Divestment from fossil fuels is accelerating around the world. But as forward-thinking investors move their money and fossil companies sell off their most polluting and criticized resources, companies looking to generate short-term gains are snapping them up. While this may shuffle assets off one company’s books, the world’s carbon emissions keep climbing, risking our safety, security and economic well-being.

As pressure to clean up corporate environmental performance mounts and companies increasingly look to shed dirty assets, how do we ensure we’re not just rearranging deck chairs on the Titanic? We need an equitable wind-down of fossil fuels and the funding that supports it.

There are now 1,500 organizations with assets totalling more than US$39.8 trillion that have already sold or are in the process of selling off fossil fuel holdings. Besides dozens of universities (including Harvard and the University of Toronto), the divestment list now includes France’s Banque Postale, the State of New York, and Europe’s largest pension, ABP. It’s hard for an oil giant to ignore: in 2021, Shell labelled fossil fuel divestment campaigns a “material risk.” Meanwhile, Bloomberg Intelligence reported that “oil companies are finding it increasingly difficult to raise financing amid rising environmental, social and governance (ESG) concerns, while banks are under pressure from their own investors to reduce or eliminate fossil-fuel financing.”

According to two recent reports from Goldman Sachs, the cost of developing fossil fuels has surpassed the cost of renewable energy projects. “That’s an extraordinary divergence, which is leading to an unprecedented shift in capital allocation. This year will mark the first time in history that renewable power will be the largest area of energy investment,” Goldman Sachs analyst Michele Della Vigna told Bloomberg.

These developments are critical. But even in the face of these tectonic shifts, national governments still plan to produce twice the fossil fuels than what is in keeping with limiting average warming to 1.5°C above pre-industrial levels, according to the United Nations Environment Programme (UNEP).

Not only are we failing to wind down fossil fuel production and use; we are adding to the problem. The markets alone cannot ensure this happens in a fast and equitable way. We need an actual government-regulated phase-out, and removing financing of the problem is key.

In the necessary transition to renewable energy, half the world’s fossil fuel assets could soon be financially worthless. In fact, new research published in Nature Energy shows that this could happen as early as 2036. Energy conglomerates have various reasons to peer into their crystal balls and determine which of their assets are at risk and worth shedding. There’s also incentive for the banks and other institutions financing these fossil fuel companies to sell off assets as well. Yet fossil-fuel-dependent communities, as well as workers and their retirement funds, ultimately will bear the costs – not bank executives.

Private equity and vulture firms are buying up coal-fired power plants, operating them at a lower cost for up to 15 years, and then shuttering them earlier than their original lifespan, to much fanfare. They claim this is doable because the lower operating costs lead to a quicker payoff, and in turn an earlier closure of facilities.

The world’s largest asset manager, BlackRock, is getting in on the action, along with banks such as Citigroup, HSBC and the Asian Development Bank (ADB). They’re framing the dirty asset takeovers as beneficial to the planet, but ultimately, they’re running distressed coal plants into the ground or extending their operational lives to grab the last cash possible before assets are stranded. Either way, these schemes should be viewed with a huge grain of salt. None of these financial institutions have good track records of actually meeting climate commitments, including reducing the emissions footprints of the projects they finance or getting out of financing fossil fuel infrastructure altogether.

What’s needed are just and equitable buyouts that permanently retire those assets without propping up fossil fuel companies or pushing the cost of environmental liabilities onto taxpayers. Retiring coal power plants early will, in 2025, cost an estimated US$164 billion, according to research from American non-profit RMI – a small price to pay when climate disaster damages topped US$210 billion worldwide in 2020 alone. The costs to retire facilities are dropping as more coal power plants become uncompetitive.

Retiring coal plants early will cost US$164 billion – a small price to pay when climate disaster damages cost US$210 billion in 2020 alone.

