This story was originally published by Canary Media. It has been edited to conform with Corporate Knights style.

In its efforts to block U.S. offshore wind development, the Trump administration has halted project construction, rolled back tax credits and spread misinformation. Now, in the latest manoeuvre, the administration is paying a global energy giant nearly US$1 billion to walk away from its plans to install turbines off the east coast.

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Oil prices shot up on Monday as disruptions related to the war in Iran sent shockwaves through financial markets, underscoring the risks for countries that have been slow to diversify beyond fossil fuels.

Brent crude oil, the benchmark for a majority of the world, surged to nearly US$120 per barrel, the highest it had been since 2022, when Russia invaded Ukraine. Prices for West Texas Intermediate crude oil, the U.S. benchmark, rose to about $100, also the highest since 2022.

As Iran has faced attacks from the United States and Israel, it has responded in part by threatening oil tankers travelling through the Strait of Hormuz. Some producers have reduced or paused their output in response to this risk, according to the International Energy Agency.

“This shock is being driven by geopolitics and physical supply risk, so prices are moving quickly through global markets,” says Jan Rosenow, professor of energy and climate policy at the University of Oxford, in an email. “That makes it feel sudden and hard to control.” Countries with more renewables in their power mix are less exposed to the price spikes, which reduces the inflation they will see compared with past oil crises, he says.

Gernot Wagner, an economist at Columbia Business School, says the price spike provides a familiar warning for policymakers. “The biggest lesson: Oil – much like coal and gas – is a commodity. Its price will always fluctuate based on geopolitical whims,” he said in an email. “Solar, batteries, heat pumps, induction stoves are technologies. They can only get better and cheaper over time.”

President Donald Trump acknowledged high oil prices on Sunday, posting the following on Truth Social: “Short term oil prices, which will drop rapidly when the destruction of the Iran nuclear threat is over, is a very small price to pay for U.S.A., and World, Safety and Peace. ONLY FOOLS WOULD THINK DIFFERENTLY! President DJT.”

The U.S. average price for regular gasoline is $3.48 today, according to AAA, an increase from $3 a week ago.

U.S. Energy Secretary Chris Wright said Sunday during a CNN interview that tanker traffic will soon resume on the Strait of Hormuz. Asked about rising gasoline prices, he said the increase many consumers saw over the weekend is likely to be short-lived. “We want it back below $3 per gallon, and it will be again before too long,” he said. Wright said this will take “weeks” and is not a “months thing.”

Some observers have drawn parallels between the current price shock and the one that followed the 1979 Iranian revolution. But Rosenow notes some big differences: “The key difference from the 1970s is that we now have credible alternatives.” He adds, “Each price shock reinforces the same lesson: energy security and climate strategy are aligned. Cutting dependence on imported fossil fuels is not only about emissions; it is about reducing structural economic risk.”

Dan Gearino covers the business and policy of renewable energy and utilities, often with an emphasis on the midwestern United States. 

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Scarcely a week passes without another handout to add to the pile.

Most of this work has involved undermining anything that promotes renewables and electric vehicles or puts regulatory constraints on large emitters. But the Trump regime has also surreptitiously opened up a somewhat unexpected front in its denialist war: the International Energy Agency’s annual modelling exercise, widely seen as the definitive prognosis for long-term power demand and its impact on the earth’s climate.

Recognizing that forward-looking scenarios help shape the futures they describe, fossil fuel lobbyists and their allies in government mounted a back-channel pressure campaign. They threatened to withhold the United States’ 14% contribution to the IEA’s budget unless the multi-lateral agency stopped talking about third-rail topics like peak oil and instead put out forecasts that muddied the energy transition waters. Their primary target: restoring the IEA’s reliance on an innocuously named energy model, known simply as the “current policies scenario” (CPS), which the Paris-based organization dropped back in 2021, at a radically different political moment.

Guerrilla warfare

When the IEA released its World Energy Outlook (WEO) in October 2021, the agency sketched out two versions of the future: the “stated policies scenario” (STEPS) and the more ambitious “announced pledges scenario.” Together, they provide a view of what 2050 would look like, either with modest progress or bolder ambition, respectively.

Yet in a move that channelled the spirit of that fleeting moment, the IEA added something new and exciting: the “net-zero emissions by 2050 scenario.” This model, it stated, “charts a narrow but achievable roadmap to a 1.5 °C stabilisation in rising global temperatures and the achievement of other energy-related sustainable development goals.” Climate advocates were thrilled by both the IEA’s big goal and its instructions for how to get there. Meanwhile, the Organization of the Petroleum Exporting Countries and U.S. oil and gas interests fumed about all these models forecasting their demise.

It took five years for the backlash to reach IEA’s analysts. For the 2025 edition of the WEO, released in November, the agency’s most ambitious scenario is now STEPS, which scoped out the least aggressive energy transition in 2021. The CPS scenario – which anticipates a catastrophic 3°C increase in global warming by 2050 – was back, while net-zero by 2050 had vanished without a trace. The NZE remains, for now, but Neil Grant, senior climate policy analyst at Climate Analytics, worries about whether it will be excised next year. “If the IEA caves there and gets rid of it, I think you will start seeing people saying, ‘what’s the point?’”

