Banks, companies turn against coal as leaders seek cash for climate

December 13, 2017 | 09:18
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PARIS: Major banks and companies vowed on Tuesday (Dec 12) to accelerate the move away from Earth-warming fossil fuels as world leaders met in Paris seeking to unlock new cash for the global economy's shift to greener energy.
FILE PHOTO: An oil and gas processing plant fed by local shale wells is pictured along a highway outside Carrizo Springs, about 48 km from the Mexican border, in Dimmit County, Texas, US. ( Photo source: Reuters / David Alire / File Photo )

Two years to the day since 195 nations sealed the Paris Agreement to avert worst-case-scenario climate change, the World Bank said it would stop financing oil and gas exploration and extraction - about two per cent of its portfolio now - from 2019.

​​​​​​​​​​​​​​On the sidelines of a summit of some 60 leaders called by French President Emmanuel Macron, French insurer Axa said it would speed up its carbon sector divestment, pulling €2.5 billion (US$2.9 billion) from companies which derive more than 30 per cent of their revenues from coal.

Dutch bank ING said it would have "close to zero exposure" to coal power generation by 2025, and a group of more than 200 global investors, including banking giant HSBC, launched a campaign to pressurise the world's largest corporate greenhouse gas emitters - including BP, Airbus, Volkswagen, and Glencore - to go greener.

Summit participants, meanwhile, warned that trillions of dollars must be invested in clean energy technology to meet the Paris Agreement's existential goal of limiting global warming to under two degrees Celsius (3.6 degrees Fahrenheit) over pre-industrial levels.

"While the challenge is great, we must do everything in our power to meet it. We know it is the difference between life and death for millions of vulnerable people around the world," said Frank Bainimarama, the prime minister of Fiji who presided over UN climate talks in Bonn last month.

Macron called the summit after US President Donald Trump's announcement in June that he would pull America out of the 2015 Paris pact which had taken nearly 200 nations more than two decades to negotiate.

About 200 protesters gathered in the Paris streets, demanding that France pays "not a single euro more for fossil energy".

Mankind's voracious burning of oil, coal and natural gas is blamed for planet-warming greenhouse gases that have caused the average global temperature to rise by an estimated 1°C to date.

'DON'T WORRY'

On current emissions trends, the world is on course for warming of 3°C, experts warn, with life- and asset-threatening superstorms, sea-level rise, floods and droughts the result.

Trump, who has described climate change as a "hoax", has slashed climate finance - cancelling an outstanding US$2 billion out of US$3 billion Washington had pledged towards the Green Climate Fund.

The US leader came under fire from all quarters on Tuesday.

His rejection of the Paris pact was "politically short-sighted and misguided, economically irresponsible, and scientifically wrong," said former UN secretary general Ban Ki-Moon.

Obama-era Secretary of State John Kerry said it was a "disgrace" that there were no senior American officials at the summit, while California governor Jerry Brown lamented: "We have a climate denier in the White House."

In the absence of climate champion Barack Obama, Trump's predecessor who helped push the Paris pact over the finish line, American businesses, regions and local government leaders have taken up the cudgels, and were represented in Paris by former New York mayor Michael Bloomberg, ex-governor of California Arnold Schwarzenegger, and Microsoft founder Bill Gates.

"It doesn't matter that Donald Trump backed out of the Paris Agreement, because the private sector didn't drop out, the public sector didn't drop out, universities didn't drop out, no one dropped out," said Schwarzenegger, now the face of the R20 network regional climate actors.

"We at the subnational level, we're going to pick up the slack."

But many remain concerned about climate finance for developing countries, of which the US - the world's biggest historical greenhouse gas polluter - has traditionally been a major contributor.

Money is a sore point in the UN climate process, with developing nations demanding aid to ease the costly shift to less-polluting energy sources, and to shore up defences against climate-change induced weather disasters.

Rich nations, who have polluted more for longer, pledged in 2009 to muster US$100 billion per year in climate finance from 2020.

On 2015 trends, total public financing would reach about US$67 billion by that date, according to a report of the Organisation for Economic Cooperation and Development (OECD).

The International Energy Agency estimates that investments of some US$3.5 trillion per year in the energy sector will be needed to 2050 to stay under the 2°C limit - double current spending.

Among the summit participants were current UN chief Antonio Guterres, World Bank President Jim Yong Kim, Mexico's Enrique Pena Nieto, Theresa May of Britain, and Spain's Mariano Rajoy.

Absent were the leaders of major polluters China, India, Brazil, Russia and Canada, Germany's Angela Merkel, and European Commission president Jean-Claude Juncker.

AFP/ Reuters photo

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