Last week, Christine Lagarde and the European Central Bank celebrated the momentous fifth anniversary of the Paris Climate Agreement by gifting the world’s biggest polluters a huge coffer of free money.
Well, not literally. But close enough.
Lagarde and her bank will add another 500 bn euro to their pandemic emergency response programme – bringing the total value of the fund to 1.8 trillion euro.
That’s great. European states and workers badly need any support we can get to survive the difficult winter ahead, many of us jobless, in second or third lockdowns, anxious about the future.
The problem is that while trying to solve one crisis, the European Central Bank are making another crisis worse.
Blindly throwing money at big business is going to make shareholders richer, but won’t help European people get the green and just recovery we deserve.
Worse: without any environmental or climate strings attached, billions of euros from the pandemic recovery programme are bound straight for the pockets of fossil fuel executives.
By refusing to adopt climate safeguards, the ECB are de facto agreeing to continue buying bonds from some of the world’s worst, most destructive coal, oil and gas giants.
There’s a saying: if you’re not part of the solution, you’re part of the problem. Christine Lagarde, on the eve of the Paris Agreement’s fifth anniversary, chose the wrong side of history, by choosing polluters over people.
Back in March and April, when the ECB made its first moves in response to the global Covid-19 pandemic, we were all in an emergency response mode – and people like Lagarde might be forgiven for not considering all possible consequences as they did all they could to save the sinking economy.
But since then extensive research by reputable non-profits has shown that the ECB’s pandemic purchasing programme is benefiting dozens of fossil fuel companies to the tune of billions of euros. First time around, it was panic. But nine months later we should be wiser, and know better. A mistake made over and over again isn’t a mistake anymore – it’s negligence.
The ECB pandemic recovery money should be financing public health services, clean energy transition, liveable cities, and resilient communities. And part of it is. But another part is doing something else entirely.
Let’s take just one example. Shell, one of the fossil fuel giants receiving the ECB’s support, is number seven on last year’s list of 20 companies with the highest CO2 footprint in the world. Together these 20 companies are responsible for a third of all climate-destroying greenhouse gas emissions.
Shell has two faces: the one they try to show in Europe is squeaky clean, renewable, innovative, for the people, concerned about the future of the planet. Your friendly neighbourhood petrol station. You have to appreciate the marketing magic – and the ethical acrobatics – performed by their PR department.
Then there’s the other face: that of a ruthless climate criminal, a corporation responsible for drilling and digging for oil and gas in some of the world’s most vulnerable and biodiverse regions. They have been implicated in the deaths of environmental defenders. Their dirty projects are destroying indigenous lands and have been linked to violence and human rights abuses in countries in Africa and Latin America. They spend millions on lobbying against climate action.
This is where the European Central Bank’s Covid-19 recovery money will end up going. Shell, together with Total, Eni and other giant fossil fuel companies will in all likelihood continue to benefit from the pandemic purchasing programme because there are no safeguards to prevent that.
On Thursday, after announcing the 500 billion euro cash injection, Lagarde was asked about climate change. She said it was not her job to regulate and play the role of a government. In the same breath she also claimed to be very concerned about the climate crisis and promised to continue leading the ECB in a process of discussion and exploration.
But time for discussion and exploration is over. It’s been over for at least five years, since the world’s governments signed the Paris Agreement and made a deal to save human civilisation and ensure everyone has a future. Five years later, the undecided middle has shrunk, and there are only two places the ECB can be: on the right or wrong side of history.
By failing to prevent massive streams of public recovery money from funding the very companies responsible for driving the climate crisis, even though they should know better by now, the ECB are making their choice – and it is the wrong choice to make.