Today, Earth Day, the Biden Administration kicked off the first day of the Leaders Summit on Climate, with 40 countries participating. With an impressive list of world leaders present, and President Biden promising great ambition as the United States re-enters the climate arena, we did hear some more substantial commitments and pledges among the usual bluster.
Some announcements made today #LeadersClimateSummit
*US to cut emissions by 50-52% by 2030
*Japan 46% by 2030
*Canada 40-45% by 2030
*Korea to stop financing coal overseas
*China to peak coal use by 2025
To have a livable future we need ambition *now* https://t.co/v2pLRSxoiQ
— 350 dot org (@350) April 22, 2021
Before we get to the more ambitious pieces, the biggest red flag that we noticed is the overall lack of explicit comments about stopping the financing to fossil fuel projects, one of the key areas that can speed up the transition away from fossil fuel energy. It’s one thing to make climate goals, but it’s another thing to keep on funding the flames.
The big news came from President Moon Jae-in when he declared a South Korean moratorium on overseas coal financing. That’s right, one of the largest international coal financiers made an announcement that they would stop public financial support for new overseas coal power plants and ban additional domestic coal power plant permits. Of course, it’s the details that count — like existing financing of coal development will continue — but the implications for global coal financing could be huge. As our friends at Solutions for Our Climate (SFOC) said, “While this is a positive step, we still need Paris-aligned NDC targets and steps to phase out all #fossilfuelfinancing.”
President @moonriver365 declares S. Korean moratorium on overseas coal financing at #LeadersSummitonClimate. While this is a positive step, we still need Paris-aligned NDC targets and steps to phase out all #fossilfuel financing. Access our press release: https://t.co/yTa2PGyLne pic.twitter.com/V4nXfMgX73
— Solutions for Our Climate (기후솔루션) (@forourclimate) April 22, 2021
The Summit quickly pivoted into a session called Investing in Climate Solutions where we heard from more world leaders and the heads of financial institutions.
Ok, first, we’re awash in 2050 net-zero commitments from financial institutions including the banks. Net-zero commitments are typically far-off commitments that are made up of largely unproven technology, the fact is that we know to avert the worst effects of climate change, we need to transition off fossil fuels, fast. The world’s leading banks have channeled $3.8 trillion to coal, oil, and gas companies in the five years since the Paris Agreement was signed, according to the latest edition of the Rainforest Action Network’s annual fossil fuel financing tracker. In fact, despite net-zero pledges, banks used $750 billion to finance fossil fuels just in 2020. This is why many in the climate movement are turning to the financial regulators, like the ECB and the Bank of England, to stop the banks from channeling money into fossil fuel projects, since their commitments are meaningless otherwise.
The Biden Administration announced, during the summit, the U.S. International Climate Finance Plan. Point three in the five-point plan is this: Ending International Official Financing for Carbon-Intensive Fossil Fuel Based Energy. Additionally, in point four, Making Capital Flows Consistent with Low-Emissions, Climate-Resilient Pathways.
It’s encouraging to see climate plans like this, but we’ll be sure to keep the pressure on the Biden administration to ensure the implementation meets the ambition.
After the first day of the Leaders Summit on Climate and seeing some glimmers of hope, I’m left with a resounding feeling that the climate movement has a vital role to play in this political moment, especially with this summit as a key milestone in the lead up to the United Nations Climate Change Conference (COP26) this November in Glasgow.
We need to keep turning up the pressure! World leaders keep offering incremental improvements, but if we truly want to stop the planet from warming we need grand ambitions and on a large scale. One of the pathways to speeding up the transition away from fossil fuels, is focusing on how the industry is financed. We need public momentum. People everywhere can push banks, government regulators, and politicians to stop financing fossil fuel projects. We need to stop letting our money be used to support planet destroying endeavors, and instead radically invest in and build infrastructure for fair, just renewable energy.
Let’s show our leaders that it is beyond popular to end fossil fuel finance at home and abroad – in fact, we demand it. Let’s push them to go further than coal; than international finance only; than net-zero. Join a finance campaign near you, because we need everyone to push us into a fossil-free world.