Government subsidies for infrastructure in the oil and gas industry and investment in oil and gas operations by pension funds is counter to moving toward Canada’s obligation to reduce GHG emissions in accord with the Paris targets.
 |
| Divest now |
Bill McKibben notes that the European Investment Bank has met to decide its policy on fossil fuels. When the world’s climate scientists declared last autumn that we would need to have fundamentally transformed our energy sector within a decade, it was clear that the first job was to stop building any new infrastructure.
 |
| Source: https://i.guim.co.uk/img/media/1aea50fcba8e8afce674fc15d4d86ce6d5a8cbd1/0_53_5283_3169/master/5283.jpg?width=620&quality=85&auto=format&fit=max&s=c48655cf220017d3bff15cd7ce1b8295 |
The first rule of holes is, when you’re in one, stop digging. In this case that means no more digging for gas pipelines or ports or anything else that will help lock in carbon emissions for decades to come.
And if the EIB does act, it will send a strong signal to markets and to other lenders. For almost a decade now, observers have understood that restricting the flow of money to the fossil fuel industry is a key part of the climate fight. That’s why endowments and portfolios worth more than $11tn have begun divesting their fossil fuel stocks; last month the University of California system became the latest big player to join in, scrubbing its $80bn endowment and pension fund of fossil fuel stocks. Heck, even a major American utility announced that it was divesting its pension fund because it could see where the future lay.1
In the past week of Guardian reporting we’ve learned that the biggest oil companies plan to increase production as much as 35% in the next decade. It’s going to be hard enough to phase out the vast existing fossil fuel infrastructure in the years ahead: adding new projects at this point is insane.
The European Investment Bank has agreed to phase out its multibillion-euro financing for fossil fuels within the next two years to become the world’s first ‘“climate bank”. The bank will end its financing of oil, gas, and coal projects after 2021, a policy that will make the EU’s lending arm the first multilateral lender to rule out financing for projects that contribute to the climate crisis.
The decision to stem the flow of capital into fossil fuel projects has been welcomed by green groups as an important step towards the EU’s aim to be carbon-neutral by 2050.
The EIB, the world’s largest multilateral financial institution, described its decision as a “quantum leap” in ambition. “Climate is the top issue on the political agenda of our time,” said the bank’s president, Werner Hoyer. “We will stop financing fossil fuels and launch the most ambitious climate investment strategy of any public financial institution anywhere.”
The bank’s vice-president, Andrew McDowell, said the move was “an important first step – not the last step, but probably one of the most difficult.”
Under its new policy, the bank will end all lending to fossil fuels within two years and align all funding decisions with the Paris climate accord. Energy projects applying for EIB funding will have to show they can produce one kilowatt hour of energy while emitting less than 250 grammes of carbon dioxide.2
Laura Kane of CBC News writes that The Trans Mountain pipeline received $320 million in subsidies from the Canadian and Alberta governments in the first half of 2019,
 |
| Source: https://i.cbc.ca/1.5206171.1572992816!/cumulusImage/httpImage/image.jpg_gen/derivatives/original_780/trans-mountain-pipeline.jpg |
according to a new report by an economic institute that analyzes environmental issues.
The money included $135.8 million in direct subsidies and $183.8 million in indirect subsidies that were not clearly disclosed to taxpayers, says the report by the Institute for Energy Economics and Financial Analysis.
"This is a very large subsidy. It really does require more public discussion and public disclosure," said Tom Sanzillo, the group's director of finance.
Sanzillo and the report's co-author, institute financial analyst Kathy Hipple, analyzed the second-quarter report of the Canada Development Investment Corp., a Crown corporation that counts Trans Mountain Corp. among its subsidiaries.3
James Rowe, Steph Glanzmann, Jessica Dempsey, and Zoë Yunker of the Canadian Centre for Policy Alternatives report that The Canada Pension Plan Investment Board (CPPIB) manages one of the country’s largest pools of investment capital at over $400 billion. How pension funds choose to invest has significant bearing on how we collectively address the climate emergency and the needed energy transition away from fossil fuels.
This report asks if the CPPIB is investing with the 1.5-degree Celsius limit on global average temperature rise as outlined in the Paris Agreement and finds it is not.
The CPPIB has chosen to invest millions in companies with a long history of policy obstructionism…
The preceding analysis demonstrates that the CPPIB’s investments are not congruent with the1.5-degree limit. Moreover, the CPPIB has chosen to invest millions in companies with a longhistory of policy obstructionism. For example, the CPPIB has over $1.9 billion invested in fossil fuel companies that belong to the Canadian Association of Petroleum Producers (CAPP).27 CAPP haa long record of lobbying against, and seeking to neutralize the effectiveness of, needed climate policy.28 For example, CAPP has pushed to neutralize national carbon taxation by requesting that its members get back all of the revenue they pay in taxes.29 This lobbying appears to have been successful since approximately 80 per cent of the oil and gas sector’s emissions are exempted from Canada’s national carbon price, thereby greatly reducing the plan’s effectiveness.30 CAPP also actively funds and manages Canada’s Energy Citizens, a group marketed as a “grassroots” pro–oil and gas citizen initiative. Under the Energy Citizens banner, CAPP recently launched a massive advertising campaign supporting the Trans Mountain pipeline expansion and encouraging policy-makers to “use the appropriate legislative, legal and financial steps to ensure the Trans Mountain Expansion project gets built.”31 Concerns have been raised that CAPP’s campaign targeted swing ridings in Ontario’s recent provincial election and was meant to tilt the balance toward Doug Ford’s Progressive Conservative Party, which opposes carbon pricing.32 Finally, in January 2019, CAPP released a platform meant to influence the Alberta provincial elections, which were held in April. The platform called for the rate of Alberta’s oil supply for export to double in growth...4
The authors of this report say this is a moral and ecological failure and also a financial risk. As energy generation shifts away from fossil fuels, investors who do not respond may find themselves left with “stranded assets”—investments that are no longer profitable—and Canada Pension Plan recipients would be collectively affected. Worse still, is that their pension investments would continue to contribute to climate change rather than supporting measures committed to finding solutions. Divestment is a strategy to reduce financial support to GHG emitters and slow down the warming of the planet.
References
No comments:
Post a Comment