In a lengthy blog post accompanying the new WEO, two senior IEA officials explained the differences between STEPS and CPS with the example of vehicle efficiency standards in Japan. “Under CPS, these policies continue after their end-date but are assumed not to be strengthened,” they wrote. “The STEPS assumes they continue and are strengthened in line with the previous ambition.” The current Japanese policy aims to improve vehicle efficiency by 20% by 2030. Both scenarios reflect the bump, but STEPS predicts that efficiency will continue improving after 2030, while CPS doesn’t assume any more momentum.

“None of the scenarios in the WEO are a forecast,” the authors wrote in a commentary outlining their methods. Nor did the IEA’s use of CPS indicate the presence of a finger on the scale. The IEA’s aim, they said, is to rationally explore the consequences of different policy choices.

It’s clear that there’s been quite a lot of pressure this year in terms of their funding.

— Guy Prince, head of energy supply for Carbon Tracker

But critics didn’t buy the IEA’s wonky explanations about the renewal of empirical rigour, pointing out that CPS ignores the inevitability of continuing technological innovation, takes uninterrupted growth in oil and gas demand as a given, and foresees no drop in emissions. “What the CPS does is take that Trump administration worldview that we’re seeing implemented the U.S. and assumes its dominance across a whole range of other sectors and across the rest of the world,” adds Grant.

In effect, the CPS provides a road map to 2050, but with 2024 policies frozen in place. IEA watchers claimed that its presence is meant to deliver cover to the fossil fuel backers in and around Trump and MAGA congressional Republicans. Indeed, on the eve of the new WEO’s release, which coincided with COP30 in Brazil, a pair of senior congressional Republicans rewarded the embattled agency with a bit of mobbish praise. In a letter, they congratulated IEA executive director Fatih Birol for freeing the agency from the evils of “activism”: “This course correction, which U.S. House Committee on Energy & Commerce leadership has been requesting, will help restore the IEA’s credibility and impartiality.”

“It’s clear that there’s been quite a lot of pressure this year in terms of their funding,” says Guy Prince, head of energy supply for Carbon Tracker. He describes the return of CPS as “a subtle re-positioning” with enormous consequences.

Dave Jones, chief analyst at U.K.-based Ember Energy Research, says that by restoring CPS and situating it as the counterpart to STEPS, the energy agency is signalling a problematic equivalence to global policymakers and investors. “The biggest issue I have with it is that the IEA have used it as equal weighting to the STEPS scenario,” he observes. “I don’t think people expected that to happen.” Most analysts, policy experts and investors would have expected to see CPS offered as a secondary scenario, he says.

The realpolitik here is about buttressing the oil and gas industry’s ability to raise capital and continue operations in the face of an increasingly efficient and inexpensive clean-electricity industry dominated by China, explains Keith Stewart, Greenpeace Canada’s energy analyst. “Adding this scenario is part of that guerrilla warfare going on to try and support an oil and gas industry that is fighting for its life,” he says. “They’re not going to disappear tomorrow, but they can see the writing on the wall unless they can somehow get enough political muscle behind them to stop the transition.” (The Canadian Association of Petroleum Producers did not respond to a request for an interview.)

Slow-walking the energy transition

Trump’s targeted attack on the IEA’s long-range models operate in lockstep with his administration’s shocking assault on science. Since January, a series of moves across the U.S. government have hobbled environmental policy by choking off climate data and cancelling climate science. Agencies that gather and analyze empirical information – the Environmental Protection Agency, the National Oceanic and Atmospheric Administration (NOAA), the Department of Energy, as well as countless university scholars – have had their research budgets slashed, their websites raided and their data streams blocked.

A major concern is access, says Mark Winfield, a professor of environmental studies at York University. “If you were doing observational atmospheric science, for example, are you going to lose data from NOAA satellites and the kind of thing that they use on an ongoing basis? That applies to things like the Intergovernmental Panel on Climate Change, because U.S. science and data underlies an awful lot of that work.”

In the case of the IEA’s models, scenarios aren’t climate science, per se, but they involve complex economics, deep policy research and assumptions about how all sorts of industries will evolve over coming decades; the IEA even publishes a 143-page technical document showing how it builds its scenarios. Like so many other forms of climate data, these models become critical decision-making tools for government officials, investors and other stakeholders, including the fossil fuel industry itself. “They have significant weight,” says Grant. “They’re used a lot in the investment community to decide where we should be putting capital.”

The Trump administration is trying to pull every lever it can to help support its own narrative.

