As per the general logic of capitalism, the fossil fuel industry doesn’t care much for public opinion.
Shell, BP, ExxonMobil, Gazprom, Total, Chevron. A familiar list? More recently the likes of Donald Trump and Justin Trudeau have joined the ranks of well known climate villains.
This is the first our new fossil free finance series.
These are the companies imposing fossil fuel extraction on - disproportionately poor and Indigenous - communities worldwide and profiting from the root cause of climate crisis, and the politicians that support them. There is, however, another faction within global capitalism equally responsible for accelerating climate breakdown: banks.
Even as climate change campaigners in recent years redirect their blame away from the nebulous “consumer” and towards those who stand to profit from continued climate breakdown, banks have largely been let off the hook.
Fossil fuel divestment
Now, as the fossil fuel industry’s popular reputation is at an all time low, the climate justice movement is turning its ire towards the financial sector and its deep complicity in fossil fuel extraction.
The fossil fuel divestment movement - most successful in UK universities where 68 of 154 have some made a kind of divestment commitment and scaling to momentous victories in New York City, Paris and Ireland - has rightly identified the fossil fuel industry as the primary antagonist in our struggle for climate justice.
The logic goes that if it’s wrong to wreck the climate, its wrong to profit from that wreckage. We need to keep the vast, vast majority of fossil fuel reserves companies like Shell and BP have in the ground to avoid the most devastating impacts of catastrophic climate change.
By successfully campaigning for reputable public institutions like universities, churches, local council pension funds, municipalities and our Governments to sever their links with the fossil fuel industry, the climate movement is rapidly degrading the social license of the industry to continue extracting and profiting from climate crisis.
As per the general logic of capitalism, the fossil fuel industry doesn’t care much for public opinion. Divestment alone doesn’t stop new coal mines from County Durham to Vietnam; new gas infrastructure across Europe; or the expansion of tar sands and oil pipelines across North America. Not when they’re backed politically by domestic governments and the EU. Especially not when they’re backed financially by the world’s largest and most powerful banks.
Divestment is an essential foundation for creating the political space for fossil free finance campaigning to emerge globally.
The global fossil fuel finance regime currently looks like UK banks HSBC and Barclays providing $5.633bn and $3.642bn of finance respectively to “extreme fossil fuels” in 2017 alone, according to BankTrack.
China Construction Bank provided $6.985bn in 2017 while Royal Bank of Canada (RBC) gave $13.011bn. Overall, between 2015 and 2017, 36 banks provided $345.271bn in fossil fuel finance for companies and projects BankTrack analysed.
Of this, $97.551bn went to tar sands (RBC predictably the worst offender due to their geographical proximity), $51.946bn to coal mining and $5.198bn to Arctic oil and - widely considered the most carbon intensive fuels.
Reporting these incomprehensibly large numbers is not to overwhelm, but to make it clear the mammoth importance of cutting off this vital lifeline of the oil, gas and coal industries, if we are to keep fossil fuels in the ground per the aims of divestment.
A popular strategy deployed by the climate movement over the last decade or so has been to target major new key fossil fuel infrastructure projects or expansions when they arise. This mostly looks like mobilising a combination of local communities and wider solidarity into resisting the specific project through direct action, legal challenges, defund campaigns and community organising. Sometimes with success, sometimes without.
Either way, for every Preston New Road, Dakota Access Pipeline, Keystone XL or Hambacher Forest with an interesting story or media-genic front line resistance, there are dozens if not hundreds of new and existing fossil fuel infrastructures quietly happening in regions with little or repressed civil resistance.
Resistances to these projects are a hugely important element of the wider climate justice movement and indescribably important for communities immediately impacted by their imposition. But considering the bigger picture, like divestment, resisting them alone will not roll back the tsunami of fossil fuel infrastructure necessary to transition to a zero-carbon global economy.
A future is in sight where we drive a wedge between global finance and fossil capital to undermine their profiteering off climate breakdown.
Defund campaigns demanding banks stop financing projects like DAPL have been successful such as in the case of Dutch bank ING. Recent months have also seen RBS leading UK banks on excluding coal and tar sands, while French bank BNP Paribas and insurer AXA excluded coal and tar sands at the end of 2017.
All of a sudden, the relationship between our financial institutions and the dirtiest fossil fuels is firmly on banks’ agendas. Our aim must be to sever those ties completely.
Following this brief introduction to fossil fuel finance, I’ll be publishing 10 more articles with The Ecologist, released fortnightly, to elaborate the subject in the depth it deserves.
The series will delve into details of the expansions of various fossil fuel sectors, case studies of specific infrastructure projects and individual banks, propose tangible policy changes, imagine how the ambition of fossil free finance relates to wider political and economy transformations, and - most importantly - cover and draw inspiration from the social movements and campaigns already organising for fossil free finance and climate justice.
Chris Saltmarsh is co-director of climate change campaigns at People & Planet. He tweets at @chris_saltmarsh.