but Britain’s choosen today to slash subsidizes for carbon reduction

scrap the billion pound support for carbon capture and storage, and exempt the heaviest industries from environmental tariffs.

Binding the deal was already going to be hard to secure in Paris

but the US, wary of anything which would need support from the congress, which remains in denial.

Mentioning global warming in any investment conference

brings out plenty of skeptics in the investment community

who share the view of most of the republican primary contestants

that is that the whole thing is a scam cooked up by left wingers.

Yet even these investors who reject these scientific consensus

should be paying attention to what is going on in the climate.

That is not because of rising sea levels,

although anyone with a very long investment horizon might want to avoid investing in low lying city property.

It's not because of worsening natural disasters or damaged farmlands either,

although those who invest in catastrophe bonds should really be concerned.

The real reason that investors need to pay attention to the climate, simply, is that so many others is beginning to do so.

They're screening at the biggest carbon emitters or pressing for change at companies they hold.

This week, Insurer Allianz said that it was going to sell two hundred and twenty five million euros of shares

and run off 3.9 billion euros of bonds in big coal producers and power generators

as part of a wave of investors imposing environmental filters.

The price of coal, that’s the red line here, adjusted for inflation, has collapsed recently,

something environmentalist have tended to be delighted about,

but the blue line suggests that it should be a little less smug.

Well the prices collapsed thanks to weaker Chinese economy in the opening of new mines,

the production showed by the blue line is only very very slightly down from its recent record highs.

That is of course the amount of coal dug up and burnt which matters to the environment, not the price.

Still, there are a couple of decent reasons

why an investor might reasonably worry about exposure to carbon intensive companies.

First of all, it leaves them exposed to the risk that politicians will finally take serious action,

no matter how unlikely that may seem at the moment.

That is a risk that anyone exposed to high carbon companies is automatically running.

There is some slight recent evidence that companies which cut the amount of carbon emissions

they produced per unit of sales have out performed.

As you can see on this chart from BlackRock, it divides up companies into the quintiles

that is the groups of one fifth each that have done the most and least to improve in terms of carbon. So reducing carbon.

These guys at the top clearly outperformed the wider market over the past couple of years.

But it hasn't has not a lot of evidence this is worked over a longer period,

but of course the companies that are most likely to improve are the worst at the moment.

So this isn’t necessary an argument for buying companies which have already made the effort.

Quite the opposite, maybe you should be buying those which are currently the worst.

Secondly, holding Smokestack industries makes you a target for the green lobby.

Pension funds, insurers and big brands keen to protect their public image.

This second risk is really the most important.

The more institutions that join the divestment campaign,

the more damage will be done to shares and coal miners, oil companies and power generators.

Other investors should be paying attention not because they want to do their bit for the climate,

but because they want to sell before the price falls.

Smart investors shouldn't just try to get out early,

they should also prepare to get back in. Matters that might sound.

If institutional selling drives the price down enough to create a significant carbon risk premium,

it will be a great buying opportunity.

You will be rewarded for holding those big polluters.

Well, after all as British chancellor George Osborne managed to demonstrate today,

when the going gets tough, politicians will usually choose industry over the environment.

So that means staying out of coal miners for the moment,

but being ready to buy back in when prices get really distressed.