The 1997 conference produced the Kyoto Protocol, a greenhouse gas reduction agreement, which most industrialized countries signed.  President Bill Clinton signed the Protocol, but Congress did not ratify it. In 2005, President George W. Bush rejected the agreement.  The Kyoto Protocol was set to expire this month; however, it has now been extended to 2020.  The Protocol actually set binding targets for most industrialized countries to reduce greenhouse gas emissions.

In 2009, there was agreement that the UNFCC should take actions necessary to keep the average global temperature from rising more than 3.6 degrees Fahrenheit from the temperatures recorded just before the start of the Industrial Revolution.  Today the average global temperature is 59 degrees and the temperature not to be exceeded is 60.3 degrees. Emissions are increasing rapidly, especially among developing countries using coal, and the feasibility of the international goal to control the global temperature is questionable.

At this year’s conference, there was agreement that the richest countries should provide financial aid to the poorest nations for the “loss and damage” of climate change since the poorest countries have contributed the least to the problem and are also the most vulnerable.  However, the process for determining the amount of aid and how it will be distributed is yet to be decided.

Delegates also decided that a new international agreement will be developed by 2015 and take effect in 2020.  China and the U.S., the world’s two largest emitters of greenhouse gases, will figure prominently in the new agreement.  Although China is classified as a developing country, it is the largest emitter and soon will be the world’s largest economy.

Global emissions of carbon dioxide are at a record high and developed countries are principally responsible as a result of more than 150 years of industrial activity.  The pace and scale of actions by the international community to reduce emissions and concentrations of greenhouse gases is of great concern.

Carsten is Portfolio 21 Investments' founder and Chairman. He has 30 years of experience in socially and environmentally responsible investing.

In my opinion, the movement’s last demand is idealistic and not likely to be achieved.  As a result of the U.S.’s extensive supply of low priced shale gas, I believe that natural gas will continue to be a replacement for more carbon intensive coal and oil.   That being said, I do agree with the group that hydraulic fracturing poses significant environmental and health consequences.  Methane is the principal component of natural gas and is a potent greenhouse gas.  Over a 100 year time span, methane is over 20 times more effective in trapping heat in the atmosphere than carbon dioxide.  Beyond methane releases, natural gas production creates other air emissions that can have negative impacts on local air quality and on global climate change.

The chemicals used in hydraulic fracturing vary depending on geologic formation, but can include carcinogens such as benzene, arsenic, lead, and other toxic chemicals, such as hydrochloric acid, ethanol, diesel, and sodium hydroxide.  The total amount of toxic chemicals used during hydraulic fracturing can be as high as 110,000 gallons per well and is typically around 25,000 gallons[i].  Toxic chemicals have both human and environmental health impacts and can have long-term effects due to persistence, bioaccumulation, and carcinogenicity.

It is estimated that hydraulic fracturing uses between 2 and 10 million gallons of water per well[ii]. The extraction of such large amounts of water has raised concerns about drawing down drinking water aquifers.  Methane contamination of drinking water (shallow groundwater) has also been documented.[iii] While dissolved methane in drinking water is not characterized as a health hazard for ingestion, it is a fire hazard.  In the U.S., a recent Environmental Protection Agency investigation in Wyoming concluded that contaminants from fracturing fluid were released into the drinking water aquifer[iv].

Given these known environmental and health consequences, it is imperative to close loopholes exempting oil and gas companies from U.S. environmental regulations.  Currently, because of an exemption known as the “Halliburton loophole,” the EPA does not regulate the injection of fracturing fluids under the Safe Drinking Water Act.  Another loophole allows the oil and gas industry to emit toxic air pollutants without the same limits imposed on other industries.

Both of these loopholes are actively being protested by citizens and politicians alike.  To add your voice, join the Natural Resources Defense Council’s campaign to repeal the legislation that created oil and gas loopholes.

The amount of fresh water on the planet has remained fairly constant over time as it is continuously recycled through the atmosphere, until very recently.    The earth’s population has exploded and is expected to increase by another 20% to 30% over the next few decades.   This means that competition for clean water is intensifying on an exponential basis.  Unfortunately, humans have proven to be inefficient water users.  According to the United Nations, water use has increased at more than twice the rate of population growth in the last century.

