(This post was first published October 11, 2019. It is now updated and republished September 9, 2020.)
After decades of ongoing climate talks, in December of 2015, some 195 countries approved the Paris Agreement, the first ever global climate accord .
The call was for an all-hands-on-deck approach—governments at all levels, individuals, private industry, and the big financial institutions—to tackling climate change, the largest threat ever faced by humanity. In the months that followed the signing, the world felt a sense of hope, optimism and relief. We were finally going to do “something” about climate change.
But now, some four years later, the initial enthusiasm has fizzled out and the Paris Agreement is on life support. Governments and world leaders lack the political courage to support the more ambitious climate action needed to match the urgency and scope of the climate crisis. The world continues to subsidize fossil fuel expansion and emissions continue to rise—1.6% in 2017 and 2.7% in 2018. However, less well known is the role of the banking industry in financing the climate breakdown.
Big Banks Financing the Climate Breakdown
Image: Banking on Climate Change 2020 Report
The Banking on Climate Change Report for the first time “adds up lending and underwriting from 33 global banks to the fossil fuel industry as a whole. The findings are stark: these Canadian, Chinese, European, Japanese, and U.S. banks have financed fossil fuels with $2.7 trillion since the Paris Agreement was adopted (2016–2019), with financing on the rise each year.”
The video which follows does an exceptionally clear job of examining investments the banks have made in fossil fuel industry infrastructure since the Paris Accord. It provides a compelling case why you should stop banking with any of the big banks and points out how to divest from your bank. Please watch and say goodbye to your “trusted bank.” It simply doesn’t deserve your trust.
Video Description: We all know the impact that fossil fuels, backed by huge government tax subsidies are having on the climate of our planet. What’s less well publicised, and arguably even disguised by the top banks, are the mind boggling levels of investment that they have also been pouring into Oil, Coal and Gas, even since the Paris Accord of 2015.
Between 2016 and 2019, Canada’s 5 large banks loaned over a third of a trillion dollars to fossil fuel producers. Our major banks are partnering with the fossil fuel industry and continue to be aligned with climate disaster. RBC (Royal Bank), TD (Toronto-Dominion), JPMorgan Chase, Bank of Montreal and CIBC (Imperial Bank of Commerce) are the top 5 bankers of the Tar Sands projects.
In an era of climate emergency, this is morally reprehensible and unconscionable!
Paris Agreement
The stated objective of the Paris Agreement is clear in Article 2.1.a:
Holding the increase in the global average temperature to well below 2 °C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 °C above pre-industrial levels.
The banking industry is out of sync with the Paris Agreement and “with the direction the world needs to take, and the emissions trajectory we need to get there. Banks must align with that trajectory by ending financing for expansion…while committing overall to phase out all financing for fossil fuels on a Paris Agreement-compliant timeline ~ Banking on Climate Change Report. — for discussion
Ottawa
intends to release plans this autumn to reduce the carbon intensity of
liquid fuel by 12% by 2030, including by requiring refiners to blend
cleaner combustibles with fossil fuels under a Clean Fuel Standard,
government and industry officials said.
The
standard aims to reduce greenhouse gas emissions by 30 million tonnes
by 2030, a critical part of Prime Minister Justin Trudeau’s green plan.
Environment Minister Jonathan Wilkinson said it represents a lifeline to
the economy as it struggles to regain momentum after lockdowns.
“This
is actually a huge economic opportunity to diversify the economy and
create a market for clean products,” Wilkinson told Reuters.
We have run out the clock with distracting debates about incremental changes. A new approach is needed.
I have spent the last year and a half writing a book, A Good War: Mobilizing Canada for the Climate Emergency, about Canada’s Second World War experience, searching for lessons for how to confront the climate crisis and quickly transition off fossil fuels.
Our wartime experience carries a helpful — and indeed hopeful — reminder that we have done this before. We mobilized in common cause across society to confront an existential threat. And in doing so, we retooled our entire economy in a few short years.
But to execute a successful battle, we need a plan. Here then are seven key strategic lessons that emerge from our Second World War mobilization.
1. Adopt an emergency mindset
When we approach a crisis by naming the emergency and the need for wartime-scale action, it creates a new sense of shared purpose. It renews unity across Canada’s confederation, and liberates a level of political action that previously seemed impossible.
Economic ideas once deemed off-limits are newly considered. And we become collectively willing to see our governments adopt mandatory policies, replacing voluntary measures that merely incentivize and encourage change with clear timelines and regulatory fiat to drive change.
Metro Vancouver issued an air quality advisory on Sept. 8, 2020, due to the smoke from wildfires burning south of the U.S. border. THE CANADIAN PRESS/Jonathan Hayward
2. Rally the public at every turn
Many assume that at the outbreak of the Second World War everyone understood the threat and was ready to rally. But that was not so.
