In the largest ever initial public offering on the Indian stock exchange, Coal India, a huge government-owned coal company, recently offered 10% of its shares to investors at home and abroad.

What was at stake was essentially a $35bn (£21bn) bankrolling of enhanced global warming by the capital markets. Yet Coal India's prospectus, crafted with the help of a clutch of big-name investment banks, did not mention climate change once in 510 pages of exhortation to invest.

And invest the fund managers did, unfettered by risk regulation or any meaningful requirement to place a value on the climate consequences of their scramble for short-term profit. The offering was oversubscribed 15 fold, and the stock soared on the first day of trading, 4 November, valuing Coal India at $49bn.

Those ending up owning stock include 484 foreign funds, 195 mutual funds, 44 insurance companies, and many banks. Many of these investors were using ordinary citizens' money, and this would have included the nest eggs of people worried about global warming and its dire impact on the world by the time they retire. But those people are mostly allowed no say in where their pension funds, insurance premiums, and banking deposits are invested.

In Cancún, later this year, the world's governments will return to their annual climate summit completely stymied on even the smallest cuts in greenhouse emissions. At the same time, investment bankers will be back in their casinos with barely a light slap on their wrists after nearly plunging the world into depression in 2008.

They are permitted to gamble once again with the global economy in the course of their routine investment business, this time knowing that the citizenry will be there to bail them out again. They are also permitted – as the Coal India IPO shows – to gamble with the global climate in the course of their routine advisory business, bringing coal to the markets by the gigatonne, without the requirement for a single item of liability accounting on the global balance sheet.

Indeed, in this case it is not so much a gamble as a known outcome, if you believe the vast majority of climate scientists. As floods and wildfires have shown Pakistanis and Russians this summer, a few extreme events can visit ruinous setbacks on economies. Keep burning coal at anything like the rate we do today, and such events will compound until they destroy wealth faster than it can be created.

Whither even basic risk assessment? Whither fiduciary responsibility? So long as you are targeting high profits in the very short-term, you can feel free to fry our childrens' future and to use our citizens' money to bankroll the cooking fat. This in essence is the default licence that governments and regulators have handed to the financial-services sector. How much more suicidally dysfunctional can modern capitalism get?

On the same day Coal India shares started trading so too did Enel Green Power's. Enel, the Italian energy giant, had floated its renewables arm at the same time as Coal India, but its IPO was a flop. Institutional shareholders were particularly unsupportive. Some cited long-term fears for the viability of renewables generally. Shares duly fell on the first day of trading. Again, this spectacle involved fund managers investing and trading for people who, given a say, might well have chosen to factor climate change into the decisions taken.

In a civilisation intent on ensuring its own survival, much less prosperity, we would be using home-made sources of renewable energy, with great efficiency and fairness, and investing our own money to roll out ever more green infrastructure with which to build resilient local and national economies, so creating worthwhile jobs for our children.

Opinion polls consistently show that this is the kind of world most of us would like to be living in, and the particularly galling thing is that we already have the technologies and strategies with which to deliver it. They involve things like zero-carbon homes, electric cars used as mobile energy storage plants, smart grids to optimise power use, and green bonds for financing the whole thing.

But in the real world, today, such a vision can be glimpsed only in oases. Tomorrow might perhaps be different and better, given the growth rates of renewables industries, notwithstanding the languishing share prices of many renewables companies. But for now the Coal India IPO illustrates the enormity of the mountain we have to climb in order to arrive there.

Read more at http://www.carbontracker.org/.

Jeremy Leggett is executive chair of the solar power company Solarcentury, He also publishes a blog at www.jeremyleggett.net



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