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UN Chief Urges Banks to Halt Fossil Fuel Infrastructure Financing

Banks should finance low-carbon climate-resilient projects, not big fossil fuel infrastructure that is not even cost-effective anymore, UN Secretary-General António Guterres’ said during a climate meeting this week.

While praising the major economies that have committed to net-zero emission targets, Guterres’ stressed that under current commitments, the world is still headed to “a disastrous temperature rise of 2.4 degrees by the end of the century.”

“We can no longer afford big fossil fuel infrastructure anywhere. Such investments simply deepen our predicament. They are not even cost-effective,” Guterres’ said in his speech at the 2021 Petersberg Climate Dialogue on Thursday.

Fossil fuels have already become more expensive than renewable energy projects, the UN Secretary-General said.

“So we need the shareholders of multilateral development banks and development financial institutions to work with the management of these banks on funding a low-carbon, climate-resilient development that is aligned with the 1.5-degree goal,” Guterres’ noted.

He also called for putting a price on carbon. 

“We stand indeed at the edge of the abyss. But if we work together, we can avert the worst impacts of climate disruption, and use the recovery from the COVID-19 pandemic to steer us on a cleaner, greener path,” Guterres’ said.

Meanwhile, Australia’s bank Macquarie said on Friday it had reduced its limited remaining equity and lending exposures to the coal sector, and all exposure to coal is expected to run off by 2024, in the latest pledge from a bank to stop financing certain fossil fuels.

Deutsche Bank said last year it was ending financing for new oil and gas projects in the oil sands and the Arctic region effective immediately.

In the United States, Goldman Sachs said in December 2019 that it would decline to finance new Arctic oil exploration and production and new thermal coal mine development or strip mining. Wells Fargo and JPMorgan have also said they would stop financing new oil and gas projects in the Arctic.  

By Tsvetana Paraskova for Oilprice.com

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  • Rick Stauts on May 09 2021 said:
    The world will need fossil fuels for the near and immediate term to provide for daily needs. To stop financing the production of things we need is foolish on the part of banks. Promotion of such an action by leaders such as Guterres is short sighted. If he thinks not, ask him to pledge living one week without any oil based products.
  • Lyle Stevick on May 08 2021 said:
    When the official scientists of the UN, who are over committed to their anti oil agenda, look us in the face and say, oh no, our population went up because of Western medicine, and they show you the life expectancy and infant mortality data to prove their point. And when they claim the triple digit crop yield increase had nothing to do with the triple digit population increase, the oil industry needs to stand it's ground and speak truth to power.
  • Lyle Stevick on May 08 2021 said:
    For big oil to go on the offensive, it must do three things. First give up all denial, not exaggeration, just denial. Second absolutely defend the fact that carbon is good. It has played a majority role in the triple digit crop yield increases humanity has experienced, and by extension, half our population. Third, use oil to cool the planet, and fight like mad against any woke fool who tells you not to. If Mexico covered ten percent of the gulf of California with a black bottomed green house, and used it to evaporate sea water and send it up balloon towers to create clouds, it could claim a climate credit larger than it's current GDP, and it could cool the planet. If California did the same off it's coast, it could end the drought, cool the planet, and put a Sierra snow pack in place that would be worth more than it's GDP. Why are oil companies surrendering?
  • Mamdouh Salameh on May 07 2021 said:
    UN Secretary-General Antonio Guterres should realize that as long as the global economy continues to run on oil and gas, the global oil industry will always find financing for its oil and gas projects.

    If, hypothetically, financing isn’t forthcoming, then the world will face in a few years a destructive oil and energy crisis that could lead to a collapse of the global economy, huge unemployment and long queues of people waiting for charity kitchen food. The people would then be worrying about where the next meal will be coming from and not about a temperature rise of 2.0-2.4 degrees which may and may not happen by the end of the century.

    With due respect to the Secretary-General, he must be ill-informed to claim that fossil fuel infrastructure anywhere isn’t even cost-effective and that fossil fuels have already become more expensive than renewable energy projects. The global oil industry is the most efficient and most profitable industry in the world. It has always been at the cutting edge of technology.

    I would respectfully suggest to the Secretary-General that rather than urge banks to halt fossil fuel infrastructure financing, he should instead applaud the global oil and gas industry for its huge investments in renewable energy and its sterling efforts of cutting emissions in their operations.

    Oil and gas will continue to drive the global economy throughout the 21st century and probably far beyond. Nothing can change this reality.

    Dr Mamdouh G Salameh
    International Oil Economist
    Visiting Professor of Energy Economics at ESCP Europe Business School, London

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