Climate finance pledges ‘missing the point’ on fossil fuels
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Mark Carney (ex-Boy of England governor, now UN special envoy on climate action finance), attends Finance Day opening at the COP26 UN Climate Summit.
DANIEL LEE-OLIVAS | AFP | Getty Images
GLASGOW, Scotland — Flagship pledges at the COP26 climate summit designed to rewire the global financial system for net zero are “resolutely ignoring” the elephant in the room that is fossil fuels, campaigners and climate activists have warned.
On Wednesday, U.N. climate negotiations will host a variety of financial announcements. Financial firms are seeking to align their global assets with the Paris Agreement.
From October 31 through November 12, 2011, the U.K. preside over the main climate event at Glasgow, Scotland. This summit is widely recognized as the greatest achievement of humankind. last and best chance to prevent the worst impacts of global heating
However, the private finance promises on the table were criticized for not preventing financial institutions from investing in fossil fuels or implementing reductions in absolute emissions.
On Wednesday, Rishi Sunak, the U.K. Finance Minister stated to assembled delegates that the long-awaited summit brought together institutions with assets in excess of $130 trillion. According to Rishi Sunak, financial companies controlling 40% of the global assets will align themselves with the Paris Agreement’s 1.5 degree Celsius global warming limit.
Sunak described this as a “historical wall of capital for net zero transition across the globe.” Paris was the first to set an ambitious goal six years ago. Today, Glasgow is providing the capital needed for that achievement.
“Our job is find the right plumbing for it to work.”
Former Bank of England Governor Mark Carney outlined, among other pledges, the U.N.’s Glasgow Financial Alliance to Net Zero (GFANZ) goals.
This global alliance of financial institutions, headed by Carney is aiming to speed up the transition to low-carbon economies.
Petroleum rigs are working on platforms at Gaoyu Lake, Gaoyou, east China’s Jiangsu Province Friday September 17, 2021.
Barcroft Media | Getty Images
Carney spoke out in praise of the increase in net-zero goals money management and the fact that “finance is being a window through the which ambitious climate action may be delivered a sustainable future that people across the globe are demanding.” This had risen from $2 trillion just a few decades ago to $130 Trillion today, he said.
“GFANZ has all of the funding we need to transition. Carney stated that our job was to locate the right plumbing.
Analysis by NGO Reclaim Finance however, stated that the amalgamation of financial institutions signed up to GFANZ “missed the point” regarding fossil fuels. This is because, the analysts said, GFANZ had failed to mandate a halt to investments in fossil fuel expansion — a red line drawn by the International Energy Agency if global heating is to stay under 1.5 degrees Celsius.
Bill McKibben said that an alliance for climate change with no criteria regarding fossil fuels is similar to an anti-smoking coalition that doesn’t address cigarettes. He was also the author of 350.org.
“As long as the financial industry fails to heed the IEA’s appeal to cease support for new coal, oil and gas plants, their claims to be climate leaders should be ridiculed.”
GFANZ released its latest report earlier in the week. announcedThere are a variety of new commitments including processes for removing members where needed and “accelerating fossil fuels phase-out in line with science.”
Reclaim Finance senior analyst Patrick McCully said it was “encouraging” for the group to embrace sanctions and an accelerated phase-out of fossil fuels. “The net zero alliances must now incorporate robust requirements on 1.5°C-aligned fossil fuel phase outs into their criteria for financial institutions. “Until that happens, there will be no definitive answer on GFANZ or its effectiveness,” he said.
Climate crisis is primarily caused by the burning of fossil fuels such as oil, gas and coal. Even though there have been many pledges and net-zero emissions goals made by several countries, the biggest oil, coal, and gas producers failed to detail how they intend to dramatically reduce fossil fuel consumption.
According to the 2015 Paris climate agreement, financial flows should be compatible with climate resilience development and low greenhouse gas emission.
Be focused on the quality and not just quantity of your pledges
Ben Caldecott from the Oxford Sustainable Finance Group said that COP26 witnessed “unprecedented promises” by financial institutions to ensure their portfolios, products, and services are in line with the Paris Agreement.
He said that “part of it entails stopping the financing of new carbon fuel infrastructure.” Paris cannot be achieved if this doesn’t happen as soon as possible. And no amount new green investment can compensate for this.
Caldecott stressed that the focus should be on quality and not quantity of finance commitments made to COP26.
Kenneth Haar, researcher at campaign group Corporate Europe Observatory, saidThe heart of private finance proposals was “self-regulation” by companies with high carbon footprints.
Consequently, it was likely that the proposals of the Net Zero Banking Alliance (taskforce for climate-related financial disclosures), the Investment Association and GFANZ would all fail to make the required reforms.
Haar stated that “sadly, the upcoming COP26 appears set to become one of the largest finance greenwash events in history.”
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