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Banks and fossil fuels: They are breaking the first law of holes

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A new report released today from the Stockholm Environment Institute has more stark evidence we need to be shifting away from fossil fuels at a rapid clip.

It highlights how, if we accept that keeping global warming to less than 1.5ºC above pre-industrial levels is a good idea, then our carbon budget is set to run out in about six years. Even stretching that limit out to representing a 66% chance of staying below 2ºC and the carbon budget will run out in less than 20 years.

That doesn’t afford enough space to sustain all the coal, oil and gas projects currently operating let along new projects that would just add to the unburnable carbon embedded through our economy. The first rule of holes is ‘if you find yourself stuck in a hole, stop digging’. Literally and metaphorically, we urgently need to stop digging more holes.

But since late 2015, when the big four banks committed to support the 2ºC global warming limit, they have contributed to deals for new fossil fuel projects capable of adding a massive three billion tonnes of CO2 to the atmosphere.

That’s the equivalent of over five years of Australia’s emissions right there, in a handful of new projects.

The table below shows the new fossil fuel projects that major Australian banks have provided credit to since they committed late last year to support the 2ºC global warming limit.

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While some of these projects are examples of adding to the global capital stock of carbon reserves and others would facilitate the burning of carbon reserves, all of them act to expand an industry that urgently needs to contract in order to fit within a carbon budget we are currently on track to exhaust within six years.

Given the findings of the Stockholm Institute Report, it is hard to escape the reality that even the smaller projects on this list are inconsistent with action to limit global warming to below two degrees.

But there is a clear difference in the scale of projects listed and their contribution to increasing carbon emissions.

This quote from Lundin Petroleum with regard to their Johan Sverdrup discovery speaks for itself: [the project] ‘is one of the largest oil discoveries ever made on the Norwegian continental shelf and will prolong the life of the Norwegian oil industry for several decades.

And development of Lundin’s 22.6% interest in the Johan Sverdrup oil field was financed, of course, by none other than ANZ and Commonwealth Bank.

The largest project of all, the Commonwealth Bank funded Sabine Pass LNG terminal in Louisiana, is on another scale entirely.

With its full planned capacity of 27 million tonnes per year, it is larger than the three LNG terminals built on Curtis Island in Queensland combined.

Australia’s banks are, it seems, as impervious to empirical evidence as certain Senators. We hope that their customers and shareholders do a better job of talking sense to them because if the banks can help ‘liberate’ as much CO2 through a handful of deals as the Australian economy can manage over six years, it’s going to be customers, shareholders and the broader community that are needed to bring the banks into line.

Julien Vincent is Executive Director of Market Forces  

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  • Mick Healy

    They wont stop and no one can make them stop… the end.

    • John Saint-Smith

      Who said anything about ‘one’ person stopping them?
      What would happen if a majority of their shareholders mounted combined action in the courts charging the banks with reckless investment strategies, endangering shareholders’ money and their lives through the effects of catastrophic climate change?
      Or you could just lie down and wait for the inevitable…
      When it comes time to abandon ship, can I not be on your boat please.

      • MaxG

        Wishful thinking! They won’t… the world is going down the tubes and not one person I know gives sh!t… I have given up educating… unless people are directly affected and understand why, they will not care… anyone who cares for this planet cannot vote for the two major parties — see how many do… the banks will be where dollars can be made… this is capitalism at its best… and it’s getting worse…

        • John Saint-Smith

          THREE MEDICAL CONDITIONS ESSENTIAL FOR CLIMATE ACTION NOW

          Optimism. No matter what the doomsayers claim can
          never be done, I would carry on trying. It’s so much more fun than crying in my
          beer.

          Selective deafness. No matter what advice I receive
          that doesn’t fit my agenda, I won’t hear it. So rest assured, I won’t take your
          tragic advice.

          Watery eyes. When the people take charge of
          their lives and prove the ‘pragmatic’ cynics wrong, I tend to tear up.

          In short, if it was so easy that
          these brown nosed boofheads could do it from their usual position, someone
          would have done it already.

          • Mick Healy

            You forget being a total dickhead..

          • John Saint-Smith

            Whatever it take! You, on the other hand have already given up, so thank-you for throwing me off your boat, it has improved my chances dramatically!

        • seao2

          You need a bit of Eearth, mate.
          http://www.e-e-a-r-t-h.org/

      • handbaskets’r’us

        I can’t really talk about it with my kids any more.
        It’s just too sad.

      • Mick Healy

        Are you really this pathetically stupid? when the time comes to abandon ship? wtf? you retarded? if you were on my boat, you would soon be drowning overboard, stupid we don’t need.