The shuffling of fossil fuel assets and the fact that oil and gas companies are subsidized to the tune of US$11 million per minute make it clear that the necessary wind-down of fossil fuel production and funding won’t take place without an agreement and framework in place. It certainly won’t happen in a way that will protect workers and communities most dependent on oil, gas and coal and that lack the resources to move away from them.

That’s why a growing network of parliamentarians; local governments including Los Angeles, Vancouver, Sydney and Barcelona; Indigenous leaders; youth; more than 1,000 civil society organizations; and more than 100 Nobel Prize laureates have endorsed the principles of a Fossil Fuel Non-Proliferation Treaty. This first-of-its-kind global initiative aims to increase transparency and accountability to phase out fossil fuels in the ground and accelerate a just transition. It would advance action along three pillars.

First, end the expansion of fossil fuels. In May 2021, the formerly fossil-fuel-friendly International Energy Agency issued a report stating there was no longer any “need for investment in new fossil fuel supply in our net zero pathway. Beyond projects already committed as of 2021, there are no new oil and gas fields approved for development in our pathway, and no new coal mines or mine extensions are required.”

Second, wind down production of existing fossil fuel stockpiles at the needed 5% annually, as per UNEP. Third, create agreements for wealthy fossil-fuel-producing countries to lead the transition and support countries more dependent and less financially resourced to move to clean energy and diversify their economies.

The markets, on their own, will not deliver the right signals and incentives as long as they are skewed by fossil fuel subsidies and policies that reward short-term profits despite the long-term risk to us all. International co-operation among governments is essential to wind down the source of the problem.
While some may grumble, the costs of a fossil fuel phase-out are affordable – and they are no doubt cheaper than the costs of climate inaction on our economies and our collective health.

Tzeporah Berman is the international program director at Stand.earth and chair of the Fossil Fuel Non-Proliferation Treaty.

The post Time for a fair phase out of fossil fuels appeared first on Corporate Knights.

Decades later, I never expected to be back on the blockades or fielding calls again from concerned customers of British Columbia forest products. When I was arrested by the RCMP with other forest defenders at a blockade in Fairy Creek last month, I had just visited one of the most beautiful old-growth forests I have ever seen. These old-growth forests on Pacheedaht and Ditidaht territories, on the west coast of Vancouver Island in British Columbia, are among the last of their kind anywhere in the world. I was astonished to see yellow cedars more than a thousand years old. The ancient giant trees that are iconic around the globe are not only the pillars of these rare temperate rainforest ecosystems – they are part of the most carbon-rich forests on earth. Standing among these giants, there is no question that they are worth more than any dollar amount their felled lumber can deliver. It’s clear why Indigenous leaders, scientists and their allies are risking their safety and freedom to defend them.

Civil disobedience is a last resort, especially in the middle of a pandemic. When it comes to old-growth forests in British Columbia, it is no secret how desperate we are. More than 97% of the original large, old forests that stood in this province prior to colonization and the advent of industrial logging have been destroyed. But even more shockingly, the majority of what remains is still unprotected and open to logging. In the case of forests on Ditidaht and Pacheedaht territory, those old-growth forests are still standing thanks to the tireless efforts of forest defenders, but they remain at imminent risk.

On June 9, B.C. Premier John Horgan publicly accepted a call from Pacheedaht, Ditidaht and Huu-ay-aht First Nations to defer old-growth logging in parts of their territories, including areas in Fairy Creek and the Walbran. Hogan called the two-year deferral “monumental.” While it’s an important development, it has not stopped the chainsaws.  The new deferral leaves critical old-growth forests in the area – and in fact, all across B.C. – open to logging. Elder Bill Jones has asked forest defenders to stand their ground and continue protecting these ancient trees. As arrests continue, it is clear that without broad bans on old-growth logging, the situation will only escalate. Elsewhere, many First Nations, including most recently the Squamish Nation, have publicly demanded old-growth logging deferrals or declared moratoria on old-growth logging in their territories.

