Wednesday

26th Sep 2018

EU apathetic on fossil fuel divestment

  • A divestment protest in Oxfordshire in February 2015. The EU, however, barely has the issue on its radar (Photo: Kamyar Adl)

The total value of pledges to remove investments from the fossil fuel industry has increased 50 fold in the past year, but supporters of this so-called "divestment movement" are having difficulty putting the topic on the agenda in Brussels.

According to a report published on Tuesday (22 September), the combined promises to divest from fossil fuel add up to $2.6 trillion, or around €2.3 trillion.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 18 year's of archives. 30 days free trial.

... or join as a group

Norway's €791 billion pension fund, Sweden's Nordea Bank, and Oxford City Council are among those having announced commitments.

There are two main reasons those pledging have divested from fossil fuels (and often reinvested that money in renewable energy projects).

The first is a moral or ethical argument, which appeals to citizens and organisations that do not want to be a part of, say, a pension fund or university which invests in the fossil fuel industry.

The greenhouse gas emissions from fossil fuels have contributed to climate change, and increasingly people are thinking about their financial carbon footprint.

The second argument is purely economic, as became evident at the International Divestment Conference in Paris, earlier this month, organised by the European Greens, in particular German MEP Reinhard Bütikofer.

Olivier Rousseau of the French pensions reserve fund noted that, although change at his fund would not happen "overnight", climate change has become a factor.

"We have identified carbon as a risk for us institutional investors", he told the audience.

Carbon bubble

The reasoning behind this involves the concept of the "carbon bubble".

Climate scientists have determined that if we are to limit global warming to no more than 2 degrees Celsius – a threshold above which irreversible changes to the planet are likely – there will be a limit to the amount of fossil fuels that can be burnt.

Politicians have adopted the 2-degree limit, and have come out this year with statements referring to a phase-out of fossil fuels. In an historic announcement last Summer, the G7 said the world should be decarbonised by 2100. Last Friday (18 September) EU environment ministers also embraced that long-term target.

That may mean that unless the fossil fuel industry finds a way to prevent greenhouse gas emissions, their industry will cease to exist. At the very least, large parts of the oil, gas, and coal companies' reserves would be unburnable, and hence valueless.

Calculations by HSBC and McKinsey showed that somewhere between 30 to 60 percent of the share value of fossil fuel companies could be lost.

At the Paris conference, former French development minister Pascal Canfin noted that credit rating agency Standard & Poors has started to assess climate risk exposure when they rate companies and countries.

Canfin, who was an MEP for the Greens until 2012, recalled that four years ago his group had tried in vain to include a mandatory climate assessment in new EU rules for credit rating agencies.

"It illustrates the huge shifts in the cultural battle we are in", he noted. "In four years what the politicians left and right were not able or brave enough to impose, on a voluntary basis the financial industry is starting to move on," he said.

Not (yet?) on the agenda

However, the issues of carbon bubble and divestment have not yet found their way to the top of the political agenda in Brussels.

An informal group of MEPs from five different political groups has been trying over the past months to put the issue on the agenda for a plenary debate in Strasbourg. The group includes Bütikofer, Dutch Liberal Gerben-Jan Gerbrandy, German centre-left Jo Leinen, and centre-right Sirpa Pietikainen.

They have so far been unsuccessful.

To list a topic for the Strasbourg plenary, MEPs have to convince their group leaders, who discuss the agenda in a forum called the Conference of Presidents.

Although the agenda is decided on consensus, the political power of the groups behind the presidents plays a large role.

Until now, there has not yet been a majority in the Conference, a parliamentary source told this website. And the contact was becoming increasingly sceptical, noting that the schedule has become tighter due to the refugee crisis.

"Before the summer we had to fill some gaps. With the UN sustainable development goals, and the climate summit in Paris coming up, it will be difficult to make the case for another climate debate which is not about a legislative proposal", the source noted.

The European Commission is not in the driving seat either.

In a written answer to questions from the parliament, investment commissioner Jyrki Katainen noted that there are no plans to divest from the fossil fuel industry, or to set up any guidelines for its agencies.

"Please note that the term 'fossil fuel industry' is not a precise concept which makes it difficult to develop a clear attribution of issuers into this category. Consequently, the Commission has no statistics concerning the investments in assets issued by the fossil fuel industry, and cannot produce such information [about how much EU funds are invested in the fossil fuel industry]", Katainen wrote.