— Dave Jones, chief analyst at Ember Energy Research

Greenpeace’s Stewart points to the various scenarios developed by Suncor for investors back when it was more rhetorically engaged in energy transition debates. The energy giant’s 2022 ESG report talked about how it would adjust its capital investments based on high- or low-demand oil scenarios. “There was a section on how Suncor should change its business model depending on which scenario,” he says, noting that the company walked investors through both high- and low-carbon outlooks, as well as a business-as-usual version, to show their thinking about asset allocation. (Suncor didn’t respond to requests for an interview.)

The IEA’s use of the CPS assumes sluggish innovation in the clean-energy world, but all evidence points to the contrary. “CPS doesn’t reflect the reality of what is happening in terms of new technological deployment,” says Prince at Carbon Tracker. It’s a bit like someone in the 1950s imagining a long-range air pollution forecast that anticipates that leaded gasoline would always be the default vehicle fuel and that nothing like the 1963 Clean Air Act would ever become law. Indeed, CPS isn’t even a business-as-usual scenario; it’s more of a long look in the rear-view mirror at a world that is fast receding into the distance.

The IEA, which stresses that its scenarios aren’t forecasts, defends the reintroduction of the current policies scenario by arguing that as-yet-unforeseen constraints might drag on the current dynamic of change, such as “insufficient infrastructure, grid integration costs, a lack of institutional capacity or financing, or the absence of continued policy support.” As a result, its authors acknowledge, it projects a slower adoption of new technologies than recently seen.

The problem, as history has repeatedly shown, is that neither technological innovation nor economies of scale run in reverse, so CPS doesn’t even function as a bracing worst-case scenario. Stewart points out that Chinese-made solar panels now produce the cheapest energy on the planet, with extraordinary deployment rates, especially in Asia. (China is building an eight-gigawatt solar farm in inner Mongolia that will be 30 square kilometres larger than New York City.) Trump strong-armed constraints on U.S. renewables producers, even as the rest of the world’s nations beat a path to China’s doorstep to place their own mass orders for inexpensive panels and EVs. Such is economics: the evidence suggests that demand for renewables is growing, not slipping.

The bottom line is that the CPS may become the oil and gas sector’s aspirational anchor, a plausible version of the future that it can tout to fossil fuel investors. But the industry will eventually have to confront the implacable fact that it no longer produces a cost-competitive product, much less an environmentally friendly one – regardless of what the IEA’s dubious model envisions.

Jones at Ember Energy Research takes the wide view. The IEA’s decision to bring back CPS, he says, feeds into a broader push to put fossil fuels back to a place of energy primacy – a place the industry feared it had surrendered during the peak oil days. It’s about storytelling, not what’s actually going to happen, Jones observes. “The evidence is the Trump administration is trying to pull every lever it can to help support its own narrative.”

Like so many global institutions that have found themselves under siege from this president, the IEA may find its reputation as an honest information broker broken, which is a scenario no one wants to see.

John Lorinc is a journalist and author specializing in urban issues, business and culture.

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The Brazilian president’s forceful remarks at the outset of negotiations in the Amazonian city of Belém were meant to set the stage for a new chapter in international climate diplomacy. On the 10th anniversary of the Paris Agreement, the time had come, according to Lula, to stop arguing about what the historic agreement requires and instead focus on implementation – actually taking the steps required to both reduce greenhouse gas emissions and protect countries against the coming economic and public health consequences wrought by climate change.

In the same speech, Lula called for a “road map” for the world’s phaseout of fossil fuels. This was intended to make good on an international agreement made two years ago at COP28, when UN member countries reached consensus on the need to “transition away” from coal, oil and gas. The so-called UAE consensus, named for the host country of that year’s conference, marked the first time a blanket transition away from fossil fuels was ever officially mentioned in the Paris Agreement framework.

But the Brazilian delegation, which was responsible for overseeing COP30 negotiations and ultimately brokering a new deal, was confronted by a different truth than the president envisioned. The viability of the planet may come down to a few degrees Celsius of warming, but in Belém’s fluorescently lit negotiating rooms, everything ultimately came down to dollars and cents.

In the end, it may well have been a more honest COP than those that preceded it – just not in the way President Lula intended.

The most substantial new agreement negotiated at the conference reflected this realism. The delegations agreed that, by 2035, the world would triple international funding provided to help developing nations adapt to the consequences of a warmer world.

To many, however, the list of missed opportunities spoke louder than the victory on climate adaptation. Brazil’s proposed road map did not make the official ledger. Indeed, there were no new agreements to wind down fossil fuel use or curb deforestation. The latter omission appeared to be either an intentional accident or a diplomatic blunder: the COP presidency had put the new, controversial language on fossil fuels in the same sentence as the comparatively benign clause on halting deforestation, dooming it by association.

The Paris Agreement’s temperature targets, which aim to keep global warming “well below” 2°C and ideally below 1.5°C over preindustrial levels, remain as abstract as ever after COP30. A detailed plan to help nations meet emission-reduction goals that would comply with the Paris Agreement was axed from the final decision.