At Fairy Creek, the logging company in question is not a stranger to the controversy of logging old-growth forests in B.C. Teal Jones, headquartered in Surrey, ships wood products to a variety of locations and sectors, including lumber for building and shingles for siding. As tensions mount around the remaining old-growth forest and the lack of government action, customers of Teal Jones and other old-growth logging companies (including Canfor, West Fraser, Western Forest Products and Interfor) should expect a sharp increase in scrutiny on their sourcing. Many home- and office-supply and building companies, including Home Depot and Staples, have policies against sourcing from endangered forests after long campaigns from Stand.earth (then known as ForestEthics) and our partners. Now is the time for builders, home supply stores, and pulp and paper customers to be proactive and commit to ending any purchasing sourced from at-risk old-growth forests. If they don’t hold themselves accountable, our movement certainly will.

In my experience, what customers of wood and paper products want is certainty. Certainty that the forest products they buy are harvested sustainably and don’t come from endangered-species habitat, endangered ecosystems or increasingly rare old-growth forests and certainty that they will not become embroiled in controversy such as what is unfolding in British Columbia.

Photographer TJ Watt captured images of old-growth trees before and after logging in Vancouver Island’s Caycuse Valley in the spring and fall of 2020. Caycuse Valley is not protected by deferrals being applied to other areas of Fairy Creek.

Provincial and federal governments in Canada have a vital role to play in delivering that certainty. B.C.’s NDP government was elected on a promise to implement the recommendations of an expert panel on old growth, which included immediate logging bans in at-risk old-growth forests like the ones at Fairy Creek. But Premier Horgan and his government have instead faltered on their promise, with recent deferral announcements leaving the vast majority of old-growth forests on the chopping block.

Both B.C.’s and Canada’s commitments to large-scale nature protection and bold climate action are seriously undercut when some of the most carbon-rich forests on the planet are being clearcut. The provincial and federal governments need to collaborate to ensure protection of our remaining old growth and threatened species habitats. They have the funds and the tools to support Indigenous stewardship initiatives and land-use visions, as well as a just transition for workers and communities away from old-growth logging. All they need is the political will, and growing marketplace concern and the escalating actions at Fairy Creek and across B.C. will give it to them one way or another. To date, 222 people have been arrested while standing up for these ancient, giant trees.

Almost 30 years ago when I was on my first blockade at Clayoquot Sound, I knew that the solutions to these issues would be difficult. But I never thought that all these years later, we would still be fighting to defend irreplaceable old-growth forests – only now, even fewer stands of these ancient trees remain. This must be the last time. We owe it to our grandchildren and their grandchildren to leave a liveable world, one where they can walk through an old-growth rainforest and crane their necks up at the treetops in awe.

Tzeporah Berman is the international program director at Stand.Earth, chair of the Fossil Fuel Non-Proliferation Treaty Committee, and  an Adjunct Professor of Environmental Studies,  York University.

The post B.C.’s old-growth forests not out of the woods appeared first on Corporate Knights.

COVID-19 is not the only curve we need to flatten. Building back better means also bending and flattening the curve on greenhouse gas emissions.

Building back better means prioritizing communities, companies, industries, plans and infrastructure that protect what we have – biodiversity, stored carbon, ecosystem services – and stopping or winding down those that do not.

The focus on tree planting is a very Canadian approach – we don’t want to rock the boat on existing industries. But let’s be clear: our forest policies mirror European policies from the 1960s, while our agricultural policies look like those from the 1980s – neither of which focused on maintaining ecosystems as the foundation of resiliency. Europe is now scrambling to undo these effects – to rewild.

Last month, in a new study in Nature on “irrecoverable carbon,” scientists detailed the vast stores of carbon that are being released and cannot be restored by 2050. The study calls for the next generation of protected area networks to safeguard critical ecosystems with high, irrecoverable carbon stocks.

