Banks are funding the fossil fuel industry, and profits continue to be harvested at the expense of lives and the planet, writes Nicole King.
Johannesburg – Last year was the hottest on record, it has been confirmed, and we risk runaway climate change, so it’s time for a Global Day of Divestment action.
Load shedding. Coal and oil price volatility. Greenhouse gas emissions. Climate change. Devastating floods in Malawi. New mining licenses under consideration. Your bank is potentially funding them.
On Global Divestment Day, millions of people across the world pulled hard on one of the threads that connects all of these pieces together, drawing the fossil fuel industry and the banks and institutions that fund it into the spotlight.
Friday the 13th might well have been unlucky for those who would prefer that business proceeds as usual and that profits continue being harvested at the expense of people and the planet.
The scientific health check for the Earth is dire. Last year was the hottest year since records began in 1880, with average combined temperatures across sea and land rising to 0.77º Celsius above the 20th century average. Nine of the 10 warmest years have been experienced since 2000. As a result, the frequency and severity of flooding and droughts are increasing and sea levels are beginning to rise.
We are shattering other records too: burning record amounts of coal and oil, investing record amounts of capital in fossil fuels and producing record levels of the greenhouse gas emissions that cause global temperatures to rise. Burning fossil fuels is the number one driver of climate change and globally. At least 80 percent of all known reserves need to stay in the ground if average temperatures are to be kept to a 2º Celsius future rise, a target that is unlikely to be met without radical change.
We have to act now. That is why people of conscience are using their collective power as bank account holders, students and academics, religious leaders and members of faith-based communities to get banks to stop future investments and public institutions to divest from coal and oil. The global divestment movement includes 181 individuals and institutions – representing more than $50 billion (about R583bn) in assets – that have pledged to divest from fossil fuels.
In South Africa, all of the banks fund fossil fuels, so people have been getting behind the Fossil Free Africa campaign to call for their banks to change direction, starting with Nedbank. The “green bank” could become the industry leader by disclosing its investments as a first step toward ultimately committing to stopping funding future fossil fuel projects.
In the fight for climate justice, the human cost of rising temperatures is proving too high. The recent flooding in Malawi and Mozambique claimed hundreds of lives and left thousands more people homeless and facing food shortages and hunger.
At the same time, water scarcity across Africa is increasing, including in South Africa. Northern Kenya is experiencing its worst drought in 60 years. Too often it is those who have done the least to cause climate change who are paying the ultimate price, but everyone of us will soon feel the impact.
In Springs, for generations people have been living with the impacts of mining, first from coal then gold. Communities in Kwa-Thema and other locations now face four new open-cast coal mines, some of which will border residential areas. There is scepticism about the promises of jobs and fear about the health risks associated with polluted water and air.
Then there is the coastline. In November, President Jacob Zuma announced Operation Phakisa, the government’s plan to fast-track economic development through oil and gas exploration off the coast, including a potential 3.5km-deep oil well off KwaZulu-Natal’s coast. ExxonMobil has applied for exploration rights which include plans for seismic tests in the Indian Ocean in the highly volatile Agulhas Current, bringing with it a potential threat to marine life from Richards Bay to the Eastern Cape.
So why, with the risk to people and the environment, do we seem to be falling deeper into this addiction to fossil fuels? The impact of volatile oil prices is changing the energy dynamics globally and some, like climate campaigner Naomi Klein, see this as a once-in-a-generation opportunity to make major global changes to energy policy.
These could include a moratorium on drilling in the Arctic and on countrywide fracking following the example set by countries like Scotland. Prices for a barrel of oil are at 50 percent of their mid-2014 levels, suddenly making extreme energy projects like fracking far less economically viable. Some projects face the potential of becoming risky “stranded assets” for banks and investors.
In South Africa, however, growing domestic demand for energy from coal means that many new coal mines are likely to be unaffected by oil price shocks.
There is also interest in the potential for oil, so new mining licences for coal and exploration licenses for offshore oil drilling are being considered by government.
The country has plenty of low-grade and highly polluting “cheap” coal, one of the key reasons for Eskom building the coal-fired power stations at Medupi and Kusile.
What government, labour and civil society do seem to agree on is that we must undertake a just transition away from fossil fuels to a clean energy future powered in large part by renewable energy
A clean energy future powering a low carbon development path is possible. What is needed is a step change in ambition and political will to scale up the renewable energy revolution.
Nuclear is not an option. A R1 trillion deal could bankrupt the country, the environmental risks are too high and the 10-16-year build time would mean breaching the upper limit of our agreed carbon dioxide targets as emissions grow.
Renewables can deliver thousands of megawatts more quickly than any other option and are the only solution to connect finally the approximately 1.5 million people in rural communities who would otherwise stay off the grid. South Africa is among the top 10 countries globally when it comes to renewable generation capacity, but according to Eskom this accounts for only about 500 megawatts out of a capacity of about 44 000MW. This renewables figure is planned to rise to 3 725MW by 2030, accounting for no more than 8 to 10 percent of total generation capacity.
Back the renewable energy sector and the benefits will multiply. Technology solutions will improve the efficiency and reduce the cost of solar and wind turbine units. Advances in electricity storage will help unlock the biggest win, to extend access to electricity potentially through community-owned local generation facilities that move us away from massive central production and costly grid infrastructure. With scale, job creation will follow.
This kind of just transition will not happen overnight, but with the lights going out, people are no longer prepared to sit and wait for government and businesses to act. For too long, global leaders have failed us by protecting the fossil fuel industry and putting short-term economic and political goals before our long-term survival.
The global fossil fuel industry and the banks financing it can no longer neglect their responsibilities.
In South Africa that goes for Nedbank, Standard Bank and Absa/Barclays, among others who continue to pump billions of rands into projects across the continent.
South Africa stands at a crossroads.
Your bank, pension fund, university, church, mosque, synagogue and temple could be funding the burning of more fossil fuels, the destruction of more land and livelihoods, and an increase in water scarcity because it uses huge amounts of water to dig out, clean and burn coal. Worst of all, we risk perpetuating the environmental crimes that will see people pay with their health yet still have no electricity to show for it just as their parents and grandparents before them.
The alternative is to demand divestment and fight for a vision and ambition that will sustain communities and connect millions more to clean electricity.
That is why, on Global Divestment Day, we will be standing in solidarity with the millions of people fighting the consequences of our changing climate.
Fossil fuels are history, renewables are the near future.
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