Banks Seen As Climate Culprits At Global Talks: Report
Country: SOUTH AFRICA
Author: Agnieszka Flak
Major global banks are exacerbating the fight against global warming by supplying power utilities and mining firms with ample funds to build coal-fired plants, according to a report released by non-governmental groups at the climate talks in Durban.
The study examined the portfolios of 93 major banks and found that coal financing supplied by those institutions to the coal industry totaled 232 billion euros ($309.4 billion) since 2005 when the Kyoto Protocol came into force.
"If banks provide money for these projects, they will wreck all attempts to limit global warming to 2 degrees Celsius," said
Heffa Schuecking of environmental think tank urgewald who worked on the report.
The Kyoto pact was set up to reduce greenhouse gases emitted by developed countries by an average of 5.2 percent below 1990 levels during the five-year period up to 2012.
At the same time many countries still invest in coal-fired plants, especially India and China, to supply their growing economies.
Among the top 20 banks listed in the report are institutions from the United States, the United Kingdom, Germany, France, Switzerland, China, Italy and Japan.
JP Morgan Chase, Citibank and Bank of America are the top three banks on the list.
"Between 2005 and 2010, coal financing almost doubled. If we don't take banks to task now, coal financing will continue to grow," said Tristen Taylor from environmental group Earthlife.
A 600 MW power plant costs around $2 billion to build, making it necessary for developers to rely heavily on banks to provide and mobilize the money they need.
The report argued that coal mining was harmful to natural landscapes, communities and water resources while coal-fired power plants are blamed for major emissions and waste.
Each new power plant is likely to add millions of tons of annual emissions of CO2 over the lifetime of these plants of 30-40 years.
Host of the climate talks South Africa is currently building two 4,800 MW coal-fired plants to meet fast-rising demand for power in Africa's biggest economy.
The country has big plans for rolling out renewable energy investments to cut its reliance on coal - now 85 percent of its energy mix - but this is likely to take years to materialize.
Many emerging countries have no option than fossil fuels and coal to power their development. For banks, the investments can be seen as practical projects to help finance growth.
South Africa has vast coal reserves and green energy is more challenging and costly to build on a meaningful scale, which means coal is likely to be part of the country's energy portfolio for some time to come.
State-owned power utility Eskom spews out some 225 million tons of CO2 each year.
The report urged banks to shift their portfolios towards renewable energy and energy efficiency projects and implement CO2 reduction goals for the emissions they help finance.
(Editing by James Jukwey)