Last December, for the first time in history, the international community agreed to limit global warming to 1.5 degrees Celsius to avoid the most catastrophic effects of climate change. Meeting that crucial goal will require swift, decisive action from every sector of society.
Shorting the Climate, a new report from RAN, BankTrack, Sierra Club and Oil Change International, shows that the world’s biggest banks have been driving the climate crisis by pumping hundreds of billions of dollars into extreme fossil fuel companies. They now have a stark choice to make: lock the world into a path of runaway climate change, or stop funding climate chaos.
In the last three years, banks like JPMorgan Chase, Citigroup, and Deutsche Bank have put hundreds of billions into extreme fossil fuels: coal, tar sands, Arctic and ultra-deepwater oil, and liquified natural gas (LNG). These carbon-intensive, financially risky subsectors are devastating for the climate and our communities. Funding extreme fossil fuels now locks in global warming for decades to come.
Extreme fossil fuels are simply incompatible with a climate-stable world. Tell big banks to stop financing them now!
If governments follow through on the Paris climate agreement and limit warming to 1.5 degrees Celsius, investments in coal infrastructure, LNG export terminals, and extreme oil projects will be largely unprofitable. These investments would only pay off if the international community fails to rein in global warming. So big extreme fossil fuel investments are massive bets that governments won’t stop climate change.
In financial terms, “shorting” is doing a deal in which an investor profits if a company or asset declines in value. In other words, it means betting on failure. After the Paris climate agreement, funding extreme fossil fuels amounts to shorting the climate.
For the world to meet the Paris climate agreement’s goal of limiting global warming to 1.5 degrees Celsius, we have to rapidly decarbonize our energy system, starting now.
In the last year, we’ve seen ten of the biggest US and European banks commit to reduce funding for coal mining, following pressure from global civil society. So major banks are capable of getting out of extreme fossil fuels — if they feel enough heat.
For the climate and our communities,
|Jason Opeña Disterhoft
Climate and Energy Senior Campaigner
Rainforest Action Network