A groundbreaking report released in early May commissioned by the UK treasury assessed the economic value of biodiversity, and concluded that current high rates of biodiversity loss pose a major risk to our economies and our way of life. Just as diversity within a portfolio of financial assets reduces risk and uncertainty, diversity within a portfolio of natural assets – namely, biodiversity – directly and indirectly increases nature’s resilience to shocks, reducing risks to the services on which we rely.

Boreal forests store more carbon per hectare than any other forest type on Earth, other than mangroves. Yet every year logging companies clearcut 400,000 hectares – almost a million acres – of boreal forest. That’s a rate of seven NHL hockey rinks per minute.

Research in British Columbia has shown that after a clearcut, there’s a minimum 13-year window during which the logged and replanted area does not sequester carbon, and it can take more than a hundred years for forests to recover to their pre-harvest state. This analysis suggests that clearcutting is preventing forests in B.C. from removing an additional 26.5 million tonnes of carbon dioxide per year from the atmosphere.

Canada’s primary forest loss is amongst the highest in the world.

Maintaining older, biodiverse forests draws down carbon levels and helps buffer imperilled ecosystems against the impacts of climate change. Protecting intact forests also makes nearby communities more resilient to climate impacts such as drought, floods and wildfire.

In April, Stand.Earth released an investigative report on Canada’s growing wood-pellet industry. Pellets are heavily subsidized and touted by our governments as a climate solution. However, growing the wood-pellet export industry in Canada doubles down on carbon emissions: first by instantly releasing a forest’s stored carbon at the smokestack, and second by further degrading forests, which are a critical ally in the fight against climate change.

In the words of scientist Bill Moomaw, professor emeritus at Tufts University and the author of several Intergovernmental Panel on Climate Change reports, “If we let some of our existing natural forests grow, we could remove an additional 10 to 20% of what we emit every year; instead, we’re paying subsidies to have people cut them down, burning them in place of coal, and counting it as zero carbon.”

Listen to the science.

We need to focus on protecting high biodiversity areas and carbon-rich primary, intact and old forest landscapes. For example, we are still allowing logging in critical caribou habitat (to make toilet paper) when our own scientists have said we need to protect those same forests.

This needs to stop now.

By supporting Indigenous Guardian programs, employment centred on land restoration, and economic diversification in forest communities, we can create more jobs. Canada could be a global leader and also make progress on reconciliation by committing to reach a 30% protected area target, with a majority of those lands integrating existing Indigenous Protected and Conserved Area (IPCA) proposals already submitted through Canada’s Target 1 process.

It is time to reimagine the wood-products industry in the same way that we are starting to reimagine the energy and oil sectors. We can add jobs and economic vitality with a value-added job strategy. We can build furniture, make things we need and create consistent employment in forest communities. And we can stop shipping raw logs and wood pellets while clearcutting the forests that are our planet’s carbon pools. We can explore alternate fibre supplies, recycled fibre and agricultural waste.

Rather than maintaining existing practices, which are still designed to ensure maximum extraction, we need to update forest practices to reflect adaptation science and ecosystem-based management that maintains or restores original forest complexity. This model can also transform forestry from boom and bust cycles, to add good jobs with built-in longevity: selective logging in forest ecosystems, investment in second-growth milling, and Forest Stewardship Council–certified logging will employ more people.

We need to get honest about industrial impacts on our forests and carbon accounting. A recent report from Wildlands League revealed that Canada is underreporting our rates of deforestation. New numbers show that approximately 21,700 hectares are deforested each year in Ontario due to roads and landings imposed by forestry in the boreal forest (roughly equivalent to 40,000 football fields). This is seven times greater than the reported deforestation rate by forestry for all of Canada, and these findings undermine the claim of “near zero deforestation” in Canada.

We also have a broken carbon accounting system when it comes to terrestrial carbon. We are not properly accounting for emissions from logging old forests or the methane emissions from peat and soil disturbance. A recent University of Waterloo paper looked at peat and soil disturbances from seismic lines used in oil and gas exploration in Alberta alone and found that these undocumented emissions would boost Canada’s national reporting of methane in the category of land use, land-use change and forestry by about 8%.

