24 April 2014

Reactions to UN climate report call to boycott fossil fuel companies

In a statement delivered at Brown University last week, the Costa Rican diplomat warned that it was harmful to argue that one institution divesting from the fossil fuel industry won’t make a difference.

“The thought that removing investment from coal on the part of one small institution is inconsequential and therefore not to be pursued, is analogous to the dangerous sentiment that in the context of a democratic system one vote is irrelevant because it does not constitute the majority,” she Similarly, last week Archbishop Desmond Tutu called for an anti-apartheid-style boycott and disinvestment campaign against the fossil fuel industry for driving global warming, just days ahead of a landmark UN report on how carbon emissions can be slashed.

We live in a world dominated by greed. We have allowed the interests of capital to outweigh the interests of human beings and our Earth. It is clear [the companies] are not simply going to give up; they stand to make too much money.

Tutu, one of the most revered figures of South Africa's anti-apartheid struggle and a key backer of the economic and moral campaigns that helped end the system, says: People of conscience need to break their ties with corporations financing the injustice of climate change. We can, for instance, boycott events, sports teams and media programming sponsored by fossil-fuel energy companies.

The Nobel peace prize winner also called for investors to dump their fossil fuel stocks: It makes no sense to invest in companies that undermine our future. Already some colleges and pension funds have declared that they want their investments congruent with their beliefs.

Both interventions came in reaction to the Intergovernmental Panel on Climate Change, which states that, to avoid dangerous levels of warming, investment in fossil fuels must start falling by tens of billions a year.

The draft says emissions of carbon dioxide and other greenhouse gasses grew nearly twice as fast over the last decade as in the previous 30 years. Emissions grew 2.2% a year on average from 2000-2010, compared to 1.3% a year over the period from 1970-2010. In 2010-2011, global emissions from burning fossil fuels grew 3%.

Fossil fuel firms are also facing escalating pressure from investors, with some large pension funds having already divested. The world's biggest sovereign wealth fund, itself built on oil and gas revenues, is nowformally considering dumping its fossil fuel stocks.

The Norwegian finance ministry, which manages the $850bn fund, said: An expert group will evaluate whether the exclusion of coal and petroleum companies is a more effective strategy for addressing climate issues and promoting future change than the exercise of ownership and exertion of influence.

However, fossil fuel firms still spend huge sums – about $650bn in 2013 – exploring for new oil, gas and coal to add to the stockpile, despite declining profits. Citi bank, HSBC, Deutsche Bank and Goldman Sachs, as well as ratings agencies Standard and Poor's and Moodys, are among the big financial players who have already warned investors of the carbon bubble risk.

BP, Shell and Total are all discussing the carbon bubble risk publicly to some extent but Chevron has refused to do.

We have now called the bluff of the oil companies to indicate what carbon trajectory they are betting on, said James Leaton, research director at the analysts Carbon Tracker, which has pioneered the financial analysis of the carbon bubble.

Now it is up to the investors to act on that. Carbon Tracker research suggests carbon capture and storage – which would clean up fossil fuel burning by burying its emissions – will be able to deal with just 4% of total global reserves.

There is a momentum gathering, Leaton said. Whether it is investors in Australia or Norway, people have seen there is less upside to coal and the amount of capital expenditure going into coal seems to have peaked. We're really pleased that there is now a recognition that doing nothing and hoping it will be all right is not an option.

Excerpts from:

Fitzgerald, Dennis. UN climate chief Christina Figueres wants universities to divest from fossil fuel companies. UN Tribune 22 April 2014. Web.

Carrington, Damian. Desmond Tutu calls for anti-apartheid style boycott of fossil fuel industry. The Guardian 10 April 2014. Web. 22 April 2014