Issues of finance have long been touted as key to unlocking action on climate change. At it’s most simple, the questions are largely a matter of where we put money; taking it out of particular assets and into others. But in reality, this is a complex issue and can feel quite esoteric to all but the most committed of money-geeks.
Two projects launched this week aim to help make some of the finance questions a bit clearer, at least when it comes to investments in energy. With more clarity, they hope to produce a more robust public debate and stronger global action on fossil fuels.
Coal Banks, launched this week by civil society network Bank Track, aims to show how much money is invested in coal by commercial banks. With this, they hope, to inspire customers around the world to directly lobby their banks to end coal financing.
The work was funded by, amongst others, the Rockefeller Brothers Fund, who gained headlines last month when, just before the New York UN climate talks, they announced they’d divest their charitable funds (itself largely built on oil) from fossil fuels.
Coal Banks, following previous Bank Track reports released at 2013 COP19 in Warsaw and 2011 COP17 in Durban and released on the run up to the latest IPCC report, shows 92 commercial banks channeling more than US $500bn into the coal industry between 2005 and April 2014. Most worryingly, they argue, it’s a trend that is increasing rapidly: 2013 was a record year for coal finance, with commercial banks providing more than US $88bn to the main 65 coal companies, over four times the amount provided in 2005. They stress that public banks like the World Bank have largely stopped financing new coal power projects, and they ask customers to put pressure on private banks to follow suit.
It’s very much a global campaign. You can play with their infographic to look at the data in Euro, Yuan, Yen, Dollar (US and Australian), Pound and Franc. It also includes buttons to email your bank and/ or tell your friends on social media. As the report underpinning this site outlines, anti-coal bank-based protests have been growing globally in recent years. But if the campaigners want to have real traction, they’ll need to go beyond the activists willing to occupy their local HSBC. Bank Track are keen to stress a recent trend of Chinese banks financing coal. Six of the top 20 coal banks between 2011-April 2014 were Chinese banks.
Part of the reason for the campaign is to shine a light on claims from banks that they are getting more sustainable, with quotes from several banks about transitioning to a low carbon economy and being “environmentally friendly.” As Lucie Pinson, private finance campaigner for Les Amis de la Terre/Friends of the Earth France put it: “It’s all well and good to be trumpeting the odd wind and solar investment here and there, as the banks do every year in their sustainability reports. But our new data shows how wedded the majority of the banking sector still is to polluting, climate-changing and outmoded coal – the very stuff that they refuse to publicise.”
On the other side of the coin, the Multilateral Investment Fund also released their latest Climatescope report this week, mapping 55 emerging clean energy markets in Africa, Asia and Latin America and the Caribbean.
Again, China takes headlines, ranking number one, as the largest manufacturer of wind and solar equipment in the world and the largest demand market for said equipment. Brazil is close behind though, and South Africa, Kenya and Uganda are all among the top scorers, with significant clean energy projects and programs. South Africa in particular seems to have surged ahead recently, with nearly $10bn of clean energy investment undertaken in the last two years.
A key aim for this project is to challenge ideas of clean energy as a luxury. As their accompanying report opens: “Developing nations, it was assumed, could afford only fossil generation. This belief guided numerous investment decisions and policies. It has even shaped the dynamics of international climate talks.”
Climatescope stress the role of microfinance in bringing initial capital, but also feel such organisations are just beginning to address these issues. Moreover, no nation scored higher than 2.23 on their ranking, out of a possible 5, and the average score was just 1.1. There is still a long way to go.