An ambitious UK Climate Change plan can reduce 1% of global emissions – but the UK has the power to cut 15% of global emissions, by decarbonising capitalism.

The Committee on Climate Change has proposed a net zero carbon target by 2050 for the UK. This is the minimum we should do – within our own country.

Yet the UK plays a massive part in more than 15% of the world’s greenhouse gases – because the City of London finances the businesses responsible for those emissions. So we could make a more radical impact on climate change – if we chose to decarbonise capitalism here. And we could set a new gold standard for global climate action.

And frankly, it would be grossly hypocritical to ask the British people to change, if we then failed to force our banks and financial institutions to do likewise.

The good news is that across the City, many people get green finance. But it’s still not mainstream. We won’t be able to solve the climate emergency just by adding in a bit of green cash: we need a system change. A diet only works if you eat salad and give up the doughnuts.

Just look at the greenwash by the fossil fuel sector. There are just 100 fossil fuel firms who’ve been responsible for 70% of global emissions since 1988 – and they have allocated on average only 1.3% of their total capital expenditure on green energy. This is utterly reckless and totally out of step with a net zero goal.

To reverse this, Government has to say: London will become a capital of Green Finance, and you will no longer be able to fund the climate crisis here.

This will be hugely challenging. Today 20% of the value of the London Stock Exchange is invested in high carbon and fossil fuel firms. By implication 20% of any pension funds tracking the LSE are too. To protect the incomes of pensioners today and in the future, their savings need new profitable homes.

Yet the great news is clean, high returning investments exist. Tens of trillions of dollars of new green infrastructure is needed globally, over the next 3 decades alone. Investments that are future safe – unlike the $12 trillion currently invested in fossil fuel assets, that is at risk of becoming worthless.

In other words, by decarbonising capitalism, we won’t be just solving the climate emergency, we will be helping pensioners switch out of increasingly risky carbon assets into much safer climate-friendly investments.

Regrettably, the political leadership for this historic reform of capitalism is absent. Bogged down in climate unfriendly Brexit, the Conservatives are just making things worse. And Corbyn’s Labour just wants to destroy capitalism.

Fortunately, there are leaders in the City of London – from Mark Carney at the Bank of England to the Green Finance Institute and an encouragingly large number of financial institutions who get the need to change – and will work with political leaders who are up for it.

With a Coalition of the Willing in Parliament and the City – people who get the urgency, the risks of inaction and the sheer scale of the challenge – we could supercharge the switch into green capitalism and wind down the fossil fuel threat.

The action plan is emerging fast – from total transparency, to requirements to factor in climate risk, from mandatory disclosure of dirty investments to a return to the policy stability Britain briefly enjoyed between 2010 and 2015, when green investments flourished.

We need pension funds to divest from any company whose business plan isn’t consistent with a net zero carbon future, and the goals of the Paris Climate Treaty. From stock exchanges to the debt markets, from insurance firms to the Bank of England’s own balance sheet, they must all decarbonise their investments rapidly.

There will of course be a maze of overly complex regulations to cut through – but it must not detract from this vision to rebuild the City as a global centre for sustainable capitalism, where the needs of the planet and people have to come first.

While there will be huge opposition by vested interests and incumbents, this is a transition many now realise is inevitable and necessary. Both for the environment, but also for our economy. The truth is too many banks, firms and pensions are over-exposed to high carbon investments, and if that carbon bubble bursts before implementing the plan I’m proposing, it will make the financial crash of 2007 look like a picnic. It’s actually an economic emergency, as well as a climate one.

The future will be exciting if we go for this change. Green growth will probably be faster than now – green jobs more than enough to replace jobs lost in fossil fuels. Britain’s global lead in offshore wind built so recently has already brought great jobs to otherwise left behind coastal cities and towns, from Hull to Grimsby and Lowestoft.

Add in the health benefits like clean air, and decarbonising capitalism is a winner for Britain.

You can find out more about the debate I lead on this topic in Westminster last week and the five point plan I outlined to decarbonise capitalism in the FT’s Pensions Expert Magazine here.

And for all our new Lib Dem Local Councillors, you can visit this guide to find out more about the option of divesting your local authority pension scheme. Look out for further information and support coming from Green Lib Dems soon….

* Ed Davey is the MP for Kingston & Surbiton and Leader of the Liberal Democrats