Investors Dumping Coal & Gas Should Now Look at Sustainable Infrastructure
Attendees at the upcoming Financing Sustainable and Resilient Global Infrastructure Summit in May might just include the world's richest sovereign wealth fund which will be looking for somewhere to put its money after it has divested itself from coalmining by dumping 40 coalmining companies from its portfolio.
Norway's Government Pension Fund Global (GPFG) is worth $850 billion and is based on the country's oil and gas wealth. In its first report on responsible investing, released yesterday, it admits it has removed 114 companies from its portfolio on environmental and climate grounds.
The Norwegian government itself is proposing that Norway reduce greenhouse gas emissions by at least 40 per cent by 2030 compared to the 1990 level. It said in a statement yesterday that it "aims to join the EU 2030 framework for climate policies in order for Norway and the EU to jointly fulfil their climate targets".
According to Carbon Tracker, $112 billion of future capital expenditure in potential thermal coal production, excluding China, is at risk of becoming stranded. I.e., it is unsaleable and must be left in the ground. Even in China peak thermal coal demand could be imminent, according to their report Carbon's Supply Cost Curves, published last September.
Their report concluded that: "Deploying additional capital expenditure into high cost production is risky" and this must have been a factor in GPFG's decision.
Other companies dumped by GPFG include tar sands producers, gold miners and cement makers.
Scientific journal Nature published a paper a month ago written by University College London (UCL) that finds global fossil fuel reserves are approximately three times higher than the amount that can be safely burned by 2050 to keep global warming exceeding 2 degrees Celsius. It said: "results suggest that, globally, a third of oil reserves, half of gas reserves and over 80 per cent of current coal reserves should remain unused from 2010 to 2050 in order to meet the target of 2°C."
The divestments campaign is growing. Over $50 billion in fossil fuel company stocks have so far been shed by investors.
Go Fossil Free is an organisation dedicated to campaigning for divestment. It has set February 13/14, just one week away, as Go Fossil Free Day, with events planned around the world.
Throughout the world, communities, cities and even nations are committing to a net-zero emissions goal where they become carbon neutral within a certain timescale:
- Costa Rica aims to be carbon neutral by 2021;
- The Maldives wants to be carbon neutral within a decade;
- Vatican City has announced a plan to be the first carbon neutral state in the world;
- British Columbia is already the first provincials jurisdiction in North America to achieve carbon neutrality in the public sector; local governments across the state are also beginning to declare carbon neutrality.
Its website publishes a toolkit on how local governments can become carbon neutral. Since 2007, the overwhelming majority of BC local governments have voluntarily signed onto the BC Climate Action Charter, committing to take actions and develop strategies to achieve the following three goals:
- being carbon neutral in their corporate operations by 2012;
- measure and report on their community GHG emissions;
- create complete, compact, energy efficient rural and urban communities.
Not only that, but many CEOs are calling on international leaders to agree to a goal of net zero greenhouse gas emissions throughout the world by 2050. These include the founder of Virgin, Richard Branson, Unilever's CEO, Paul Polmon, Huffington Post Media Group's President, Arianna Huffington, and the U.N. Foundation's CEO, Kathy Calvin.
They are part of a group of 14 that have issued a statement this week urging all business leaders to commit remitting the equivalent of no carbon emissions in their long-term plans.
"Setting a net-zero GHG emissions target by 2050 will drive innovation, grow jobs, build prosperity and secure a better world for what will soon be 9 billion people," Branson said. "Why would we wait any longer to do that?"
But this is a man who wants to send a spaceship to Mars, who is obsessed with space exploration. Sending a rocket into space is probably the most energy-intensive single activity you can think of, and there is not enough biofuel potential in the world to power all of the world's airlines with sustainable biofuel.
Nevertheless, carbon neutrality in theory means that you can offset the burning of fossil feels in one place by the planting of trees or investment in renewable energy elsewhere.
And by the way, the 5th GIB Summit on Financing Sustainable and Resilient Infrastructure will take place on 27th & 28th May 2015 at the Hilton Basel, Switzerland. It will look at:
- What can be done to foster private financing in sustainable infrastructure investment?
- What kind of policies and partnerships need to be introduced and adopted in order to incentivise increased investment in this field?
- What are the roles and responsibilities of the different stakeholders?
Just one place where that spare cash might like to go.