A Devil’s Bargain on the Climate
A Devil’s Bargain on the Climate
Will the Green Climate Fund—the UN body tasked with funding the transition to a clean-energy, climate-resilient future in the developing world—invest in fossil fuels?

Two years ago, environmentalist Bill McKibben caused a stir when he revealed the “terrifying new math” of climate change. McKibben calculated that to have a reasonable chance of staying below what climate scientists call the “tipping point” of global warming — a temperature rise of more than 2 degrees Celsius over pre-industrial levels — humans can only send 565 more gigatons of carbon dioxide (CO2) pollution into the atmosphere.

Here’s the catch: The oil, coal, and gas reserves that fossil fuel companies and petro-states already have on their books account for about 2,795 gigatons of CO2. If they dig up — and we burn — those reserves, we’ll release five times more carbon than the atmosphere can handle. Hello, climate disaster.

That means that between 60 and 80 percent of known fossil fuel reserves are “unburnable” if the world is to have a chance of avoiding the tipping point. That’s why students, religious leaders, philanthropists, and everyday folks with retirement savings are doing the math and demanding that their investment dollars not prop up an industry that threatens life on earth as we know it.

These voices are joining community activists, Indigenous Peoples, and workers in the Global South — many of whom are on the front lines of climate chaos — who are calling on international institutions not to bank on fossil fuels to drive their economic development. It’s alarming, then, that a new UN Green Climate Fund that is being set up to help transition economies away from fossil fuels may itself support fossil fuel projects.

There’s no future — financially or ecologically — in development projects that warm the planet and destabilize the environment. If the UN wants to help developing countries make the leap to renewable energy, it should take a lesson from divestment activists all over the world and keep its checkbook closed to dirty energy projects.

A Bad Bet

For some, divestment will seem like leaving money on the table. Leaving those fuels in the ground, after all, makes for a lot of “stranded assets.”

The UK-based Carbon Tracker Initiative calculates that these unexploited reserves are worth about $4 trillion in share value and support $1.27 trillion in corporate debt. If you’re the financial officer of a university endowment or a pension fund manager, you might protest that your job is to raise money — and fossil investments still generally outperform renewable energy.

But in the long term, dirty energy investments won’t be so sure a bet. As more and more countries feel the impacts of climate change, serious efforts to curb carbon pollution could make those investments less appealing. Leaders of some of the most important international development and climate institutions recognize this and recently took the stage at the World Economic Forum to bring together the ecological and economic sides of the divestment case.

UN climate convention chief Christiana Figueres said investors would be “in blatant breach of their fiduciary duty” if they failed to pull their money out of fossil fuel-linked funds in the face of “clear scientific evidence” of global warming. And Dr. Jim Kim, president of the World Bank, called on long-term investors to “rethink what fiduciary responsibility means” in the face of climate change and to address the financial risk associated with their carbon-intensive investments.

Climate Fund for the 21st Century

Ironic, then, that the new UN Green Climate Fund could, perversely, become a major source of funding for fossil fuel infrastructure.

The mandate of the fund is to support a transformational shift in the global south away from fossil fuels and toward clean, climate-resilient development. But tucked away in the fine print of the fund’s governing document is support for technologies like carbon capture and storage (aka “clean coal”) — a technology that is not viable at scale and does nothing to address the cradle-to-grave environmental and social devastation that coal wreaks.

In fact, any mention of phasing out fossil fuels is conspicuously absent in the new climate fund, even as other international financial institutions are finally moving to wind down some of the coal-fired excesses of their energy portfolios.

There is, however, a window of opportunity to remedy this as the Green Climate Fund board members work toward final design elements at their meeting this week in Bali. One of those elements could be an exclusion list of dirty energy projects it simply won’t finance. Another is to agree on a framework of indicators of success (in board-speak, the “results management framework”) and strict performance standards that rule out dirty energy.

Most importantly, the board must adopt strong environmental and social safeguards for the projects it supports. In addition to avoiding fossil fuel projects, that might also mean refusing to promote projects like large hydroelectric dams that can cause large-scale displacement of people and loss of land and livelihoods.

An Uphill Battle

The task of keeping dirty energy out of the Green Climate Fund will not be easy.

Several board members have vested economic interests in maintaining the financial viability of “less dirty” energy approaches like “clean coal” and natural gas. And large transnational corporations, including Bank of America (dubbed “the coal bank” by activists), play a significant role in shaping the fund.

Scientists are telling us that we must get off fossil fuels fast. We’re already witnessing the devastating impacts of climate change on our neighbors and friends across the world. And for many national governments, funds to deal with the climate crisis are scarce.

The opportunity is clear. And common sense, not head-in-the-sand economic interests, must dictate action. The Green Climate Fund should take a lesson from ordinary investors all over the world who see that there’s no future in fossil fuels — not for their portfolios, and not for the planet.

Janet Redman is the director of the Climate Policy Program at the Institute for Policy Studies. Oscar Reyes, an associate fellow at the Institute for Policy Studies, helped launch climatemarkets.org.

Published in foreign policy in focus under creative commons license. Read the original

*Image of smoke stacks via Shutterstock

Views expressed in this article are the opinions of the author(s) and do not necessarily reflect the views of Epoch Times.

  • neoLiberal

    Sure, let’s ignore the root cause: human population growth. Want to save the planet? Start culling humans.

    • LTE2

      “Want to save the planet? Start culling humans.”
      I wonder how much CO2’s we can eliminate if these types of cleverly worded scare articles were no longer published?

      • positively49thstreet

        ‘Don’t pretend to be blind to the smog’: China warned of air pollution time bomb that could kill millions

        Millions will die unless action is taken against toxic smog, says respiratory specialist as country suffers FIVEFOLD rise in lung cancer in 30 years


        • LTE2

          “Millions will die unless action is taken against toxic smog, says respiratory specialist as country suffers FIVEFOLD rise in lung cancer in 30 years”
          I am well aware of China’s pollution problem and they do have a problem, more so in Beijing where mountains prevent the smog from being blown away from the city.
          The issue at hand is a woman writing scary stories to scare women. If the science was a sure thing, the word “consensus” would not be used. It’s CYA term.

        • neoLiberal

          Yes, millions will die. That’s one way to undertake a controversial cull. If I were the governments of the world, I wouldn’t be rushing to do anything that will save millions of lives until we come up with a sustainable population management plan.

  • LTE2

    Out of all the world is going to end articles I have read, this is one of them.

  • mememine

    You remaining “believers” are the ones ignorant of science no thanks to news editors never quoting what the consensus actually is.

    You remaining “believers” eagerly condemn your own kids at the mere grunt of a consensus headline with such sickening childish glee that you don’t even bother to learn what the consensus actually is. It was a consensus of “maybe” and never “will be” like the scientists say comet hits and smoking causing cancer is and how evolution is “proven”. YOU tell kids to “believe” the science but science NEVER agreed beyond; “could be” so stop lying to your own children like a neocon. Did Bush goose step billions of innocent children to the greenhouse gas ovens of an exaggerated crisis?

    And stop embarrassing yourselves and get up to date;

    *Occupywallstreet now does not even mention CO2 in its list of demands because of the bank-funded and corporate run carbon trading stock markets ruled by politicians.
    *Canada killed Y2Kyoto with a freely elected climate change denying prime minister and nobody cared, especially the millions of scientists warning us of unstoppable warming (a comet hit).

    • Cougar90210

      You think you could condense all of that into a single, coherent sentence or two, so those of us who don’t occupy your mind (i.e., everyone in the world other than you) could understand exactly what you’re trying to say here?

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