Instead of tearing down nature, we need to rebuild our systems and protect the abundance we have.

The post Clearcutting the planet’s carbon pools appeared first on Corporate Knights.

Greenpeace has accused Koch Industries, the private company run by the brothers, of being a primary sponsor of the “climate denial machine,” with tens of millions of dollars backing lobby efforts, front groups and politicians willing to protect oil-industry interests.

Steyer is tired of it. On Maher’s show, he issued a direct public challenge to the brothers: Come out of the shadows, put down your expensive megaphones, and debate me like men.

It’s not likely either Koch will go for the bait, but Steyer’s challenge was a serious one. Since October 2012, when he stepped away from Farallon Capital Management, the investment firm he founded and led, Steyer has dedicated himself and his wealth to tackling energy and climate issues.

“History will judge this generation,” he told environmentalist and author Tzeporah Berman, who interviewed Steyer on April 15 for Corporate Knights. He felt no choice but to throw his time and resources – estimated at more than $1.6 billion – into raising awareness of the issues and “bringing urgency to the fight.”

On that front he has already spent millions of dollars protesting the Keystone XL pipeline and helping politicians with strong climate change platforms get elected. In February, he pledged to spend $100 million – half from donations, half out of his own pocket – going after politicians in the 2014 U.S. elections who are anti-environment and deny climate change. His environmental non-profit, NextGen Climate, is leading that charge.

Here, Steyer explains his motives and convictions, views on clean energy, and what he’s likely to take on next in a post-Keystone world.

BERMAN: What motivates you in your fight against Keystone XL?

STEYER: Keystone is a symbol of the bigger fight. I believe what is really going on is the great challenge of our generation – climate change. Many generations seem to have had them in modern history. For us, we are here right at the point in history where humanity is at risk of spewing so much carbon dioxide as to make the planet inhospitable to civilization. So that’s the big motivation. It’s our generation’s great challenge. It’s actually much easier than having to pick up a rifle and storm the beaches at Normandy. But failure will be catastrophic. And think back to other generational challenges – nobody remembers if you were on the right side of 98 per cent of the issues of your time if you flunked the big one. In today’s world, with all that we have learned from science, if you still support fossil fuels over advanced energy, I think that’s your obituary.

So that’s why Keystone is so important. We, in the United States, need to make a decision collectively to go a different way on energy. And this is a very straightforward place to decide, not just that we’re not going to allow the Keystone pipeline but that we’re also going to develop other sources – cleaner sources – of energy. This is going to be the pivot point for us as a country.

There are a couple of other things going on as well. One is that we know Keystone is not the only pipeline being proposed – that it’s one of at least five. But it’s the biggest one. It’s the one that goes through the United States. It’s a matter of public record that they (the oil companies) are trying to develop the tar sands so that it produces many times what it produces today. This (Keystone) pipeline enables them.

Finally, sometimes you just go to where the fight is. There are others too – phasing out coal plants in the U.S. is a huge priority, and building advanced energy is a huge priority. But Keystone is a lightning rod. We’re going to see it never gets built.

BERMAN: And if Keystone is approved by President Obama?

STEYER: I believe with all my heart that the Keystone XL pipeline is not in the best interest of our kids, and I don’t expect the pipeline will be approved.

BERMAN: The big question on all of our minds, then, is what’s next for you post-Keystone, whether or not the pipeline gets a green light?

STEYER: Either way, we will be spending the bulk of 2014 on specific races in the United States. Obviously, it is not a presidential election year, but there are a bunch of governors who are up (for re-election), a third of the senators, and all the congress people.

BERMAN: You made a big decision a couple of years ago to work on climate and energy. Can you tell us a little bit about what you’ve been working on besides Keystone?

