An end to fossil fuel finance?
By BEL JACOBS
While the oil industry tightens its grip on the White House, the rest of the world is looking in the other direction: towards renewables.
Speaking at the opening of the One Planet Summit in Paris, United Nations Secretary-General António Guterres called on governments, civil society, the private sector and finance partners to take greater action in tackling global climate change.
Speaking alongside French President Emmanuel Macron, the UN chief said: “Renewables are now cheaper than coal-powered energy in dozens of developed and developing countries […] we need to invest in the future, not the past.”
The Summit opened on 12 December, the 2nd anniversary of the historic Paris Agreement, in which the 195 Parties to the UN Framework Convention on Climate Change (UNFCCC) pledged to curb emissions, strengthen resilience and joined to take common climate action.
Donald Trump controversially pulled out of the agreement earlier this year.
His speech comes as Macron, one of the world’s most active leaders on climate change iniatives, made damning assessments of current actions on climate change. “We are losing the battle. We’re not moving quickly enough. We all need to act.”
If money talks, then Mr. Guterres made his point: calling for financing – by its nature forward-looking – to be used for future of people and the planet, as well as for profit. He pointed out that fossil fuels remain heavily subsidised. “[This means] we are investing in our own doom,” he said, before applauding the efforts by individual cities and territories around the world, as well as communities and private businesses, who are already taking substantial action on climate change.
Earlier this year, Norges Bank, the Norwegian central bank Norges Bank, which runs the country’s sovereign wealth fund, told its government earlier this year it should dump its shares in oil and gas companies. At $1tn, the fund is the world’s biggest; the advice, irrespective of climate change, was aimed at reducing the vulnerability of government wealth to permanent drops in oil and gas prices.
“I have heard it said that the stone age did not end because we ran out of stones. We don’t have to wait to run out of coal and oil to end the age of fossil fuels,” continued Guterres. In an unsubtle dig at the American President, he added: “The message is simple: those who fail to bet on a green economy will be living in a grey future.”
The UN chief stressed that it is not funds but trust - between developed and developing countries - that is lacking. Developing nations say the rich are lagging with a commitment dating back to 2009 to provide $100 billion a year by 2020 - from public and private sources alike - to help them switch from fossil fuels to greener energy sources and adapt to the effects of climate change.
“We need to fix it. This means, first and foremost, ensuring that rich countries honour their commitment and provide $100 billion a year through 2020 for developing countries.”
“We need to build trust and reduce risk, make the best use of available resources, and find innovative ways of financing, such as green bonds whose viability and success are already realities,” the Secretary-General said.
At the same time, in a historic announcement, Jim Yong Kim, the President of the World Bank Group, announced that the Group will no longer finance upstream oil and gas after 2019 and that it would be using finance instead for climate change impact mitigation and resilience, investing up to $325 million in the Green Cornerstone Bond Fund, a partnership with the asset management company, Amundi, to create the largest ever green-bond fund dedicated to emerging markets.
“This is a $2 billion initiative aiming to deepen local capital markets, and expand and unlock private funding for climate-related projects. The fund is already subscribed at over $1 billion,” read the announcement.
Campaigners fighting on behalf of developing nations remain sceptical. “Despite the hype, the One Planet summit is delivering little for the world’s people who are the most vulnerable to climate change,” said Brandon Wu, director of policy and campaigns at ActionAid USA. “Rich countries continue to pretend that new schemes for businessmen to increase their profits will be the centre of the solution for the poor.”
Wu’s words illustrates the limits to climate change solutions that are couched in the language of profit and growth. The window for change is closing; acting in global concert is the only solution. The world calls on the richest countries, people and organisations to take the actions that are needed to save us all.