Just before the conference began, the UN put out its annual “emissions gap” report, which found that the world is on track for warming of between 2.3 and 2.8°C this century. The agreement made in Belém seems unlikely to change that math. Ten years after the Paris Agreement, its champions still have not found a way to get the world to live up to the landmark deal’s most famous goals.

This year’s summit took place at the edge of the Amazon, a symbolic decision meant to uplift the rainforest and the Indigenous Peoples who live in it. Though the conference was rocked by protests and demands for greater Indigenous participation and protections, a collegial air took root among the official negotiators for the first half of the two-week conference. With U.S. President Donald Trump thumbing his nose at the proceedings by refusing to send an official delegation, other world leaders were keen to prove that international progress on climate change could continue in the absence of U.S. cooperation.

Prior to Lula’s statements at the beginning of the negotiations, the expectation was that the discussions would largely focus on finding a path toward reducing deforestation, mobilizing US$1.3 trillion in climate financing that nations had agreed to during last year’s COP29, ensuring that worldwide decarbonization occurs in an equitable manner, and strengthening countries’ “nationally determined contributions,” or NDCs – national plans produced every five years that detail exactly how countries aim to meet the goals of the Paris Agreement.

As the conference stretched into its second and final week, momentum for Brazil’s fossil fuel transition road map seemed to grow, especially among Latin American countries, the United Kingdom and the European Union. André Aranha Corrêa do Lago, vice minister for climate, energy and environment at the Brazilian Ministry of Foreign Affairs and the official leader of COP30, rapidly got more than 90 nations to support putting a shift away from fossil fuels at the heart of the deal coming together in Belém. (The final agreements at each COP are adopted by consensus among negotiating parties, which include career diplomats, former ambassadors, environment ministers, and large teams of supporting staff for each country; the United Kingdom, for example, had about 70 people officially involved in their negotiations.)

On Tuesday of last week, when the first draft of the deal was released, the language was a more forceful commitment to a global energy transition than most attendees were expecting. The agreement – several pages of proposed commitments that do Lago termed the “Global Mutirão,” using a word belonging to the Tupian languages of South America that signifies collective work – included a line indicating that the agreement “decides to establish” a “Belém Roadmap to 1.5,” a reference to the most ambitious temperature target adopted at Paris in 2015. The word “decides” turned heads, as it suggested legally binding authority.

Brazil’s balancing act at COP30

“It would have been crazy,” said Felix Finkbeiner, founder of a conservation organization called Plant for the Planet who has been attending COPs since 2010. “Transitioning away from fossil fuels was set as a vague goal at COP28, but this would have been an actual process that initiated a massive step forward.”

Just days later, however, do Lago’s dream of making the first Amazonian COP a historic success was on the verge of falling apart. A new draft, published on the last official day of the conference, included no mention of a fossil fuel road map at all, triggering a flurry of new negotiations that stretched late into the night on Friday. Two cruise ships housing some 4,000 COP attendees, including many delegates, needed to depart on Saturday morning no matter what. A deal had to be struck.

As the conference stretched past its official ending time, the parties negotiating behind closed doors became increasingly frustrated with the lack of movement on the fossil fuel road map. The obstacles to success, said Peter Wittoeck, one of the negotiators for Belgium, were the same oil-rich countries that had been blocking more ambitious action on climate change at COPs for decades.

“The major pushback is coming from the Like-Minded Developing Countries and the Arab Group,” Wittoeck said, referring, in the former case, to a coalition of large emerging economies that includes China, India and South Africa, as well as a group of 20 Arab countries such as Saudi Arabia and the United Arab Emirates. Those nations, he said, “represent fossil fuel interests, obviously, and the fear of being limited in their economic development.”

The countries that had coalesced around the road map in the preceding days were enraged. “We are being silenced here,” said Irene Vélez Torres, director of the Colombian National Environmental Agency and one of the negotiators working on behalf of Colombia.

“I am saying it with a heavy heart, but what is now on the table is clearly no deal,” said European Union Climate Commissioner Wopke Hoekstra. But some developing nations, including those on the front lines of destructive climate impacts, said that agreeing to a road map away from fossil fuels would unfairly limit their economic growth. “Countries that have used all sources of energy in the last 200 years and have achieved the pinnacle of industrial growth and yet not stopped using all those sources of energy are telling us ‘stop growing,’” Aisha Humaira, the head of the delegation for Pakistan, told The Guardian.

At the height of the drama on Friday night, members of the European Union suggested they might have to walk out of negotiations over the road map. “It’s not possible to have less ambition than we had 10 years ago,” said Petr Hladík, environment minister for Czechia, outside the negotiating rooms. U.K. Energy Minister Edward Miliband called the process “painful, difficult, and frustrating.”

The European Union and the United Kingdom talked a big game, and Latin American countries like Colombia put up a fierce fight, but when the conference ended, new language on fossil fuels was nowhere to be found in the final document. The UN climate talks operate on consensus, and with the United States absent from negotiations, proponents of stronger language against fossil fuels faced a stronger, more organized bloc of countries, including two of the world’s largest economies in China and India, who also represent more than a third of the world’s population.

