The World Bank has confirmed that it will stop financing upstream oil
and gas projects after 2019 except under exceptional circumstances in
the world's poorest countries.
The global financial institution made the announcement at climate
summit in Paris on Tuesday, which took place roughly two years after the
historic COP21 climate conference in the same city.
At Tuesday's summit, French insurance giant AXA announced that it
will cease insuring the oilsands sector and new coal projects, and will
divest more than US$3.5 billion from oilsands and coal companies. This
includes divestment from energy giants TransCanada, Kinder Morgan and
Enbridge, all of which have Canadian offices and are constructing major
pipelines: Keystone XL, the Trans Mountain expansion and Line 3,
respectively.
The announcements were among highlights of a one-day "One Planet
Summit" attended by about 50 world leaders and 2,000 participants,
including Canada and Quebec environment ministers, environmental
organizations, business officials and public figures such as actor Sean
Penn.
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The goal was to find financial solutions to phase out fossil fuel
subsidies and allocate more money to help developing countries that will
help their transition to low-carbon economies in the fight against
climate change.
“We’re determined to work with all of you to put the right policies
in place, get market forces moving in the right direction, put the money
on the table, and accelerate action,” World Bank president Jim Young
Kim told the closing plenary.
Conference co-organizers, including the Government of France, the
World Bank and the United Nations, called in advance of the summit for
“concrete action” to reignite momentum as the United States remains
absent from the historic Paris Agreement on climate change. Reached in
December 2015, the accord aims to keep global warming below 2
°C this century.
“We are losing the battle,” French President Emmanuel Macron told
participants. “The agreement has become fragile and we’re not going fast
enough.”
Several financially stable countries and multilateral institutions
made important pledges to help developing countries meet their
commitments under the 2009 Copenhagen Accord on climate action.
That
roadmap calls for the world to raise US$100-billion every year to help
such countries meet their emissions goals by 2020. Last year however,
the OECD estimated that only US$43 billion had been pledged, including
$2.65 billion in funding from the Government of Canada by 2021
The absence of the United States remained bittersweet and
disappointing for most participants, including
California Governor Jerry
Brown and former United Nations secretary-general Ban Ki-moon, who
talked about U.S. President Donald Trump’s “irresponsible” decision to
withdraw from the Paris Agreement.
But former
New York mayor and businessman Michael Bloomberg said he thought it had increased momentum.
“There isn't anything Washington can do to stop us, quite the
contrary, I think that President Trump has helped rally people who
understand the problem to join forces and to actually do something
rather than waiting for the federal government to do something,”
Bloomberg said at a press conference.
Bloomberg and several other major economic leaders, including Bank of
England governor Mark Carney, announced 237 companies worth more than
$6.3 trillion had committed to participate in a wide-reaching
Task Force on Climate-Related Financial Disclosures.
The task force aims to gather reliable data about the environmental
metrics of its members, such as the carbon footprint of their
operations.
According to the task force, only 20 per cent of major
companies are currently reporting this kind of data. Bloomberg and his
partners want to change that so CEOS, board members and shareholders can
make informed decisions about their management practices and
investment.
“Nobody would survive a board meeting where they said, 'I don't know
that this risk is going to happen so let's just sit around and do
nothing,'" said Bloomberg.
One of the task force members is AXA, the world’s third largest insurance company.
Canadian Environment Minister Catherine McKenna was among the world
leaders who said private sector involvement in climate financing is
urgent in the race against environmental catastrophe.
“We need to be smarter about this. We have to stop the old school way of
thinking where governments are going to take actions,” she said at a
panel. “We're missing a lot if we don't leverage the private sector.”
Responding to McKenna's comments however, Environmental Defense national
program manager Dale Marshall emphasized that public financing will
always be necessary.
“It's really hard to leverage private sector dollars to do adaptation
work and that's really where governments need to step in with public
money,” Marshall told National Observer.
Pembina Institute federal policy director Erin Flanagan made similar
comments. National transitions to a low-carbon economy should be led by
governments, she explained, and public policy must create a clear and
assertive framework for the private sector, so it understands how it can
support the green transition.
“If industry knows that the government is serious about achieving
emissions neutrality by 2050, they will be less likely to build gas
plants, they will be less likely to build new oil sands operations,” she
told National Observer at the summit. “I think we still have a way to
go at home to make sure that that consensus on the deadline is well
developed.”
Meantime, McKenna unveiled a partnership with the World Bank to support
developing countries’ transition away from traditional coal-fired
electricity and toward clean energy. A press release said the parties
would share best practices "on how to ensure a just transition for
displaced workers and their communities."
The partnership announcement came just as a Canadian and German
environmental organizations released a report listing six Canadian
financial companies among the world's top 100 investors in new coal
plants. Friends of the Earth and Urgenwald looked at the top 100 private
investors putting money down to expand coal-fired electricity —
sometimes in places where there isn't any coal-generated power at the
moment.
Together, Sun Life, Power Corporation, Caisse de depot et placement du
Quebec, Royal Bank of Canada, Manulife Financial and the Canada Pension
Plan Investment Board have pledged $2.9 billion towards building new
coal plants overseas, the report said.
Urgewald tracks coal plants around the world and reports there are 1,600
new plants in development in 62 nations, more than a dozen of which
don't have any coal-fired plants now.
Read more: World Bank won't back oil and gas projects after 2019 | National Observer
