Who’s Financing Climate Change? Banks and the Coal Industry
By Sonia Grant
According to multinational banking corporation JP Morgan Chase’s website, it is committed to “helping the world transition to a low carbon economy”. Despite the flashy “Environment” section on the site, I learned at a panel discussion at COP-17, hosted by BankTrack, Earthlife Africa Johannesburg and urgewald, that JP Morgan Chase heavily finances coal-fired power. And when I say heavily, I mean really heavily. JP Morgan Chase is number one on the list of top twenty banks that are currently financing the coal industry. Together, these banks are responsible for 75% of total investments in coal-fired power. All in all, 93 different banking corporations account for 88% of coal financing, amounting to 232 billion Euros since the singing of the Kyoto Protocol in 2005.
“Coal-fired power is a climate disaster,” said Tristen Taylor of Earthlife Africa Johannesburg. South Africa has a long legacy with regards to coal, he explains. Coal has been mined for 120 years in the country, beginning under the colonial government and continuing during apartheid. Today, 90% of South Africa’s electricity comes from coal, to the detriment of the people. The pollution caused by coal-fired power costs the South African healthcare system $4.9 million per year. For every four tons of coal used to generate power, one ton of coal ash is produced in toxic waste. In South Africa, some communities are displaced and/or poisoned to create space for the disposal of this waste. While large corporations receive a highly subsidized price on electricity, poor households in South Africa spend 20% of their income on electricity, whereas 25% of the population is not connected to the grid at all.
Like JP Morgan Chase, South Africa’s Standard Bank is well versed in the language of green washing, claiming to be carbon neutral. However, Standard Bank invests 99 million Euros annually in the coal industry and makes a hefty profit in doing so: last year alone, it reaped a 60% rate of return on its investment in the world’s dirtiest fossil fuel. Standard Bank is a sponsor of COP-17 and its advertisements are everywhere to be seen around the International Convention Centre (ICC). Unfortunately, corporate influence doesn’t get checked during the UNFCCC’s airport-like security procedures, which require me to empty my pockets, bag, and walk through a body-scanner every time I enter the ICC.
“If all of the coal fired power plants that are already scheduled in the next 25 years come into operation, their lifetime CO2 emissions would be equal to those of all coal burning activities since the beginning of industrialization”, explained Heffa Schuecking of urgewald. Yet the industry is growing, despite increasing recognition of the need to transition to a green economy. In India, one coal plant is approved every two days, whereas in China, two new coal plant developments are completed every week. (Here I could go on about the imperative of just technology transfer, but I will save that for another post.)
In my home province of Nova Scotia, nearly 80% of electricity is generated from coal, most of which comes from Columbia, where mining has been responsible for human rights violations and environmental degradation throughout the country. Our privatized power utility, Nova Scotia Power Incorporated, continues to make a hefty return on investment while electricity rates rise.
I’ve painted a pretty grim scenario. But this doesn’t mean that resistance isn’t possible, that there aren’t alternatives to coal (or to corporate capitalism for that matter – but again, a discussion for another blog post). Schuecking tells of inspiring protests against coal industries. In Germany, for instance, the construction of 16 out of 31 planned new coal plants was cancelled in recent years due to mass protest. Increasingly, social movements are mobilizing not only against the horrendous impacts of coal mining in particular places but also more fundamentally against the expansion of this toxic industry in the face of global climate change.
It’s time to shift the conversation around climate change mitigation: Lets not just reduce our greenhouse gas emissions – let’s work on building resilient, zero-carbon communities. Let’s leave the oil in the soil and the coal in the hole.