So what did survive the heated negotiations? To everyone’s surprise, the biggest agenda item to come out of COP30 was a plan for rich countries to help poorer nations strengthen themselves against the consequences of hurricanes, wildfires, droughts and other climate impacts – an idea that has long lingered around the edges of COP negotiations. But even that win didn’t come easy.

For years, one of the foundational planks of international climate negotiations has been the notion that the rich countries most responsible for causing climate change have a responsibility to help poorer developing countries prepare for problems that they have done comparatively little to cause. This preparation might include infrastructure projects like seawalls, levees, flood control measures, water preservation systems and home-hardening initiatives. The so-called Least Developed Countries, a negotiating bloc of nations including Bangladesh, Chad, Haiti and Tuvalu, call this “survival funding.”

But this financing, known as adaptation funding, has always taken a back seat to financing for mitigation, which is typically the work of building out renewable sources of energy. That’s generally because those who fund mitigation have a clearer path to earning a return on their investments than those who fund adaptation. In other words, it’s less obvious how to make money off of sea walls and flood control systems than it is from green energy.

Still, adaptation aid for developing nations is one of the pillars of the original Paris Agreement – not just a charitable notion. The European Union, Japan and other donor countries have a legal responsibility under the agreement to send money through this pipeline.

But how much money, how quickly it’s delivered and what kinds of projects it should fund has always been a matter of debate. This year, it stormed into the spotlight, and it’s not hard to see why. The consequences of climate change have begun to spill into plain view, and countries are starting to feel serious economic pressure as a result. Gallagher Re, a global reinsurance broker, estimates that the direct cost of natural perils around the world in 2024 totalled a staggering US$417 billion. Public and private insurance companies covered more than $150 billion of that, meaning the rest of the balance was covered by governments, policyholders, taxpayers and everyday people.

The Least Developed Countries and the Africa Group, a bloc of African nations, don’t always have the same set of priorities, despite having some of the same member countries. But a member of Kenya’s negotiating team, who spoke on the condition of anonymity given the ongoing nature of negotiations, told Grist that the two groups combined forces to push for more adaptation financing. That strategy apparently paid off. As the conference entered its frenzied final week, this mega-coalition of countries pushed the European Union, the United Kingdom and other developed countries to up their adaptation financing commitments.

European negotiators told Grist that the focus on adaptation put them in a tough spot. In the absence of a U.S. presence at COP, Europe has sought to position itself as the de facto global leader on climate action by trying to force the fossil fuel road map language into the final text. But its negotiators quickly found that the developing countries they were trying to align themselves with were laser-focused on adaptation financing.

“The situation now seems that we are not able to gather critical mass around the balance between high mitigation and being reasonable toward developing countries on adaptation,” Wittoeck said in the midst of negotiations.

But increased international aid is a tougher sell than it was even just a few years ago. Over the past several years, European leaders have been trying in vain to tamp down the slow creep of far-right parties in the union’s member states while simultaneously trying to salvage the European Green Deal, a plan to reach carbon neutrality by mid-century. Russia’s ongoing war with Ukraine has further complicated matters. The European Union and the United Kingdom recently repurposed climate resilience aid for military spending.

“The world has changed,” said Joe Thwaites, a senior advocate for international climate finance at the U.S.-based Natural Resources Defense Council. “They are feeling the political strain back home and are very sensitive to headlines about how much money is being spent internationally.”

The final deal on adaptation, reached in the early hours of Saturday morning, stated that developed nations must at least triple their adaptation financing by 2035. The language is either historically ambitious or epically subpar, depending on who you ask. A previous deal reached at COP26 in Glasgow dictated that adaptation finance would double by 2025 to US$40 billion per year, a number countries have not been able to reach. That deal expires this year, and members of the Africa Group and others hoped to include language in the text specifying that the tripling of adaptation funding should be based on that $40 billion number, meaning a new goal of $120 billion per year. Plus, they wanted the tripling to occur by 2030, not 2035.

The final version of the deal does not specify what the baseline number is, which means different countries might use different figures for their calculations. “I find it a bit vague,” the Kenya negotiator told Grist, adding that “the current needs are so huge that even the $120 billion is a drop in the ocean.” (The UN estimates that countries need as much as US$400 billion per year to properly respond to climate change.)

The COP of the truth cannot support an outcome that ignores science.

– Daniela Duran Gonzalez, Colombian Ministry of Environment and Sustainable Development

Still, the boost in adaptation funding was a welcome development for many countries at the conference. “This was our priority and we made it a red line,” said Evans Njewa, chair of the Least Developed Countries group.