It took leadership to mobilize the public. In frequency and tone, in words and in action, the climate mobilization needs to look and sound and feel like an emergency.
A successful mobilization requires that people across class, race and gender share a common cause. The public must have confidence that the rich, middle- and modest-income people are all making sacrifices.
Such measures are needed again today. Moreover, a 2019 survey of 2,000 Canadians shows that when ambitious climate action is linked to tackling inequality, support goes dramatically up.
4. Create the economic institutions to get the job done
The Canadian government (under the leadership of cabinet minister C.D. Howe) established 28 Crown corporations to meet the supply and munitions requirements of the war effort. The private sector had a key role to play in that economic transition, but vitally, it was not allowed to determine the allocation of scarce resources. In a time of emergency, we don’t leave such decisions to the market.
C.D. Howe watches a scientist test the curve of a lens. (National Film Board of Canada. Photothèque. Library and Archives Canada), CC BY
Howe’s department undertook detailed economic planning to ensure wartime production was prioritized, conducting a national inventory of wartime supply needs and production capacity and coordinating the supply chains of all core war production inputs (machine tools, rubber, metals, timber, coal, oil and more).
The climate emergency demands a similar approach. We must again conduct an inventory of conversion needs, determining how many heat pumps, solar arrays, wind farms, electric buses, etc., we will need to electrify virtually everything and end our reliance on fossil fuels. And we will need a new generation of Crown corporations to then ensure those items are manufactured and deployed at the requisite scale.
5. Spend what it takes to win
A poster from the Second World War. (Library and Archives Canada, C-091436), CC BY
A benefit of an emergency mentality is that it forces governments out of an austerity mindset and liberates the public purse. This year, in response to the COVID-19 pandemic, Canada’s federal debt-to-GDP ratio will rise to about 50 per cent. At the end of the Second World War, it was 108 per cent.
As mainstream politicians dither on meaningful and coherent climate action, the assertion of Indigenous title and rights is slowing and blocking new fossil fuel projects. Some of Canada’s most inspiring renewable energy projects are also happening under First Nations’ leadership. It is imperative to both honour and support such efforts.
7. Leave no one behind
The Second World War saw over one million Canadians enlist in military service and even more employed in munitions production (far more than are employed in the fossil fuel industry today). After the war, they were all reintegrated into a peacetime economy, including income support to housing to post-secondary training for returning soldiers.
The ambition of these initiatives provides a model for what a just transition can look like today for all workers whose economic and employment security is currently tied to the fossil fuel economy, with a special focus on those provinces and regions most reliant on oil and gas production.
As I read the latest scientific warnings, I’m afraid. I feel deep anxiety about the state of the world we are leaving to our children and beyond. In truth, we don’t know if we will win this fight. But it is worth recalling that those who rallied in the face of fascism 80 years ago likewise didn’t know if they would win.
During the war’s early years, the outcome was far from certain. Yet that generation rallied and surprised themselves by what they could achieve. That’s the spirit we need today.
Every day, Black business owners and entrepreneurs make invaluable contributions to communities across the country, and their success is essential to Canada’s economic recovery and future prosperity.
The COVID-19 pandemic has highlighted and exacerbated existing systemic barriers faced by Black entrepreneurs and small and medium-sized business owners in Canada. While we have made progress in advancing equitable access to support and opportunities, much more needs to be done to better help Black business owners and entrepreneurs, and address anti-Black racism.
The Prime Minister, Justin Trudeau, today announced investments of up to nearly $221 million in partnership with Canadian financial institutions – including up to nearly $93 million from the Government of Canada over the next four years – to launch Canada’s first-ever Black Entrepreneurship Program. This program will help thousands of Black business owners and entrepreneurs across the country recover from this crisis and grow their businesses.
Teck’s Fording River metallurgical coal operation in B.C. Credit: Teck Resources
Canada’s national association for miners, the Mining Association of Canada (MAC), is weighing in on the federal government’s decision to review Teck Resources‘ proposed Castle Mountain metallurgical coal project in British Columbia, saying the additional review is unnecessary as the project is already undergoing a rigorous provincial environmental review process, and accusing the government of making a political decision.
“We are very disheartened by the federal government’s decision on the Castle project given the expansion fell well below the threshold to being subject to the Impact Assessment Act (IAA),” said Pierre Gratton, president and CEO of MAC.
“This decision certainly has the potential to lead to longer timelines at a time of unprecedented global economic uncertainty.”
“It seems clear that this decision was political in nature as there are many projects across the country with equal or more significant impacts that are not subject to the IAA,” he added.
