The past few years have witnessed a series of catastrophic weather events – devastating floods, droughts, wildfires, heat waves and frigid winters – that make it clear that extreme weather is the “new normal”. These events come at a huge and rising cost to our global economic system at a time when we are trying to rescue the global economy. Recent reports estimate that climate change is already costing the world more than US$ 1.2 trillion, wiping 1.6% annually from global GDP. Without further action, scientists predict a world that is 4ºC warmer by the end of the century will lead to further devastating impacts, including  extreme heat waves, more intense tropical storms, declining global food stocks and sea level rise, affecting hundreds of millions of people.

Such trends are being noticed. The World Economic Forum’s Global Risks 2013 report identified climate risk as one of the top three global risks feared by corporate, government and NGO leaders. And it is no wonder why. By 2030, the cost of climate change and air pollution combined is expected to rise to 3.2% of global GDP. Companies are seeing dramatic fluctuations in commodity prices and disruption to their supply chains due to extreme weather; consumers are feeling the pinch at the gas pump, grocery store and in their paychecks.

Yet despite this mounting evidence, the climate issue remains a low priority for international policy-makers. Last December’s climate change talks in Qatar barely registered on the global agenda, despite the poignant, tearful speech by a Filipino official testifying that his – and many other developing economies – are feeling the deadly consequences.

The good news is that many climate-friendly solutions, such as solar and wind power, have dramatically increased market share over the past decade and compete with fossil fuels in a number of markets. The International Energy Agency (IEA) reports that a number of formerly fossil-powered countries are rapidly greening their economies: 13 countries generated more than 30% of their electricity from renewable energy in 2011.

We have learned how to make a transformation to a more sustainable way of living. The challenge – given the urgency of climate impacts, particularly in the poorest economies – is scale and speed.

The international climate process is not the only way to achieve dramatic results. A growing number of coalitions between business, governments, and international and civil society organizations are advancing a new partnership agenda, delivering innovation (and finance) in the critically affected regions. The Green Growth Action Alliance was launched at last year’s G20 with over 60 public and private institutions working to unlock private investment in green growth. And long-term investors – a critical group that just needs to set aside a fraction of the trillions of assets under management –are stepping up their efforts through a new Global Investor Coalition on Climate Change. These groups are already driving change through developing proof points of how to attract private investment for clean energy, agriculture and water resource management.

To help speed up these efforts and bring them to scale, the United Nations Climate Change secretariat and the World Economic Forum have joined forces to launch the Momentum for Change: Financing for Climate-friendly Investment. This initiative will showcase successful financial innovations delivering clean energy, adaptation and climate mitigation in developing countries, helping to nurture new funding mechanisms. The call for innovative low-carbon financing activities is now open and includes a set of criteria that activities must meet in order to be recognized. The first round of “lighthouse activities” will be showcased at the United Nations Climate Change Conference in Warsaw this November.

The climate is ripe for changing investment.

Author: Thomas Kerr is the Director for Climate Change and Green Growth Initiatives at the World Economic Forum.

 Image: Sanlucar La Mayor solar park in Seville, Spain REUTERS/Marcelo del Pozo