The illogical practice of Councils investing in fossil fuel companies must stop now, writes Brighton and Hove Green Party Councillor Louisa Greenbaum
Divestment from fossil fuels is a powerful and important step towards halting climate change and yet in the two years since the Paris Accord, the percentage of funds invested by Local Authorities in fossil fuels has not significantly changed, in contrast with the good progress made in other areas of public life such as universities, faith organisations and cities.
Brighton and Hove is sadly no exception to this trend. The Green Group of Councillors put forward a motion in 2015 calling on the East Sussex Pension Fund (ESPF) to divest, but frustratingly and astonishingly this received no support from our Labour or Conservative colleagues at the time. Fast forward two years, and the Labour group put forward the same motion, which this time passed, but the ESPF, although they paid lip service to considering the climate impact of its investments by commissioning a two-page report, have done precisely nothing.
Why? Well, where there are fossils there are dinosaurs, and there is a certainly a whiff of the stone-age about the six representatives who make up the ESPF Pensions Board.
So, for the sake of the dinosaurs, let’s go over again why divestment is a no-brainer.
Perhaps they need reminding of the impacts of climate change:
- Higher temperatures have already led to an increase in heat-related deaths and illness, rising seas, increased storm intensity
- One-fourth of the Earth’s species could be headed for extinction by 2050 due to changing habitats and competition for resources.
- Sea level rise from climate change could displace tens of millions of people.
- Climate change is making floods, fires and droughts more frequent and severe.
- In 2003 extreme heat waves caused more than 20,000 deaths in Europe and more than 1,500 deaths in India. In addition to heat-related illness, climate change will increase the spread of infectious diseases, mainly because warmer temperatures allow disease-carrying insects, animals and microbes to survive in areas where they were once thwarted by cooler weather.
- Climate change is affecting businesses and economies at home and around the world. If action is not taken to curb global carbon emissions, climate change could cost between 5 and 20 percent of the annual global gross domestic product, according to Nicholas Stern’s government review.
People from all levels and areas of society, from the top to the bottom, are realising that this can’t be allowed to continue. As Pope John Paul said, “Any harm done to the environment is harm done to humanity.” “Human beings,” he said, are “not authorized to abuse the planet, much less to destroy it.” So, what can be done?
One of the fastest moving areas in which climate change is being challenged is the Divest-Invest movement, which now represents a staggering $2.6 trillion shift in investment behaviour all over the world.
When the Rockefeller fund announced a few years ago that it was divesting the 7% of its fund connected fossil fuels, the movement went mainstream. What these groups have all understood is that moving away from fossil fuels not only makes environmental sense, but also financial and ethical sense.
The environmental case is the best rehearsed of the arguments in favour of the divestment from fossil fuels. 80% of the world’s fossil fuel reserves MUST remain unburned if we are to contain the rise in global temperature to 2%. We don’t have a hope in hell of achieving this if we don’t slam on the brakes. We simply don’t have time to change down through the gears and come gently to a stop over the course of a decade. The damage will be done, and we will be on an irreversible path with disastrous and fatal consequences.
We are actively contributing to global warming by investing in fossil fuels and it needs to stop now.
But this isn’t just a green issue – it’s also a financial one. The 80% of ‘unburnable’ fossil fuel reserves run a high risk of becoming a ‘stranded’ or worthless asset and a poor investment.
While climate legislation that limits fossil fuel extraction is a considerable driver for stranding these assets (which is why the fossil fuel industry is lobbying so hard against climate legislation), there are economic and physical as well as regulatory factors.
These include the falling price of oil against the increasing cost of extraction through more extreme environments or extraction techniques and the rise and rise of renewable energy.
Either fossil fuels stay in the ground and banks and commercial organisations lose billions writing off these “stranded assets,” or irreversible climate change will threaten human life as we know it. It’s that simple.
In the words of the Rockefeller heirs: “We are quite convinced that if he (John D Rockefeller) were alive today, as an astute businessman looking out to the future, he would be moving out of fossil fuels and investing in clean, renewable energy.”
It’s what Mark Carney, the Governor of the Bank of England, called ‘the Tragedy of the Horizon’ in his speech to Lloyds of London. His speech examined the impact that climate change would have on financial stability and I quote, “We don’t need an army of actuaries to tell us that the catastrophic impacts of climate change will be felt beyond the traditional horizons of most actors – imposing a cost on future generations that the current generation has no direct incentive to fix.”
Surely, with this huge weight of knowledge behind us, it is the moral duty of anyone in public life, and in positions of authority, to show leadership on this issue of global and historic significance.
Shame on the dinosaurs.