There is no doubt that are climate is changing. Global temperatures are rising, sea ice and glaciers are shrinking, oceans are getting hotter and the sea levels are beginning to rise faster and faster. Without urgent change the impacts of the climate emergency will only get worse and leave more of the planet uninhabitable.
Countries have committed to taking action. After Biden re-signed the Paris Agreement, almost every country on the planet has committed to taking action on the climate emergency and reducing their greenhouse gas emissions to levels much more sustainable levels. However, committing to acting and doing so are two very different things. Many of the commitments made in the Paris Agreement won’t achieve limiting temperature rise to 2℃, let alone the 1.5℃ goal.
Now, don’t get me wrong, moving away from fossil fuels that helped create the industrial revolution and have shaped the world we live in today isn’t going to be a quick and easy fix. It would be great is if it was, but given how we as a global society, have become so reliant on it, we can’t just click our fingers and transform the way we all live to be cleaner and more sustainable. There is still plenty we can do though, including following the money.
Fossil Fuel Subsidies
The subsidising of fossil fuel projects is a problem all over the world. Back in 2016, G7 countries were spending $100billion annually in taxpayer money on support for the production and consumption of fossil fuels. Even in the years following the signing of the Paris Agreement very little has been done by many of the richest countries to reduce the amount of money spent on subsidising the fossil fuel industry, with France and Canada spending more than before Paris.
China, a country still extremely reliant on coal for its electricity generation is spending billions of US$ each year on coal, both domestically and abroad. An estimated $9.3billion is spent abroad on coal power plants and $7.6billion within China through state-owned enterprises. The huge number of coal power stations on the east coast of the country are a huge cause of the deadly air pollution that often shrouds many of its major cities.The production and exporting of fossil fuels is a huge sector in the Russian economy, so it’s no surprise to know that they are spending almost as much as the G7 on fossil fuel subsidies – the average in recent years was just over $80billion.
As I wrote last week, Biden’s executive order halting the construction of the Keystone XL pipeline was a huge issue for the Premier of Alberta in Canada who invested a huge amount of taxpayer money into the pipeline, all because banks refused to loan the money and there was very little private investment into the project. This is the current risk of investment in fossil fuel projects in a world that is looking increasingly towards cleaner energy sources – assets become stranded and investments often lead to a loss. This will only become more common as the price of fossil fuel production increases whilst the cost of renewable energy becomes cheaper and cheaper.
There is some good news from here in the UK, however. An announcement at the end of 2020 by the UK government committed the UK to ending direct support for fossil fuels overseas. This means that public taxpayer money will no longer be used for the financing of, aid funding, or trade promotion of fossil fuels. The official government statement does clarify and say that this won’t be the case for ‘very limited exceptions’ but has no detail on what would qualify as an exception. It also doesn’t mean the UK government won’t invest in fossil fuel projects here in the UK – made clear by the recent decision to go ahead with the first new deep coal mine in almost three decades.
Divesting from Fossil Fuels
It isn’t just taxpayer money through the government that’s being invested in fossil fuels. Projects often rely on the investment from other businesses or banks in the form of loans in order for them to go ahead. Unfortunately, especially in the case of larger banks, funding fossil fuel projects is still relatively common and likely means your money is tied up in fossil fuel projects. Here in the UK, the worst banks are Barclays, HSBC, RBS/Natwest, Lloyds and Santander, all with very low ethical scoring. This continued investment is in spite of the falling price of electricity from renewable energy sources and the growing risk of stranded assets in those projects that end up becoming too costly to deliver on what was promised before construction.
Banks are coming under increasing pressure to divest from fossil fuels and other related projects. Movements to divest away from the fossil fuels have grown pace in much of the developed world and were a large part of school climate strikes around the world and the extinction rebellion protests here in the UK.
We Need an Urgent Path Change
The move by the UK to stop investing public money in fossil fuel projects is a positive one, but as we’ve seen this week it isn’t a sign that the UK government is ready to move away from fossil fuels towards a renewable energy future. Billions and billions of dollars are still being spent propping an industry that is waining and will very soon be overtaken by the supply of renewable energy. Even as the cost of renewable energy reduces further and further, so many in the government and those in high positions in banks are intent on funding the fossil fuels, regardless of its impact on the environment and climate change.
The climate emergency isn’t new. Scientists have known about changes to the climate and the impact of burning fossil fuels for decades – even scientists hired by the fossil fuel industry confirmed this back in the 1970s. Each year the evidence of the impact we’re having as a species increases, natural disaster after natural disaster, animal extinction after animal extinction, but the status quo continues.