The world's largest investors are urging governments and climate change negotiators headed to the Cancun summit this month to significantly step up their efforts against global warming. A statement signed by 259 investors who collectively represent over $15 trillion in assets--more than one-quarter of global capitalization--calls for policies that can help encourage private investment into low-carbon technologies.

"Private investment will only flow at the scale and pace necessary if it is supported by clear, credible, and long-term policy frameworks that shift the risk-reward balance in favor of a less carbon-intensive investment," says the statement released November 16.

In addition to domestic policy frameworks that catalyze renewable energy, energy efficiency and other low-carbon infrastructure, the investors are also calling for an international agreement on climate financial architecture; delivery of climate funding; robust measurement, reporting and verification; and international finance tools that help mitigate the high levels of risk private investors face when making climate-related investments in developing countries.

Global clean energy investments of roughly $500 billion per year are needed by 2020 to restrict global warming to below two degrees, according to Bloomberg New Energy Finance and the World Economic Forum. Public and private investment in clean energy currently total just $150 billion to $200 billion a year, Mindy Lubber, president of Ceres and director of the U.S.-based Investor Network on Climate Risk, said during a news conference announcing the statement.

As much as 85% of total investments required to address climate change must come from private sources, said Ole Beier Sorensen, chairman of the Institutional Investor Groups on Climate Change and chief of Research and Strategy at ATP, a leading European pension fund provider.

"Climate change if left unchecked threatens economic disruptions exponentially more serious than the recent financial meltdown," said Jack Ehnes, CEO of the California State Teachers' Retirement System (CalSTRS). The costs of mitigating climate change are estimated at 1% to 2% of global GDP, while failure to act on climate change impacts could cost up to 20% of the global GDP by 2050, he said.

Ehnes urged Congress to take a cue from smart energy policies that are attracting private investment and creating jobs in California. More than 40% of all clean tech venture capital funding went to California businesses in 2009. "More globally, clearly those countries that have had better clarity around policy are going to ultimately attract greater capital flows," he said.

"There are tremendous opportunities if we move towards a green economy ... Energy efficiency is the low hanging fruit, the immediate target," said former U.S. Senator and Representative Tim Wirth, president of the United Nations Foundation. Both he and Mark Fulton, co-chair of the United Nations Finance Programme's Climate Change Working Group and global head of Climate Change Investment Research at Deutsche Asset Management, pointed to clean energy initiatives working in other countries.

Innovative clean technology "is the strongest possibility we have for jumpstarting the economy, creating jobs in the U.S., (and) being a national and international player in this new technological field," said Lubber. "This issue is as much an economic driver as it is an environmental problem or a national security debate."