A new report in The Guardian reveals that in 2022 alone, banks financed $150 billion in new fossil fuel projects. Last year, the newspaper and its partners identified “carbon bombs” in an academic database, finding that these are the single biggest sources of fossil fuels. Two French non-profits, Good and Éclaircies, as well as European media have now used this data to map out the companies that operate the carbon bombs and the banks that finance them:
The carbon bombs—425 extraction projects that can each pump more than one gigaton of carbon dioxide into the atmosphere—cumulatively hold enough coal, oil and gas to burn through the rapidly dwindling carbon budget four times over. Between 2016 and 2022, banks mainly in the US, China and Europe gave $1.8tn in financing to the companies running them, new research shows. […]
Between 2016 and 2022, the research shows, banks in the US alone were responsible for more than half a trillion dollars of finance to companies planning or operating carbon bombs. The single biggest financier was JPMorgan Chase, providing more than $141bn, followed by Citi, with $119bn, and Bank of America, with $92bn. Wells Fargo was the seventh-biggest financier, with $62bn.
Also in the top 10 were three Chinese banks – ICBC, Bank of China and Industrial Bank (China) – and three European ones – BNP Paribas, HSBC and Barclays.
Since the Paris agreement was signed in 2015, there’s been an aspirational goal of keeping global warming from raising the average temperature of the planet more than 1.5° Celsius (2.7° Fahrenheit) above the pre-industrial age. In 2018, in a special report, the Intergovernmental Panel of Climate Change noted big differences in the impacts from a rise of 1.5° C and a rise of 2.0° C (3.6° F). That extra half-degree would worsen impacts and risks in every domain, from fisheries to floods, droughts to decimated ecosystems. In a 2° C world, some 410 million additional people would be exposed to record heat, millions would have their livelihoods destroyed by higher seas. And that’s just the short list of impacts.
In 2021, the International Energy Agency reported that keeping to 1.5° C means that there can be no more expansion of fossil fuel extraction. A study published last month in Nature—Global fossil fuel reduction pathways under different climate mitigation strategies and ambitions—found that reaching that goal requires that the supply of coal must fall by 99%, oil by 70%, and gas by 84% by 2050. That is most definitely not the trajectory we are on.
A year ago, scientists calculated that the Earth’s carbon budget—the maximum amount of carbon emissions that can be allowed without exceeding the 1.5° C goal—was about 500 gigatons. But this week in a study—Assessing the size and uncertainty of remaining carbon budgets—published at Nature Climate Change, that maximum was recalculated at 250 gigatons. Alone, the identified carbon bomb projects could release more than 1,000 gigatons over their lifetime.
“The budget is so small, and the urgency of meaningful action for limiting warming is so high, [that] the message from [the carbon budget] is dire,” study co-author Joeri Rogelj of Imperial College London told Ajit Niranjan at The Guardian.
Niranjan reports the response of an unnamed JPMorgan Chase spokesperson giving out the murky company line: “We provide financing all across the energy sector: supporting energy security, helping clients accelerate their low-carbon transitions and increasing clean energy financing with a target of $1 trillion for green initiatives by 2030. We are taking pragmatic steps to meet our 2030 emission intensity reduction targets in the six sectors that account for the majority of global emissions, while helping the world meet its energy needs securely and affordably.”
The 13th annual Banking on Climate Chaos published by several environmental groups found that between 2015 when the Paris Agreement was signed and 2022, the world’s 60 largest private banks financed fossil fuels with $4.6 trillion, $742 billion of that in 2021 alone. Those 60 banks funneled $185.5 billion in 2020 into the 100 companies doing the most to expand the fossil fuel sector.
While the banks keep mortgaging our future with private money, on Monday activists from 250 climate groups around the planet published an open letter urging the nations of the Organization for Economic Cooperation and Development (OECD) that endorsed a global pledge at the COP26 climate summit in Scotland two years ago to cut taxpayer subsidies for fossil fuel projects to actually make those pledges reality:
“Ending OECD oil and gas support is critical to limit global heating to 1.5°C. And yet, the OECD export credit agencies (ECAs) currently provide five times as much financing for fossil fuels as for clean energy every year. By putting an end to their fossil fuel financing, governments have an opportunity to free up $41 billion USD per year to support the clean energy transition.”
“This is the moment where OECD countries can turn their words into action,” said Oil Change International (OCI) strategist Nina Pusic. “Will they live up to the pledge most of them made in Glasgow in 2021 to end international public finance for fossil fuels at the OECD? All eyes are on them, the world is watching. Immediate action is necessary to align global financial flows with a habitable climate future, and this November represents a critical opportunity that we can’t afford to miss.”
The potentially good news, according to the Financial Times, is that the United Kingdom, Canada, and European Union will be pushing an end subsidies for foreign gas, oil, and coal projects. This will be discussed at a closed-door OECD meeting in France this month in the run-up to the COP28 climate summit in Dubai.
As Glasgow proved, words are easy, action is hard, especially when duplicitous, disingenuous interests are still running the show, as is obvious from the fact that COP28 will be presided over by the CEO of Abu Dhabi Nation Oil Company. Global Witness found that ADNOC plans to invest more than $100 billion between now and 2030 on oil and gas production. That’s close to sevenfold more than the company’s plans for “low-carbon solutions.”
