, neighbors, and businesses stand to benefit significantly from these bonds, as they would only pay a fraction of the extensive costs typically incurred from wildfire damage.

As the discussion was coming to an end, DiPerna encouraged the audience to view these examples as inspiration for the future of combating climate change. She also urged students to use their time in college to learn how to advocate for our environment using finance and economics. She ended with the words “Follow the money”—an unusual remark for a climate change discussion, but one that may ultimately be the answer.

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