The impact of extracting new fossil fuels has been known for some time, but since the Paris accord committed the world to a maximum 2°C temperature increase this century, several studies have made it clear that only by leaving untapped fossil fuels in the ground can the target be met. The fact that the World Bank still lends $1 billion per year for oil and gas projects in developing countries has provided an incentive for further exploration.
But the bank now says it ‘will no longer finance upstream oil and gas’ projects after 2019, except in very rare cases to alleviate poverty, and only then if they do not undermine the Paris targets. The announcement is expected to prompt other financial institutions to withdraw funding for fossil fuels.
The news was greeted enthusiastically by a range of environmental organisations. The Washington-based NGO Oil Change International said: ‘It is hard to overstate the significance of this historic announcement. The World Bank has raised the bar for climate leadership by recognising the simple yet inconvenient truth that achieving the Paris agreement’s climate goals requires an end to the expansion of the fossil fuel industry.’
Another announcement from the One Planet summit came from the French insurance giant Axa, which said it would stop its investments in tar sands and no longer insure controversial US oil pipelines. The company’s chief executive Thomas Buberl said the decision to dispose of tar sands and coal investments was taken for both ethical (environmental and human rights) and business reasons. It follows recent decisions by the French bank BNP Paribas and the Dutch finance house ING to divest from tar sands.
T&E’s climate manager Carlos Calvo Ambel said: ‘These announcements are highly significant. They send the signal that fossil fuels currently in the ground are not only bad for our climate but are of dwindling investment value. It is a signal Europe needs to receive – the EU must abandon its belief that natural gas can be a bridging solution to a low-emission economy and decide now not to spend a single euro more on gas infrastructure.’
The One Planet summit was organised by the French president Emmanuel Macron, the UN Secretary General António Guterres, and the World Bank president Yim Yong Kim. It used the slogan ‘Make the planet great again’, which observers said was directed against the Trump administration that has withdrawn the US from the Paris commitments. Macron created headlines by telling the summit the world was ‘losing the battle’ against climate change, adding: ‘We’re not moving quick enough. We all need to act.’