Trump’s FEMA Fumbles its Mission as US Banks Fund Climate Change

March 28th, 2018 - by admin

Democratic Climate Action / Democratic Governors Association & Rainforest Action Network – 2018-03-28 22:30:50

Trump’s FEMA Fumbles its Mission
Democratic Climate Action / Democratic Governors Association

(March 29, 2018) – According to Mother Jones magazine, “FEMA’s Plan for Dealing With Natural Disasters Is Missing the Two Most Important Words.” Can you guess what those two words are?

Climate Change.

The Federal Emergency Management Agency’s (FEMA) newest four-year strategic plan to prepare for natural weather disasters completely omits any mention of climate change, global warming, or rising sea levels and temperatures.

In this case, ignorance is far from bliss. 2017 was the costliest hurricane season in US history. If FEMA can’t properly recognize the causes of these threats, how can we ever expect our government to prevent and respond to them?

Trump’s agency can try to remove “climate change” from its written strategy, but that won’t erase the reality that climate change is an extremely dangerous threat to our country.

We’ve seen the horrible effects of weather disasters firsthand: We’ve lost friends, family and neighbors; we’ve lost businesses, homes and communities. And we’ll lose even more if we aren’t ready for ever-worsening catastrophic weather.

The Trump White House and Cabinet care more about their political crusade against science than our country’s safety. FEMA is simply not preparing for the reality of climate change and the weather it will bring.

If we don’t stand up to the Trump administration now, our generation and future generations will suffer the blow of its reckless environmental policy.

ACTION: Tell FEMA: Take climate change seriously. Sign on to tell FEMA not to ignore climate change?

Chase Bank Is Funding MORE Dirty Energy?
Send a Message!

Rainforest Action Network

(March 29, 2018) — The numbers are in, and they are infuriating.

In spite of deadly impacts to communities and climate, big banks actually increased their financing to extreme fossil fuels last year. And they are hoping you won’t notice.

See the findings from our new report, and let the banks know that we won’t let them get away with this.
View the banks “grades” here.

Each year, RAN and our partners grade the world’s big banks, and calculate how much money they are funneling to extreme fossil fuels — some of the most climate-intensive and destructive energy sources, which must be phased out quickly. Many of the dirtiest, riskiest projects wouldn’t happen without billions in bank funding.

In 2017, some banks, especially in France and the Netherlands, started to wake up to reality, and made policy improvements. But unfortunately, overall financing for extreme fossil fuels still went up. It’s simple. Without funding, these projects would never happen.

Here are just some of the findings of the new report, titled Banking on Climate Change: Fossil Fuel Finance Report Card 2018:
* JPMorgan Chase (ChaseBank) was already the biggest financier of extreme fossil fuels on Wall Street, but now the bank has doubled down, increasing that amount by over $4 billion last year. Chase is making a quick profit instead of supporting communities and the planet.

* All of the Canadian banks increased their shameful financing, sending more money to destructive tar sands oil extraction and pipelines. Together, they more than doubled their financing.

* While some have announced exciting oil and gas policies, most European banks are heading in the wrong direction on coal. Combined, their financing to the deadly, climate-polluting coal sector was $2 billion higher than the previous year.

With news like this, it’s time to step up the pressure. I hope you’ll join us in sending a clear message to JPMorgan Chase and its friends that we will not stand for funding the past.

Alison Kirsch, Climate and Energy Program and Research Coordinator
Rainforest Action Network
425 Bush St, Suite 300, San Francisco, CA 94108, United States

Banking on Climate Change: 2018 Report
Rainforest Action Network

Executive Summary
This ninth annual fossil fuel finance report card grades banks on their policy commitments regarding extreme fossil fuel financing and calculates their financing for these fuels from 2015 to 2017. The report also assesses the shortcomings of the Equator Principles for ensuring banks respect human rights, and Indigenous rights in particular.

The report assesses 36 private banks from Australia, Canada, China, Europe, Japan, and the United States, with policies from additional banks in these countries and Singapore included for comparison. As in previous editions of the report card, extreme fossil fuels refer to extreme oil (tar sands, Arctic, and ultra-deepwater oil), liquefied natural gas (LNG) export, coal mining, and coal power.

The report card calculates how much banks have financed the top 30 companies in each of these subsectors (in addition to six tar sands pipeline companies) over the past three years. Lending and underwriting amounts are weighted based on the fossil fuel company’s activities in a given subsector.

It is environmentally, reputationally, and often financially risky for banks to back these fossil fuel projects and companies. More and more, the public is tying the impacts of fossil fuels
to the nancial institutions backing the sector.

The authoring organizations of this report — BankTrack, Honor the Earth, Indigenous Environmental Network, Oil Change International, Rainforest Action Network, and the Sierra Club — demand that banks end financing for extreme fossil fuels, and all expansion of the fossil fuel industry, while ensuring that their financing does not contribute to human rights abuses.