Competition for fresh water is already fierce in the commercial sector.  Agriculture claims the bulk of fresh water worldwide, soaking up around 70%, and industrial uses consume another 22%.  The remaining 8% goes to city and home use.    Furthermore, new research indicates that the world’s unquenchable thirst for fresh water is causing sea levels to rise faster than they otherwise would due to climate change.  Trillions of gallons of water pumped out of underground aquifers, rivers, and lakes are reaching oceans through rivers and evaporation from the soil.

As the fresh water deficit rises, companies that offer viable solutions may spell opportunity for investors.  Many corporations are already working to address the fresh water deficit.  Investors who are aware of the issues may be better informed and better positioned to manage the risk and opportunity of the fresh water deficit.

Tony is Senior Portfolio Manager with Portfolio 21 Investments.  He has 15 years of experience in the field of investment management.

Rio + 20 has two themes:  a green economy in the context of sustainable development and poverty eradication, and the institutional framework for sustainable development.  The conference is focused around these two themes under seven priority areas: jobs, energy, sustainable cities, food security, water, oceans, and disaster readiness.  The Earth Summit in 1992 closed with adoption of Agenda 21, a blueprint to rethink economic growth, advance social equity, and ensure environmental protection.  The expectation is that governments attending Rio + 20 adopt practical measures for implementing sustainable development.

In advance of the summit, the United Nations Environment Program (UNEP) published its fifth Global Environmental Outlook (GEO-5) report.  The report assesses what it considers the 90 most important international sustainability objectives.  GEO-5 indicates that only four have seen substantial progress: eliminating the production and use of ozone-depleting substances, removal of lead from fuel, improving access to clean water, and increasing research to reduce marine pollution.  Some progress was shown in 40 goals and little or no progress was detected for 24 goals, including climate change, fish stocks, desertification, and drought.  According to the UNEP, this is evidence that global treaties need to have quantifiable targets in order to succeed.  As a result, the agency is calling for specific targets at the Rio + 20 Conference.  As the UN Under-Secretary General and UNEP Executive Director Achim Steiner says, “GEO-5 reminds world leaders and nations meeting at Rio + 20 why a decisive and defining transition towards a low-carbon, resource-efficient, job-generating Green Economy is urgently needed.  The scientific evidence, built over decades, is overwhelming and leaves little room for doubt.”

While it is clear much work needs to be done to strengthen our global environment, political realities may impede significant progress.  In May, United Nations Secretary General Ban Ki-moon said that negotiations leading to the Rio + 20 conference had been “painfully slow.”  According to an article in The Guardian, it’s been difficult to engage world leaders.  With President Obama focused on his re-election and European leaders focused on the financial crisis, negotiations have been left to personnel without the political power to make decisions that would result in a breakthrough agreement.  According to the article, Ban Ki-moon said that negotiations were bogged down in narrow national interests, overshadowing the need to set the world on the right track for sustainable growth.  For some, this has painted the Rio + 20 conference with skepticism and it is questioned if significant progress can come of the meetings.

While political realities have the potential to overshadow the conference, there is in fact opportunity.  Governments, the private sector, and civil society have an opening to establish global targets recognizing the ecological limits of the planet and work to establish initiatives and incentives that operate within those boundaries.  Indeed, the long term health and viability of the planet is at stake and it will take true leadership to let go of myopia and create a path that looks beyond the next election cycle or annual earnings report.

Emily is a Senior Research Analyst with Portfolio 21 Investments. She has 9 years of experience in the environmental field.

