Officials about to attend the G7 meeting in Toronto later this week expect to get an earful from environmentalists. What they don’t expect is to get blasted by 288 major institutional investors — including Allianz Global Investors, Aviva Investors, DWS, HSBC Global Asset Management, Nomura Asset Management, Australian Super, HESTA, and some several U.S. pension funds including CalPERS — which are calling on leaders of the US, Canada, France, the UK, Japan, Germany, and Italy to eliminate coal-fired generating stations within their borders and ramp up actions designed to cut carbon emissions more aggressively.
A Letter To G7 Leaders
“The global shift to clean energy is under way, but much more needs to be done by governments,” the group of 288 companies wrote in a letter to the G7 leaders. In total, the companies manage assets worth $26 trillion. The letter calls on governments to “phase out thermal coal power worldwide by set deadlines,” to phase out fossil fuel subsidies, and to “put a meaningful price on carbon,” according to Reuters. It also urges the G7 nations to strengthen national plans for cutting greenhouse gas emissions by 2020 and to ensure they improve climate-related financial reporting.
Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change (IIGC), says it is the first time such a broad group of investors has called for a phaseout of thermal coal used in power generation. “There is a lot more momentum in the investor community” to put pressure on governments, she tells Reuters.
While many countries talk the talk when it comes to addressing the goals of the Paris climate agreements, most are not walking the walk. Most are beholden to wealthy fossil fuel companies that have enough money to buy influence at the highest levels. They think going green will hurt their economies and cause significant job losses. Not so, say the signatories to the letter. Instead, they “will see significant economic benefits and attract increased investment” if they heed the advice they have been given.
Fossil Fuel Subsidies Continue Unabated
Fossil fuel subsidies are the subject of a recent study led by Overseas Development Institute in the UK and co-authored by Oil Change International, the International Institute for Sustainable Development, and the Natural Resources Defense Council. It finds the world’s major industrial democracies spend at least $100 billion each year to prop up oil, gas, and coal consumption, according to the Thompson Reuters Foundation.
The members of the G7 pledged in 2016 to eliminate fossil fuel subsidies by 2025, but the report finds little if any progress has been made toward that goal. “Governments often say they have no public resources to support the clean energy transition,” says lead author Shelagh Whitley. “What we’re trying to do is highlight that those resources are there (but) are being used inefficiently. What should be a low-hanging fruit in terms of moving public resources away from fossil fuels is not happening, or where it is happening, it’s not happening fast enough,” she says.
“The G7 have pledged to phase out fossil fuel subsidies,” she adds, “but they don’t have any systems in terms of accountability to meet the pledges. They don’t have road maps or plans.” As Forrest Gump so cogently observed, “If you don’t know where you’re going, you aren’t likely to wind up there.”
The study ranked each country on its transparency, pledges, and commitments, as well as its progress towards ending the use, support for, and production of fossil fuels. France was ranked the highest overall, scoring 63 out of 100 points, followed by Germany (62), Canada (54). and the UK (47). The United States scored lowest with 42 out of 100 points primarily because of its support for fossil fuel production and its withdrawal from a 2015 global pact to fight climate change.
The report raised the hackles of officials in the UK. Its suggest that nation is still subsidizing fossil fuels by supported tax breaks for North Sea oil and gas exploration. “We do not subsidize the production or consumption of fossil fuels,” sniffed a spokesperson for the British treasury. “We are supporting other countries in phasing out their own fossil fuel subsidies, as part of our commitment to the G20 and G7 pledges,” he said in an email to the Thompson Reuters Foundation.
Fun & Frolic With The G7 In Toronto
The G7 conference should be an interesting place to be this week, what with Donald Trump slapping new tariffs on imports from virtually all the other member nations and giving a big group hug to coal companies during his entire presidency. Since he never listens to any of his advisers if he doesn’t feel like it and has never been known to actually read anything, the various reports and letters will likely have no influence on him whatsoever.
His plan to make the United States a pariah among nations is working perfectly. A few more years of this and the G7 might become the G6, with the United States becoming nothing more than a vestigial afterthought, like the human appendix — serving no useful purpose but still capable of wreaking havoc when inflamed.