With the fossil fuel road map off the table and a deal on adaptation financing inked, the exhausted COP boss do Lago affirmed the COP30 consensus agreement on Saturday afternoon to loud applause. But the final conference plenary was engulfed in drama again just moments later, when Colombia’s Daniela Durán González, head of international affairs for the Colombian Ministry of Environment and Sustainable Development, registered an objection. In his haste to end the conference, do Lago had inadvertently passed over a point of order raised by Colombia during the gavelling of the main agreement text. Gonzalez, and representatives of many other nations, wanted the final agreement to include language around fossil fuels.

“The COP of the truth cannot support an outcome that ignores science,” González said.

Do Lago had to pause the plenary to confer with Colombia and other nations. After 30 minutes of haggling, the parties came back to the table to finish the conference with an agreement to continue conversations in the future. Do Lago also promised to launch two road maps of his own, one aimed at phasing out fossil fuels and the other in service of ending deforestation. Those efforts will take place outside the binding authority of the Paris Agreement, however, and are essentially opt-in endeavours.

Nevertheless, do Lago’s promise to continue fighting for a fossil fuel phaseout, paired with an announcement that Colombia and The Netherlands will host a first-ever international conference on a fossil fuel phaseout in 2026, proves that the mitigation conversation soldiers on.

“Today was a good day for multilateralism; it was a mixed day for the climate,” Jennifer Morgan, a former climate envoy for Germany, told Grist.

“Clearly the decisions here don’t put us on track for 1.5, but they accelerate implementation,” she added. “Gosh, we have so much more work to do.”

Editor’s note: The Natural Resources Defense Council is an advertiser with Grist. Advertisers have no role in Grist’s editorial decisions.

This article originally appeared in Grist at grist.org/international/cop30-brazil-paris-agreement. It has been edited to conform with Corporate Knights style. Grist is a non-profit, independent media organization dedicated to telling stories of climate solutions and a just future. 

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But big questions remain. Does the alliance’s collapse open the gates for full-scale bank financing of fossil fuels? Or does it point to a lower-profile but possibly more effective financing path for the climate transition?

And what about bank regulation? Does the failure of this voluntary initiative validate what many non-governmental organizations have been saying for years; namely, that the banks should be compelled to invest in the climate transition through regulation?

These questions are now front and centre after the alliance – known as NZBA – closed last week, ending its existence as a membership organization and converting to an archive of banking-industry climate-target guidance.

NZBA was the flagship of the Glasgow Financial Alliance for Net Zero, former United Nations climate envoy Mark Carney’s high-profile effort to marshal the world’s largest financial institutions to reduce carbon emissions. When launched in 2021, NZBA and other financial industry networks pledged to reduce their carbon emissions to net-zero by 2050 and to align billions of dollars in assets to the climate transition.

But as banks were called upon to live up to their net-zero commitments through short-term reductions in fossil fuel lending and underwriting, many of the alliance’s leading members jumped ship. All the major United States and Canadian banks left NZBA earlier this year, followed by many European and Japanese lenders. With Carney now in the role of Canada’s prime minister, the alliance lost its key leader. Staving off anti-climate pressures and potential legal challenges in Europe, the remaining 140 NZBA members voted to formally close the organization.

“The end of the NZBA is a real loss,” writes David Carlin, a climate adviser to the financial sector. NZBA provided market signals, a community of practice and transition pathways on climate risk, Carlin argued in a blog post: “Those values do not disappear with the end of the alliance, but the collective ambition is weakened.”

‘Zombie targets’ possible

Todd Cort, sustainability lecturer with the Yale School of Management, said the banks could enter a protracted period of limbo in which they don’t drop net-zero targets, but neither will they work toward them. “What worries me is that I think there is a higher probability of zombie targets,” he told Trellis Briefing.

Collaborations such as ShareAction in Europe and the Shareholder Association for Research and Education in Canada will continue to exert shareholder pressure on banks to account for their emissions targets. Climate-dedicated investors such as New York City Pensions will continue to be key members of these coalitions. And jurisdictions like California have enacted climate legislation to provide at least some measure of accountability by banks and other companies through mandatory disclosure.

But Donald Trump’s overwhelming control of the public agenda rules out any meaningful measures to compel the banks in the United States to reduce fossil fuel lending and underwriting. This would suggest that the banks – particularly those in North America – are getting ready for years of full-throated support of coal, oil and gas. After two years of decline in fossil fuel financing, the global banking industry reversed course in 2024, sharply increasing fossil loans and underwriting.

The distressing prospect that banks could enter a period of long-term financing for fossil fuels – and the impact this would have on global warming – has triggered a debate among climate and sustainability activists and researchers. Some are doubling down on public action, mounting bank protests in the United States and Europe.

But RMI (formerly known as the Rocky Mountain Institute) is taking a different approach, calling for a “recalibration” in how climate campaigners and advocates relate to the banking industry.

Banks not ‘moral agents’

In a report issued only weeks before the NZBA closure, RMI argues that the non-profit climate movement has overestimated the power of the banking industry to unilaterally direct its capital to the climate transition. “Banks are not moral agents or policy substitutes,” the report states. “They are commercial actors operating within regulatory, fiduciary and risk-based constraints.” The report says some climate advocates don’t consider the “complex, interconnected spider webs” of the banks and the economies in which they operate. “The expectation that banks (or any part of the financial sector) could drive the energy transition was myopic.”

