Viewpoint: Taking the money out of climate change

By Lenore Fahrig

Editor’s note: Do you agree or disagree with this viewpoint? You are welcome to argue and support your position with evidence (in a submission not exceeding 800 words.)

The climate is changing and it’s changing fast. That’s according to the latest UN Intergovernmental Panel on Climate Change report. Cyclone Haiyan, hitting the Philippines last fall, was the most powerful hurricane ever recorded. The past year saw record flooding in Alberta, Eastern Europe and England. Many areas have recently suffered intense drought, including Mexico, the U.S., the Middle East, Australia and China. In a world of more than 7 billion people, intensifying climate change in the coming decades will mean horrendous human suffering on a scale never seen before. To quote the Reverend Stephen Croft of England, “The threat of climate change is a giant evil, a great demon of our day. The damage this great demon will do to this beautiful earth, if unchecked, is unimaginable.” The climate change demon is no longer slowly creeping up on us; it has arrived and is breathing down our necks.

And it’s our fault. We have been digging up and burning oil, coal, and natural gas – fossil fuels – to drive the world economy. Fossil fuels are used in the production and distribution of everything we make and do – our food, clothing, housing, medications, electronics, garbage collection, snow removal and everything else. In fact, fossil fuels provide 85 per cent of our energy. The world economy is a fossil fuel economy.

In burning fossil fuels, we are spewing carbon dioxide into the air – “carbon emissions.” There is now more carbon dioxide in the atmosphere than at any time in human existence. As carbon dioxide increases, it traps more and more heat, causing the earth to warm and the climate to change. Scientists predicted this a century ago and the evidence that we are changing the climate has been clear for at least a decade. But so far, efforts to reduce carbon emissions have failed. While some of us have reduced our driving and lowered our thermostats, the economy has continued to grow and carbon emissions have risen with it. To avoid the worst of climate change we need to stop using fossil fuels altogether and build a “fossil-free” economy on energy that does not involve carbon emissions.

This will not be easy; money stands in the way. The fossil fuel companies have amassed four times more fossil fuels in their proven reserves than scientists say we can burn without hitting the “climate change cliff.” Burning just 20 per cent of proven reserves will put so much carbon dioxide in the atmosphere that climate change will be unstoppable and catastrophic. At current rates, we have only 14 years before we reach the climate change cliff. To stay clear of the cliff, we need to not burn 80 per cent of the fossil fuels that the fossil fuel companies are counting on us burning.

It is hard to imagine how we will do this, when that 80 per cent is worth over $100 trillion (that’s $100 million million) in gross revenues to the fossil-fuel companies. That is a lot of money to leave in the ground. What’s more, these “unburnable” fossil fuel reserves are already included in the stock values of those companies. How can we break down this financial barrier to a fossil-free economy?

Some say we should reduce demand for fossil fuels by reducing our consumption of them. While this can be part of the solution, it alone will not solve the problem. For example, if everyone in the world stopped driving cars right now, we would have 17 years instead of 14 years before we reach the climate change cliff, but we would still go over it. The problem is that our personal carbon footprint is largely out of our own control. There is no fossil-free option for almost everything we buy and do (food, clothing, garbage collection, etc.) because we live in a fossil-fuel economy.

To shift the economy from fossil fuels to fossil-free energy, we need to remove the financial incentive for fossil fuels. To this end, many organizations – churches, universities, city governments, foundations and others – have committed to fossil-fuel divestment, freezing new investments in fossil-fuel companies and setting a schedule for moving existing investments out of fossil fuels.

Fossil-fuel divestment makes sense ethically and practically. Ethically, if it’s wrong to wreck the climate, it’s wrong to profit from that wreckage. Practically, it signals to other investors and governments that financial markets are overvaluing the fossil-fuel reserves that we must not burn. In fact, some financial leaders have heard the message and are warning investors that the fossil-fuel companies are overvalued, causing a “carbon bubble” in the market. Fossil-fuel divestment tells fossil-fuel companies and governments that it is time to change the economy swiftly and completely from fossil fuels to fossil-free energy, before it’s too late for the climate.

More information:

1. FossilFree: a list of organizations that have committed to fossil fuel divestment.
http://gofossilfree.org/commitments/
2. Canadian Centre for Policy Alternatives, 2013. Canada’s Carbon Liabilities: The Implications of Stranded Fossil Fuel Assets for Financial Markets and Pension Funds. https://www.policyalternatives.ca/publications/reports/canadas-carbon-liabilities
3. Intergovernmental Panel on Climate Change (IPCC) Fifth Assessment Report. http://www.ipcc.ch/report/ar5/.

Lenore Fahrig is a Glebe resident and Biology Professor at Carleton University.