Big banks keep providing big money to fossil fuel companies but it’s time for the Global North to invest for the future and pay its historic climate debt to the Global South. Diminishing Sagebrush is threatening the USA’s Greater sage-grouse.
Bankers banking on fossil fuels
Fossil fuel companies keep digging up coal, oil and gas and they keep expanding their operations. This is despite the science clearly indicating that we don’t need any more extraction facilities – burning the products of the ones we have already will produce more than enough CO2 to exceed the world’s 1.5oC and 2oC carbon budgets.
But the fossil fuel company directors and executives aren’t the only naughty kids on the block. The bankers who support them are just as culpable. In 2023 the world’s 60 biggest banks committed almost AU$1.1 trillion to fossil fuel companies, bringing the total over the last eight years (since the Paris agreement was signed) to over AU$10 trillion. Approximately half of both the 2023 amount and the eight-year total was provided to companies with expansion plans.
The amounts provided by the twelve biggest funders between 2016 and 2023 are shown in the bar chart above (in US dollars). Six banks are based in the USA and Canada, and three in Japan. JPMorgan Chase has provided the most funds every year since 2016, with Citigroup second in six of the eight years. In fact, the largest funders have also been the most persistent, with ten of the twelve long term biggest funders also present in 2023’s top dozen. Makes it easy for the fossil fuel companies to know whom to approach first for a loan.
The most generous Australian banks since 2016 have been ANZ (48th, having provided AU$38 billion) and Westpac (58th, AU$16 billion).
The banks are clearly of the view that there’s money to be made from financing coal, oil and gas companies’ expansion plans (‘where there’s muck there’s brass’ as they say where I come from) and they are no doubt correct in the short term. But should the world ever get serious about reducing greenhouse gas emissions, loans that mature after 2030, and even more so those that mature after 2050, must be at serious risk of default when the income dries up and the dirty assets are stranded.
Shifting the finance system for a sustainable future
Three actions that could be taken to make the finance sector’s investments more aligned with environmental sustainability, more effective and fairer are 1) increase both public and private finance for the climate (and nature), 2) put a price on GHG emissions and the social and environmental problems they cause, and 3) eliminate subsidies for fossil fuels and land degradation, both of which are incompatible with a sustainable future.
So how is the world going on each of these?
1 climate finance
2 price on emissions
3 eliminate subsidies
Looks like the Nature article’s authors knew what they were talking about and that there’s a lot of work to be done to transform the finance sector into a force for a sustainable future.
Time for the Global North to pay up
Who historically has caused the climate crisis? Who is currently making it worse? Who is suffering most of the consequences? Who is most in need of help and has least capacity to respond? Who has the people, skills, technology and money to lead the response?
The Global North (questions 1, 2 and 5) has a huge financial and moral obligation to the Global South (questions 3 and 4) for causing the climate crisis. It is time for the rich countries to pay their debts by delivering financial and other assistance to developing countries to help them make the transition to a green economy, manage the losses and damages they are already suffering, and prepare for a hotter, more dangerous climate.
Young peoples’ groups, Indigenous peoples’ organisations, Women and Gender groups, Trade Unions, and members of the climate justice movement are joining forces to demand rich countries start paying off the climate debt they owe to the Global South. Enthusiastic debt collectors wanted:
Greater sage-grouse’s disappearing habitat
Not surprisingly, the Greater sage-grouse (above), of which there used to be millions living across eleven states in the western USA, is dependent on the presence of Sagebrush (below) for shelter and food.
But, as a result of cattle grazing, oil drilling, mining, wildfires, invasive grasses and now solar farms, roughly 1.3 million acres of Sagebrush landscape is being lost each year. The result is that the numbers of Greater sage-grouse have fallen by 80% since 1965. And of course, it’s not just the bush and the grouse that are threatened, it’s the whole landscape. The grouse is an ‘umbrella species’, meaning that the bird’s health is an indicator of the health of all the animals and plants in the ecosystem.
To halt the declining bird numbers, the federal Bureau of Land Management (BLM) proposes to designate 35 million acres of BLM land as priority habitat with strict protections, and another 24 million acres with lesser protection. The aim is to avoid the grouse being listed as Endangered.
In a quirky twist, even those locals who couldn’t care less what happens the bush or the grouse have an interest in making the BLM’s plan work because designation of the bird as Endangered would bring more federal oversight and restrictions to their properties and activities. Can’t have that in the land of the free.
What was the business world saying in 1992?
‘We cannot continue in our present methods of using energy, managing forests, farming, protecting plant and animal species, managing urban growth, and producing industrial goods. We certainly cannot continue to reproduce our own species at the present rate. The painful truth is that the present is a relatively comfortable place for those who have reached positions of mainstream political or business leadership. That is the crux of the problem of sustainable development, and perhaps the main reason why there has been great acceptance of it in principle, but less concrete actions to put it into practice: many of those with the powers to effect the necessary changes have the least motivation to alter the status quo that gave them that power.’
Business Council for Sustainable Development, 1992. Changing Course: A Global Business Perspective on Development and the Environment. (quoted here)
So what happened? Why hasn’t business not just led but driven the changes we’ve needed to protect our environment and ourselves over the last 30 years?
The Business Council for Sustainable Development developed into the World Business Council for Sustainable Development in 1995. It now has 230 members, most of which are multinational organisations in the fossil fuel (e.g., Total, Shell, Chevron, even national ones from Saudi Arabia, Malaysia and China), motor vehicle, food and drink, drug, IT, electronics and consulting industries. The vast majority of them are household names. According to the Council’s website:
‘The World Business Council for Sustainable Development brings together transformational organisations to form a global community that shifts the systems they work within towards a better future. Our members push the boundaries of what businesses can achieve by taking action to limit the climate crisis, restore nature and tackle inequality. Our mission is for all people to thrive in a sustainable way for our planet by 2050.’
If only! The only bit that rings true is pushing the boundaries. You can read about it every day in the business pages and court reports.
Don’t build pipelines for fracked NT gas
It’s not only those who dig and drill and those who finance them who are causing climate change. It’s also the associated industries – tanker owners, railroad companies, public relations firms, advertisers and, among many others, those who build and operate the gas pipelines.
APA Group is Australia’s largest gas pipeline operator. They plan to build several pipelines to support widespread fracking for gas in the NT’s enormous Beetaloo Basin, a development that is completely incompatible with the goal of limiting global warming to less than 1.5oC.
One morning last week, supporters of Extinction Rebellion and Market Forces staged a peaceful, though noisy, demonstration outside APA’s offices in Sydney’s CBD calling on APA to abandon its links with the Beetaloo project. This coincided with publication in the Australian Financial Review of a full page open letter signed by 17 environmental organisations calling on APA not to build the pipelines. Not only were we peaceful, we even gave away copies of the AFR.
Last week I directed readers to ecologist Mark Graham’s experiences of terrible police behaviour. To balance the ledger, a couple of police officers kept an eye on us outside the APA offices and they managed to be both professional and friendly without any apparent difficulty.