Banks and fossil fuel companies are drawn to one another partly because lenders can extend sizable loans to oil, gas and coal companies based on their healthy balance sheets. This enables banks to issue credit without committing large amounts of their own capital under lending regulations. By contrast, low-carbon projects such as renewable-energy facilities typically require project financing, representing greater regulatory and financial risk to the banks. In addition, private equity, asset managers and pension funds can provide ownership financing to these projects that is not an option for most banks.

Given such limitations, RMI argues that civil society organizations should shift their focus from confronting the banks on climate targets to engaging with them on specific low-carbon transactions, such as clean power, green steel, zero-carbon homes, methane abatement and renewable fuel projects.

“What we need now is less choreography and more closing of deals,” says Kaitlin Crouch-Hess, senior principle for RMI’s newly formed Center for Climate-Aligned Finance. “We can get capital flowing by recognizing banks’ commercial role and playing to their strengths,” she says in an email statement. “Where the economics do not add up, we must work across the financial, policy and corporate systems to align policy and risk-sharing.”

Fossil risk buffer needed

While RMI’s new approach is aimed at boosting the low-carbon economy, it doesn’t address the large climate risk posed by bank-financed fossil fuel projects.

Last month, sustainable investment advocate Finance Watch issued a report showing that the 60 largest banks in the world carry more than US$1.6 trillion in credit exposure to coal, oil and gas. Finance Watch argues that as the world electrifies and decarbonizes, this large fossil-industry exposure poses a major risk to the banks as the value of fossil assets supporting loans could decline sharply and suddenly. “Banks have more than a trillion dollars of exposure to mispriced fossil fuel assets,” Julia Symon, head of research and advocacy at Finance Watch, said in a statement. “This is a carbon bubble that could burst, like subprimes in 2008. This risk is not properly recognized and banks are not prepared.”

Finance Watch argues that the European Central Bank (ECB) should impose a climate risk buffer (a requirement that additional bank capital be set aside for fossil loans). Banks with more fossil fuel credit on their books would be required to maintain a larger capital reserve, shoring up their stability in the event of a crash in fossil assets. Finance Watch is urging the ECB to impose such a buffer as part of a current review by the central bank on risks to the financial system posed by environmental issues.

While it’s unlikely that the Trump administration would permit such a climate risk buffer to be imposed in the United States, it’s expected that financial regulators in other countries would follow ECB’s lead. Global adoption could also pave the ground for a similar measure in the United States after Trump’s term comes to an end.

The end of NZBA is not good news, but it shouldn’t signal an end to climate action by the banks. Advocacy organizations could engage with the banks on important decarbonization projects and policy supports while also challenging them to achieve their net-zero targets.

At the same time, financial regulators can send a clear signal to the banks that fossil fuel lending is risky. If banks choose to lend to the industry, regulators should ensure they’re going to have to commit more of their own money to do it.

Eugene Ellmen writes on sustainable business and finance. He is a former executive director of the Canadian Social Investment Organization (now the Responsible Investment Association).

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A big indicator of this altered sentiment is the changing fortunes of fossil-fuel and clean-energy exchange-traded funds (ETFs). As of August 15, the total return this year to date for the XOP oil and gas exploration ETF was -2.0% (it holds major positions in Exxon, Chevron and ConocoPhillips). By contrast, the iShares Global Clean Energy ETF (ICLN) returned 19.0% in the same period (First Solar, Vestas Wind and the utility Iberdrola are top holdings). The previous five-year returns were the opposite: 22.9% for XOP and -0.2% for ICLN.

Another significant sign of change comes from the top six United States banks. Financing for oil, gas and coal projects by this group fell to US$73 billion between January 1 and August 1, 25% lower than the same period in 2024, according to Bloomberg. The retreat is surprising since all of these banks recently withdrew from the Net-Zero Banking Alliance and sharply increased fossil fuel financing in 2024.

The last time there was an upswing in renewable-energy stocks and a decline in fossil fuel shares was in 2020, when the COVID crisis drove down oil prices and “Build Back Better” policies and low interest rates created a wave of renewable-energy optimism. This period came to an end with rising interest rates and a delay in U.S. clean energy programs that undermined projects, and the shift in attention to global security with the Ukraine war.

Now, market forces appear to be pushing banks and investors away from fossil fuels despite the politics of the Trump presidency. “These are not small adjustments,” energy consultant Michael Barnard wrote in a recent blog post. “They are meaningful changes in how capital is being allocated, and they are happening in the face of an administration that is telling the same banks to keep the money flowing.”

Reading the short-selling tea leaves

The reversal in fossil fuel funding is not confined to banks and energy stocks. Hedge funds have now shifted from long-term investment in fossil fuels to short-term selling. They are also shifting to long-term holdings in renewable-energy companies.

