The New Yorker – Katy Lederer

Between 2002 and 2008, I had a day job as a recruiter at a quantitative hedge fund in midtown Manhattan. I was callow and loquacious, and I would wander from office to office at lunch asking the quants if I should buy an apartment. Everyone knew there was some sort of bubble—interest rates on mortgages were artificially low, and the cost of buying relative to renting was historically out of line—but almost no one imagined how bad it would turn out to be. My fear was not so much that, after committing every penny of my savings to the purchase, I might lose a little money on the deal, but that, when the bubble finally burst, I might end up deep underwater on my mortgage and lose everything. “If you ‘lose everything,’ ” I remember one quant telling me, “You will have much bigger things to worry about than making mortgage payments because that will mean the world economy blew up.”

I was put in mind of this period of my life at the end of last month, when I attended the seventh Investor Summit on Climate Risk, co-sponsored by the U.N. Foundation and the nonprofit sustainability group Ceres, on the heels of the historic Paris Climate Summit. Five hundred investors representing twenty-two trillion dollars in assets convened at the U.N.’s iconic East Side headquarters, where they heard from some of the negotiations’ highest-profile players, including Christiana Figueres, the U.N. climate chief; Ségolène Royal, France’s minister of ecology, sustainable development, and energy; and Michael Bloomberg, who currently serves as the U.N. special envoy for climate change and cities. The event was, in essence, the Climate Summit of Money, and the question being posed was how to finance the clean-energy transition that Paris promised—a transition that scientists and economists agree must happen quickly if the world is to avert the worst economic impacts of climate change—within the strictures of fiduciary duty. “The tools that you design, the financial structures that you develop, the blends that you are able to put together,” Figueres said, setting the agenda for the day in her address. “All of that, in the next five years, will decide the quality of certainly the energy and certainly the quality of the global economy for the next thirty-five years, and hence the quality of life for everyone else for hundreds of years.”

Read Katy Lederer’s full article on The New Yorker website here.