Financing for extreme fossil fuels overall went from $126
billion in 2015, to $104 billion in 2016, then up to $115 billion
in 2017. 2016, the rst year after the adoption of the Paris Climate Agreement, was a year of progress. 2017 was a year of backsliding.

* The single biggest driver of the overall increase in extreme fossil fuel financing came from the tar sands sector, where financing grew by 111 percent from 2016 to 2017. Tar sands financing totaled $98 billion and was led by RBC, TD, and JPMorgan Chase.

* Banks nanced Arctic oil with $5 billion from 2015 to 2017, led by BNP Paribas, Deutsche Bank, and CIBC. Financing was cut nearly in half over the three years.

* Financing for ultra-deepwater oil totaled $52 billion, led by JPMorgan Chase, HSBC, and Bank of America.

* Banks financed $45 billion for LNG activities of companies involved with enormous LNG export terminals in North America, though the financing is on a hopeful downward trend. Morgan Stanley, Societe Generale, and MUFG are the top bankers of this false solution to the climate crisis.

* After dropping post-Paris Agreement, coal-mining financing has leveled o globally. But outside of China, coal-mining financing more than doubled over the past year. Of the $52 billion poured into coal mining over the past three years, China Construction Bank and JBank of China are at the top of the league table, with Goldman Sachs and Deutsche Bank as the biggest Western bankers of coal mining.

* Globally, coal-power financing has stagnated over the past three years, though it remains one of the more highly funded sectors at $94 billion from 2015 to 2017. ICBC, China Construction Bank, and the other Chinese banks are the biggest backers of coal power, followed by MUFG and JPMorgan Chase.

The policy assessment shows that no bank has yet truly aligned its business plan with the Paris Climate Agreement, whose temperature goals require banks to cease financing expansion of the fossil fuel sector. Banks also must end their support for extreme fossil fuels.

French bank BNP Paribas has the best grades on average, with restrictions for not just coal financing, but for some parts of oil and gas as well. The lack of comprehensive policies from all banks on extreme fossil fuels means that last year’s increase in financing could continue and even accelerate in the years to come.

Introduction: The Beginning of the End
2017 may go down in history as the year when it first became clear that the fossil fuel era was finally starting to sputter to an end. The cost of new solar and wind power started to fall below the price of new coal and gas plants in a growing number of regions.

The CEO of NextEra Energy, one of the largest electricity producers in the US, now predicts that “early in the next decade” — just a few years from now — power will be cheaper from unsubsidized new wind and solar plants in the US than from existing coal and nuclear plants. It’s still far from game over for the fossil fuel industry, but the game has drastically changed.

In the “old days” of early 2017, the argument could still legitimately be made that yes, intermittent renewables are getting cheaper, but they are still intermittent — solar output crashes when the clouds roll in, and wind turbines are just sleek sculptures on a calm day. Long-term energy storage and large-scale battery storage were touted as the missing link.

But the commissioning of a 100-megawatt grid-connected battery in South Australia in late November 2017, only 100 days after it started construction, was a stunning illustration that large-scale battery storage is now economically and technically feasible.

On the transportation front, China, India, the United Kingdom, France, and California all announced e orts to accelerate the adoption of electric cars and phase out internal combustion engines. These e orts have led analysts to bring forward their projections for the date when global oil consumption peaks and then starts its permanent decline.

In July 2017, Goldman Sachs forecast that global oil demand could peak as early as 2025. While oil company scenarios are unsurprisingly still mostly in denial about the likely speed of the energy transition, even ExxonMobil admitted in early 2018 that the Paris Agreement meant that oil consumption could easily drop by 20 percent between 2016 and 2040 — and might even be cut in half.

Tightening the Financial Screws
While these technical and economic developments are hugely significant for the demand side of the clean transition equation, developments in 2017 that will constrain financing for dirty energy supply were equally game-changing. Most fossil fuel companies don’t have the billions in cash it takes to reach, produce, and transport fossil fuels without the support of big banks. Banks are central actors in how this transition will play out.

In June, Dutch bank ING clarified an existing tar sands policy by ruling out project finance for tar sands production and transport, explicitly excluding pipelines such as Keystone XL. Later in the year the bank announced it would phase out lending to any utility with more than 5 percent of its power coming from coal. In October, French bank BNP Paribas made an even more ambitious commitment to move away from extreme oil and gas financing.

Two months later at the One Planet Summit in Paris, the trickle of financial institutions restricting their finance for fossil fuels grew into a fast-flowing stream. The World Bank announced it would no longer finance oil and gas extraction after 2019.

French insurance giant AXA landed a huge blow to the fossil fuel industry with a commitment to cease insuring tar sands production and pipelines and new coalmines and power plants. AXA will also divest nearly $4.5 billion from tar sands and coal companies. At the same summit, other major French banks announced further restrictions on their support for tar sands.

