B ehavioral economists will tell you that the simple act of placing an electricity consumption meter in plain view can substantially cut a home's energy use. The same goes for real-time miles-per-gallon meters in cars, which change the way we drive.
These findings tell us something about human behavior: When the price of costly activities isn't hidden from us, we're more likely to pursue those activities prudently.
For too long the free market's accounting system has disguised the cost of one of our most destructive activities: emitting pollution that is making the earth warmer. It has done this by making the market price of emitting those pollutants zero.
Last month outside of New York City's Madison Square Garden, a mega-meter of sorts on human-caused climate change was unveiled, the great challenge of our age. The 67-by-32-foot electronic billboard monitors in real-time the cumulative pollution humans are emitting into the earth's atmosphere. Readers can view it on the web at http://know-the-number.com.
This "Carbon Counter" is no gimmick - it's based on cutting-edge climate change science, with actual emissions being updated every tenth of a second by MIT scientists.
Nor is its purpose a gimmick. The out-of-sight, out-of-mind illusion that polluting is free must end and it must end urgently, because the true cost of emitting greenhouse gases is far from zero. Peer-reviewed science brings daily proof of warming global temperatures that are already melting glaciers, raising sea levels, disrupting agricultural patterns and requiring increased emergency spending from more extreme weather such as stronger hurricanes and prolonged heat waves. That's why inaction in curbing this pollution - 800 tons of it are going into the atmosphere every second - will be far more costly than acting now.
But that's where the good news starts: First, we have the capacity to act.
Second, a bill taking action on climate and energy policy is moving through Congress.
The bank is part of a large wave of businesses that understand both the bottom-line risks for companies and the huge investing opportunity this challenge presents. A global transition to a clean energy economy is a tremendous opportunity to create millions of jobs, safeguard our health and hand our children the planet they deserve.
Investors and government have a huge role in tackling this threat.
Investors need certainty and a level global playing field in order to act. They can get both from government through the clear market signal of establishing carbon emission limits - limits that place a price on carbon pollution. That price will bolster energy efficiency programs, renewable energy and other low-polluting technologies. With the price of carbon pollution factored in, clean-energy alternatives to fossil fuels will quite rightly become far more price-competitive.
We shouldn't underestimate the challenge: The scale of investments needed to reduce carbon-dioxide emissions to the level scientists say is needed - a level that will limit temperature increases to 2 degrees Celsius - is quite substantial. The International Energy Agency estimates that $550 billion per year needs to be invested in energy efficiency and clean energy technologies alone over the next two decades to meet that goal. Current global investments on these activities are less than a third of that.
Legislation with strong incentives and clear market signals for renewable energy, energy efficiency and other low-carbon technologies will help catalyze these investments. In America that legislation now takes the form of the American Clean Energy and Security Act sponsored by Congressmen Henry Waxman and Edward Markey. This landmark bill was approved by the House of Representatives and now it faces consideration in the Senate.
Comprehensive legislation will boost America's economy, health and competitive future. Equally important, it will greatly bolster our country's ability to credibly lead the world on climate change. Important international climate talks will take place in Copenhagen in December: Emerging-market giants like India and China, will be unlikely to act unless the world's richest nation and largest cumulative greenhouse gas emitter shows its own strong commitment.
What gets measured gets managed. A huge billboard display in New York City reminds us that we have gone too long without accounting for a major cost of building our prosperity. The time has come for that to change.
Kevin Parker is head of Deutsche Asset Management and a member of Deutsche Bank group's general executive committee. Mindy Lubber is president of the Ceres coalition of investors, environmentalists and public interest groups and director of the Investor Network on Climate Risk.