As we all recall, on April 20, 2010 the Deepwater Horizon oil drilling rig exploded.  Eleven men were killed and a seabed well ruptured, which allowed approximately 210 million gallons of oil to enter the Gulf’s saltwater churn.   In addition to the oil leaked from the well, an additional 2 million gallons of chemical dispersants were introduced into the coast’s ecosystem to break up the heavy crude oil.*

Two years later, monitoring and research on the Gulf coast have yet to make clear scientific links between health concerns, food safety, and the oil spill.  The U.S. Environmental Protection Agency reports that it monitored for a range of air pollutants during the oil spill and cleanup.  The EPA states that its analysis “did not detect levels of air pollution higher than what is normal on the Gulf coastline for that time of year.”  However, critics question whether the government has gathered enough data to be able to declare the air safe, and noted that poly-aromatic hydrocarbon levels were not measured for days after the spill.  There is also concern that the health effects of the chemical dispersants are understood even less, and may have magnified in toxicity when combined with the crude oil.  Residents, specifically those involved in the clean up efforts, have reported exhaustion, headaches, stomach pains, and chronic coughs.

In addition to human health impacts, many scientists believe that the chemicals used to clean up the spill have induced ecosystem-wide changes, such as an increase in toxic algal blooms or interference in the absorption of arsenic by oil-coated marine rocks, which has increased the levels of this toxin in seafood.  According to a survey led by the University of South Florida, after the spill between two and five percent of fish in the Gulf have skin lesions or sores, compared with data from before the spill, when just one-tenth of one percent of fish had any growths or sores.

Meanwhile, the U.S. Food and Drug Administration officially deemed Gulf seafood safe for eating.   Yet the FDA’s findings assume that the average adult eats the equivalent of about three jumbo shrimp per week.  After spending a significant amount of time in New Orleans, I can say with confidence that locals’ diets traditionally rely on Gulf fish, in an amount much greater than three shrimp per week.  Today, however this reliance on local foods is changing.   I understand that many Gulf residents are refusing to eat the fish from their local waterways, choosing instead imported or farm raised fish, or other protein sources altogether.

Despite the repeated safety claims by federal agencies and BP, on April 18, 2012 (two days shy of the second anniversary of the spill) BP sealed an out of court settlement for $7.8 billion, representing thousands of individuals and businesses. Of this sum, the Gulf seafood industry is slated to receive over $2 billion for economic loss.  Needless to say, even this significant monetary compensation is a long way from addressing the true economic costs of the disaster’s damage to the Gulf region’s ecosystem and cultural food traditions.

Raising Elijah describes the domestic routines of family life with young children and how they are linked to public health issues.  The book explores a range of issues, from increased exposure to chemicals like phthalates, which have been linked to asthma, to the toxicity of play structures built from pressure treated wood, which have been shown to leach arsenic.  In the U.S., there are over 80,000 chemicals on the market and little is known about their effects on human health and the environment.  In addition, less is known about the safety of these chemicals in combination with each other.  Steingraber focuses less on pointing fingers and more on a broken system that fails to regulate dangerous chemicals:  “…give me federal regulations that assess chemicals for their ability to alter puberty before they are allowed access to the marketplace…give me chemical reform based on the precautionary principle.” Her commitment to creating regulations that protect consumers can be seen as an example of environmental justice.  Indeed, consumers with less knowledge and/or financial ability to purchase alternatives should not have to unknowingly expose themselves and their children to toxic chemicals.

Alternatives do exist, but are not yet mandatory or mainstream.  Voluntary programs for business such as the EPA’s Design for the Environment  (DfE) can be utilized in concert with the precautionary principal to develop chemicals and mix chemical formulas with less environmental impact.  DfE focuses on chemistry and identifies safer alternatives, while the precautionary principle is a form of risk analysis that aims to ensure a higher level of environmental protection.  Used wisely, programs and guidelines such as these can help break a legacy of toxicity and help to usher in an era of responsible environmental design.

There is increasing demand for safer chemical products and some companies are responding.  We are encouraged to see companies adopt policies that prohibit the use of substances listed as persistent, bioaccumulative, or highly toxic; potential carcinogens; mutagens; or reproductive toxins.   In our world of increasing population and declining ecosystem services, we believe chemical companies that formulate non-toxic substances, facilitate the reduction and reuse of chemicals, and create products that have environmental benefits for the end user will have a competitive advantage.

Emily is a Senior Research Analyst with Portfolio 21 Investments. She has 9 years of experience in the environmental field.