The progress made in Paris rapidly crossed the oceans. Before the end of 2017 the governor of New York promised to cease state pension funds’ investments in entities “with significant fossil-fuel activities.”

Then, in January 2018, Mayor Bill de Blasio held a press conference in a community center that had been flooded by Hurricane Sandy, and announced that New York City pension funds’ existing partial divestment from coal would be extended with a target to divest their $5 billion in holdings in a range of fossil fuel companies.

In February 2018, the University of Edinburgh announced that its endowment — the third biggest educational endowment in the UK — would dump its stock in oil and gas companies. The endowment had already divested from coal and tar sands — as have the other two biggest university endowments, for Oxford and Cambridge.

The University of Edinburgh has not been the only investor to withdraw from the worst of the fossil fuels and then, under continued activist pressure, and presumably because they realize that getting out of fossils has not caused them any significant financial harm, withdraw from the whole fossil fuel sector.

Stuck in the Tar Sands
However, all this positive technological and financial sector news over the past year is not reflected in the top-line numbers on bank funding in this report card. On the contrary, the $115 billion in bank support for the largest extreme fossil fuel companies in 2017 is 11 percent higher than in 2016.

But a closer look at the data reveals that this uptick is entirely due to a whopping 111 percent increase in bank lending and underwriting to tar sands extraction and pipeline companies and projects in the past year. Strip out the tar sands numbers, and bank support for the extreme fossil sectors continued its rapid decline, dropping 17 percent over the past year to $68 billion.

Banks did not suddenly decide in 2017 that tar sands oil is a great long-term prospect. Rather, the increase in funding was in large part to finance the purchase by pure-play Canadian tar sands companies of the tar sands reserves of the oil majors. Companies including Shell, ConocoPhillips and Statoil off-loaded more than $23 billion in Canadian assets in 2017, in order to focus on lower cost reserves elsewhere.

Another factor driving up the tar sands numbers for the biggest global banks in 2017 was $3 billion for Kinder Morgan toward the cost of the highly disputed Trans Mountain pipeline from Alberta to the British Columbia coast.

The massive hike in bank support for tar sands in 2017 — to nearly $47 billion — led this sector to overtake coal power, the best funded of the extreme fossil sectors in 2016. Overall support for coal power has stayed just about stagnant in the last three years. And yet, though the Chinese banks are the biggest funders of coal power, the data show an increase in non-Chinese coal finance over the past three years.

This continued support comes despite numerous banks adopting policies that limit their coal project financing, because these policies fall short of restricting coal power financing in what are increasingly its most common geographies (developing countries) and forms (general corporate finance).

Coal mining saw a small increase in bank support in 2017 (up 5 percent). However this came after a sharp 38% drop between 2015 and 2016. This drop is presumably because many banks adopted policies restricting support for coal mining around the time of the Paris climate conference.

In 2017, two thirds of all support for coal mining came from the four big Chinese banks — and yet it is the Western banks whose coal mining financing trend shows a dangerous resurgence upward.

Bank support for liquefied natural gas (LNG) terminals in North America has fallen 62 percent since 2015 — far more than for any other sector over the last two years. The fracking boom over the past decade led to a rush of dollars being spent on LNG facilities to export surplus natural gas from the United States.

However, other countries, especially Australia and Qatar, also spent big on LNG facilities, so the LNG capital investment boom has been followed by a bust as the world now has surplus LNG production facilities.

Whether this is a permanent bust or a temporary setback will be seen in the coming years, as the fate of the more than 50 proposed North American LNG export terminals is determined and global banks decide whether or not to support these stranded assets in the making.

“When,” Not “If ”
The Paris Climate Agreement, for which many global banks have declared their support, sets an ambition of keeping global warming to “well below 2 degrees Celsius above pre-industrial levels,” with the aim of limiting warming to 1.5 degrees Celsius.

The U.N. Intergovernmental Panel on Climate Change (IPCC) will publish a report in September 2018 summarizing the implications of the Paris Agreement’s more ambitious goal.

A leaked draft of the report is, to say the least, sobering. The world has already warmed by a degree, and another half degree means much more disruption, including “fundamental changes in ocean chemistry” from which it may take many millennia to recover, as well as floods, droughts, deadly heat waves, food shortages, migration, and conflicts.

Two degrees will of course be much worse. Moreover, the IPCC’s draft report stresses that keeping below two degrees is a gargantuan task, even with “rapid and deep” reductions in greenhouse gas emissions.

The game-changing developments in the energy sector in 2017 affirm that the question is not if, but when the fossil fuel sector goes into terminal decline. But the date of the “when” has existential consequences for people, societies and ultimately much of life on earth.

While 2017 saw much encouraging progress on clean energy, it also saw a terrifying escalation of hurricanes, res, and floods. These offer stark evidence of just how much is at stake and just how ethically unacceptable it is for banks to keep funding the fossil fuel industry’s expansion.

Posted in accordance with Title 17, Section 107, US Code, for noncommercial, educational purposes.