STEYER: Three years ago we started to set up a state-by-state business organization to work through the specific policies on energy generation in the United States. The way people use and generate energy is very different by state. The problems are different, and we felt as if there needed to be a local voice for advanced energy or we’d never get the kinds of policies in place, the kinds of regulations in place that are necessary to have a level playing field. We’ve also worked in specific political races. And we’re now doing a study called “Risky Business” to show that you don’t have to choose between the economy and the environment. This study, working with Hank Paulson and Mike Bloomberg, essentially asks “What’s the economic impact if we do nothing on climate?”

BERMAN: How, in your mind, does the United States meet its energy needs if we’re addressing climate change to the degree that’s necessary? What does that look like?

STEYER: Well, one thing we do know is that there are a lot more jobs in advanced energy than in fossil fuels. There are more jobs today just in the U.S. solar industry than coal and natural gas combined. So the outlook is positive. But I don’t trust anybody who says they know how the future looks for sure. If you look at what happened when we broke up Ma Bell and deregulated the telecom industry, basically nothing looks the same today. I think in 1983, when they did break up Ma Bell, Alexander Graham Bell would have felt quite comfortable making phone calls in the system as it existed then. Today we’ve made incredible advances beyond that point. In the same spirit, I would say that if you look at the energy generation and distribution business in the United States, Thomas Edison would feel quite at home since it is the system he set up. Is there any other business in the world that is still the same after 100 years? The telecom industry went from very old-fashioned stuff in 1983 to things that my parents never heard of. Advancements in clean energy are poised to do the same.

BERMAN: Former U.S. energy secretary Steven Chu once told a crowd of oil executives in Calgary that the Keystone debate is overshadowing other opportunities for energy exports. He talked a lot about Canada’s hydroelectric potential, and how Canada should be exporting more clean power to the United States. Do you agree?

STEYER: I am so thrilled about that. Steve Chu is exactly right. It would be absolutely fantastic if Canada were to take advantage of its many hydro and wind energy opportunities and send us clean energy. The United States and Canada have cooperated on other issues in the past, dealing with pollution, including acid rain and the hole in the ozone layer. There’s absolutely no reason we can’t cooperate successfully again. And this (increased Canada-U.S. clean power trade) would be very good for the Canadian economy and the U.S. economy.

BERMAN: What, in your view, is the definition of a good corporation? Is there any such thing?

STEYER: A corporation is just a shell. It’s a legal entity. The people and culture within it need to take into account more than just the bottom line. A good company is also thinking about the human and environmental costs of what you are doing.

BERMAN: We’ve talked previously about your philosophy of the intersection between policy, technology and finance. Can you articulate that a little bit for readers?

STEYER: I always argue that I am standing up for three things, which everyone in the United States claims to support but which in fact they don’t always support. One, we are standing up for democracy. Basically, we want this to be a broad-based societal conversation where citizens get to vote. That is the way that we do massive social change in the United States. We believe there has to be a political change to put these policies in place, and that can’t be done secretly. It has to be done through conversations that involve all American citizens. Second, we believe that once those policies are in place, that the private sector will be the engine for carrying out the innovation and the transformation that is necessary. They’ll make a lot of money doing it, and that’s great. Third, we believe in full cost accounting. It’s the old computer saying “garbage in, garbage out.” If you don’t put all the information into the computer, it will optimize the wrong thing; it will give you the wrong answer. That’s what we argue is happening now. Basically, we are not including all the costs. We are not including the cost of pollution and therefore we’re optimizing the wrong answer.

BERMAN: In Canada, there is a sense of inevitability to the debate around tar sands expansion. That is, the pipelines will get built and expansion will happen. But when I talk to you I get the sense of inevitability on the other side – that you truly believe the advanced energy economy is here and happening.

STEYER: It is happening. If you see where people are investing their money, the fact is there are a lot more cleantech jobs being produced than there are fossil fuel jobs in the United States – a ton more. Money is growing in clean energy and cleantech, and fossil fuel investments are increasingly getting terrible returns. So the question is not whether this is happening or whether it is going to happen. It is happening. The question for both of our countries is pace.

The post Man on fire appeared first on Corporate Knights.