Filthy finance

21 October 2014

ECO is confident that delegates will remember President Obama’s famous address to the world just last month: “The climate is changing faster than our efforts to address it. The alarm bells keep ringing. Our citizens keep marching. We cannot pretend we do not hear them.” Despite this appeal to follow the people, industry choose to follow the money. So far, the money–both public and private–has continued to flow overwhelmingly to fossil fuels, entrenching dirty power, locking-in emissions, and inflating the incipient carbon bubble.

Lubricated by a US$1.9 trillion concoction of subsidies, tax breaks, government incentives and the externalisation of the true costs of dirty energy, the fossil fuel industry spent $674 billion in 2012 on exploration and development. With the current rate, fossil fuel companies are slated to spend over $6 trillion in the next decade on further industry developments. ECO can only encourage governments to stand up to the fossil fuel industry’s efforts to protect their profits. Industry spends half a million dollars a day lobbying in Washington and Brussels to prevent, delay or weaken climate regulation. In the US alone, investment in lobbying activities ($160 million a year) is equivalent to what’s needed for Nepal to adapt to climate change–an amount that remains unfunded.

Governments must stop dancing to the polluter’s tune, and investors must realise that throwing money at fossil fuels is a short-sighted and dangerous game. Instead, ECO expects governments to adopt the “POPI attitude” in Paris (meaning committing to Phasing Out fossil fuel emissions and Phasing In 100% renewable energy) to ensure sustainable energy access for all as early as possible. Since this must be done no later than 2050; there is no room for hesitation. Rich countries must lead the way and end production subsidies in their countries immediately, freeing up finance for domestic mitigation and adaptation, and funding the GCF.

ECO hopes to see plans for such a shift from the outset with the upcoming  INDC submissions. In a similar vein, governments should agree to shift public support from multilateral and national development banks and export credit agencies away from dirty energy and towards renewable energy. Governments must also ensure that fossil fuels are taxed effectively. One option ECO finds intriguing would be a global fossil fuel extraction levy that would not only help reflect the true cost of fossil fuels, but also provide a substantial source of currently untapped finance to support the expansion of renewable energy, adaptation, and financial support for loss and damage.

So, are you ready to join the POPI club?

Filthy finance

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