EU agrees common position for climate summit

Environment ministers agreed to demand a 50% cut in carbon emissions by 2050 and a review mechanism in case of an agreement at the upcoming climate conference in Paris.

Visual Data

Every major city in Europe is getting warmer

An exclusive analysis of over 100 million meteorological data points shows that every major city in Europe is warmer in the 21s​t​ century than it was in the 20t​h​. Northern regions, Andalusia and southern Romania are most affected.

News in Brief

  1. UN chief: World suffering from 'trust deficit disorder'
  2. Stalemate in Sweden as parliament ousts prime minister
  3. Migrant rescue ship heading to French port
  4. EU angry at British tabloids on Brexit
  5. UK to allow EU flights in no-deal Brexit
  6. Greek reporters arrested after story on 'mishandled' EU funds
  7. Austrian minister urges police to out foreign sex offenders
  8. ECB's Draghi set to clarify role in secretive G30 group

Opinion

No chance of meeting EU renewable goals if infrastructure neglected

Following the 2030 renewable target of 32 percent, chair of the European Parliament's environment committee Adina Valean argues in order to reach our climate and energy goals, we need both public and private investment over the next decade and beyond.

Stakeholders' Highlights

  1. NORDIC COUNCIL OF MINISTERSThe vital bioeconomy. New issue of “Sustainable Growth the Nordic Way” out now
  2. NORDIC COUNCIL OF MINISTERSThe Nordic gender effect goes international
  3. NORDIC COUNCIL OF MINISTERSPaula Lehtomaki from Finland elected as the Council's first female Secretary General
  4. NORDIC COUNCIL OF MINISTERSNordic design sets the stage at COP24, running a competition for sustainable chairs.
  5. Counter BalanceIn Kenya, a motorway funded by the European Investment Bank runs over roadside dwellers
  6. ACCACompany Law Package: Making the Best of Digital and Cross Border Mobility,
  7. IPHRCivil Society Worried About Shortcomings in EU-Kyrgyzstan Human Rights Dialogue
  8. UNESDAThe European Soft Drinks Industry Supports over 1.7 Million Jobs
  9. Mission of China to the EUJointly Building Belt and Road Initiative Leads to a Better Future for All
  10. IPHRCivil society asks PACE to appoint Rapporteur to probe issue of political prisoners in Azerbaijan
  11. ACCASocial Mobility – How Can We Increase Opportunities Through Training and Education?
  12. Nordic Council of MinistersEnergy Solutions for a Greener Tomorrow

Latest News

  1. EU court delivers transparency blow on MEP expenses
  2. Russian with Malta passport in money-laundering probe
  3. Cyprus: Russia's EU weak link?
  4. Missing signature gaffe for Azerbaijan gas pipeline
  5. Every major city in Europe is getting warmer
  6. No chance of meeting EU renewable goals if infrastructure neglected
  7. Brexit and MEPs expenses in the spotlight This WEEK
  8. Wake-up call on European Day Against Islamophobia

Stakeholders' Highlights

  1. UNICEFWhat Kind of Europe Do Children Want? Unicef & Eurochild Launch Survey on the Europe Kids Want
  2. Nordic Council of MinistersNordic Countries Take a Stand for Climate-Smart Energy Solutions
  3. Mission of China to the EUChina: Work Together for a Better Globalisation
  4. Nordic Council of MinistersNordics Could Be First Carbon-Negative Region in World
  5. European Federation of Allergy and AirwaysLife Is Possible for Patients with Severe Asthma
  6. PKEE - Polish Energy AssociationCommon-Sense Approach Needed for EU Energy Reform
  7. Nordic Council of MinistersNordic Region to Lead in Developing and Rolling Out 5G Network
  8. Mission of China to the EUChina-EU Economic and Trade Relations Enjoy a Bright Future
  9. ACCAEmpowering Businesses to Engage with Sustainable Finance and the SDGs
  10. Nordic Council of MinistersCooperation in Nordic Electricity Market Considered World Class Model
  11. FIFAGreen Stadiums at the 2018 Fifa World Cup
  12. Mission of China to the EUChina and EU Work Together to Promote Sustainable Development

Join EUobserver

Support quality EU news

Join us