What If We Really Acted as if Climate Change is an Emergency
The world’s scientists warn of massive disruption to the planet in report after report. The leading edge of that disruption is already here. Wildfires in Canada, smoke in NYC, heat domes in Texas, massive heat in the Atlantic ocean are just some of this month’s news.
We provide lots of lip service describing climate change as an emergency or existential threat. According to the Climate Emergency Declaration Organization, 2336 jurisdictions around the world have declared it to be an emergency.
In acute emergencies, such as earthquakes, floods, droughts, wildfires, even pandemics, we often take action to cut red tape, accept some risks to move things more quickly, and find compromises that result quickly. But climate change is different. It is a slower moving and more massive emergency, with acute events. We respond to acute events, but rarely to the underlying causes of those events.
I’ve been thinking quite a bit about what we should/could be doing if we are really responsive in an emergency manner, recognizing that climate change is not the same as a single wildfire or even a large-scale earthquake. So, what if all parties – government, private sector, environmental groups, the public more broadly -actually made difficult choices and compromises, sometimes even involving important principles, in the face of direct consequences.
There are many possible emergency actions. Over the course of a few posts, I want to discuss 6 that could make a significant difference, are doable, but require real sacrifice and hard choices:
- Ending financing of fossil fuel projects
- Accelerating renewable sites on- and offshore
- Fast tracking transmission
- Requiring large-scale carbon capture
- International agreement and focus on methane
- Ending deforestation
Today, I will start with the concept of ending financing of fossil fuel projects. According to the Center for International Environmental Law as of April 2023, the World Bank “has financed and incentivized up to $165 billion in fossil fuel investments since the Paris Agreement was signed [in 2015].” A 2022 Rainforest Action Network report found that “fossil fuel financing from the world’s 60 largest banks has reached USD $4.6 trillion in the six years since the adoption of the Paris Agreement, with $742 billion in fossil fuel financing in 2021 alone.” And, finally, the International Monetary Fund made this astonishing finding about fossil fuel subsidies worldwide: “Globally, fossil fuel subsidies were $5.9 trillion or 6.8 percent of GDP in 2020 and are expected to increase to 7.4 percent of GDP in 2025 as the share of fuel consumption in emerging markets (where price gaps are generally larger) continues to climb.”
To be blunt, in a world at great risk from the burning of fossil fuels, this is bordering on insanity. A logical emergency response would require a halt to all fossil fuel financing by international financial institutions (such as the World Bank) within three years, and a very large climate tax to be paid by any private bank that finances a fossil fuel project. At CLEE, we are evaluating what the International Monetary Fund might do to promote investment in renewable energy and end fossil fuel investments. It deserves a longer discussion, but the short version is that the IMF’s current investments and policy guidance fails to properly evaluate climate risk and enables fossil fuel expansion while also failing to prioritize renewable energy and adaptation. These failures are at direct odds with the IMF’s mission to advance global economic stability and exacerbate rather than ameliorate the emergency.
The biggest US bank investors in fossil fuels? “At the top of that list is JPMorgan Chase, the largest funder of fossil fuels cumulatively since the Paris Agreement on climate change was signed in 2016, according to the report. Citi, Wells Fargo, and Bank of America are also among the top five fossil financiers since 2016, the report found.”
The US and several other countries have committed to end future investments in overseas fossil fuel projects, but that is not nearly enough. A true emergency response would end additional fossil fuel investments entirely by a certain date and provide a roadmap for a thoughtful and fundamental transition away from fossil fuels. Right now, in 2023, that doesn’t exist.
The European response to Russia’s invasion of Ukraine shows the potential of an emergency response. In the very short term, Europe has increased use of dirty fossil fuels (such as lignite in Germany) but has accelerated renewables and reduced reliance on Russian oil and gas.
- An emergency response that ends quickly the financing of fossil fuel projects requires that:
- Governments support and direct development banks/international financial institutions quickly to phase out fossil fuel loans, financing, subsidies, and other support; and to phase out approvals of fossil fuel projects;
- International financial institutions change their practices and risk evaluation;
- Private banks phase out financing for fossil fuel projects;
- Oil and gas companies move rapidly and fund transition away from fossil fuels (or risk going the way of coal companies); and
- Consumers seek and support fossil free alternatives.
The climate change emergency response needs not to be as frantic, at least not until climate change impacts become even more acute.
Next time: site renewables and transmission.