Most equity hedge funds were deeply invested in oil companies as recently as last summer. Last fall, that changed. Most shifted to short-selling positions on oil stocks in seven of the nine months between October and June, according to Bloomberg. This is a reversal of the situation that prevailed for most of the last four years, when the majority of hedge funds were in oil companies.

In short selling, investors profit on selling borrowed stocks at high prices by buying them back later at a lower price. That means hedge funds are betting that oil company shares will decline.

By contrast, hedge funds are shifting to long-term positions in renewables stocks. ​​The Bloomberg analysis shows that only 3% of hedge funds were short on solar stocks in June, the lowest percentage since April 2021.

Norwegian fund cuts holdings in oil majors

Some pension funds are also reducing their oil industry holdings. Norway’s government pension fund, the largest pension fund in the world, recently trimmed its position in Exxon from 1.46% of the company’s stock to 1.32%. It also cut its holding in Shell from 2.78% to 2.55%.

Banks and investors are responding to a sharp decline in oil prices in 2025, triggered by increased production from the Organization of the Petroleum Exporting Countries (OPEC) and the economic uncertainty of Trump’s global tariffs. Recent peace talks to end the Ukraine war have raised the possibility that Russian oil sanctions could be lifted, also depressing oil prices. Prices have fallen to about US$60 a barrel from US$100 a barrel in early 2022.

But the decline in oil prices is also part of a long-term energy transition. By 2030, oil demand is expected to plateau at 106 million barrels a day, less than the expected global production capacity of 115 million barrels a day, according to the International Energy Agency.

Long-term prospects for renewable-energy companies are looking good as additional generation will be needed for the explosion in data centres prompted by the progress of artificial intelligence, as well as growth in electric vehicles and home heating and industrial electrification. In a sign of this growing interest, Quebec pension manager Caisse de dépôt et placement du Québec bought Innergex Renewable Energy in a $10-billion deal in February.

The energy consulting firm Wood Mackenzie believes there is room for some oil majors to thrive over the long term. This is because companies like Exxon and Chevron can continue to pump their large low-cost reserves even as other oil and gas companies go into decline. “It’s less about growing – although some of that is still to come – and more about demand resilience,” the company said in a blog post.

Barnard says that if demand doesn’t fall as quickly as supply there could be shortages and price spikes. If demand and supply fall simultaneously, oil industry investment will wind down in an orderly way. “Either way, the direction of travel in private finance is set. Capital is leaving fossil fuels and moving toward the technologies and systems that will replace them.”

Barnard says the shift in financial industry support in favour of renewables is an act of “open defiance” of Trump, who wants the oil industry to pump more crude. “Wall Street is ignoring Trump not out of ideology but out of calculation. Banks are reading the market, listening to investors, and planning for a world where fossil fuels are no longer the safest bet.”

Eugene Ellmen writes on sustainable business and finance. He is a former executive director of the Canadian Social Investment Organization (now the Responsible Investment Association).

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An international campaign spearheaded by the Global Climate and Health Alliance (GCHA), called Break the Fossil Influence – Fossil-Free Health Communications, is adding more muscle to that scrutiny, by shunning the public relations firms that work with fossil fuel entities.

More than 30 organizations, representing the interests of more than 12 million health professionals around the world, have signed a commitment to no longer work with PR agencies that also provide services to the fossil fuel industry. They include Amref Health Africa, Médecins Sans Frontières, The Lancet, the International Federation of Medical Students’ Associations, the World Federation of Public Health Associations, the World Organization of Family Doctors and the Yale Center on Climate Change and Health.

Many in the fossil fuel industry have shamelessly greenwashed, even as they have sought to delay climate action – with lobbying, legal threats and massive ad campaigns.

– António Guterres, UN Secretary-General

“Fossil fuels are making people sick – and the companies behind them are spending millions on advertising and PR to cover it up,” Shweta Narayan, campaign lead at GCHA, said in a statement. “The same PR firms spreading fossil fuel disinformation are also working with health organizations – a clear conflict of interest for health.”

It’s not just physical health: a contingent of mental health professionals who wrote an open letter in support of the campaign noted that mental health is at stake too. Air pollution has been linked to anxiety, depression and psychosis, they wrote, especially for children and children of mothers exposed to particulate matter during pregnancy. A survey of 10,000 young people from 10 countries in 2021 found that nearly two-thirds are “very” or “extremely” worried about climate change.

“We see it every day: the quiet despair of displaced families, the anxiety of children growing up in a world on fire, the disorientation and grief communities face after floods, drought, and wildfires,” the authors of the letter write. “Climate anxiety is no longer a fear of what might happen – it is the emotional response to what is already happening.”

A global struggle for climate truth

The Fossil-Free Health Communications commitment led by GCHA echoes global efforts to chip away at climate misinformation by targeting those who are carrying it out. A 2024 report from Clean Creatives found that more than 500 advertising agencies had more than 1,000 contracts with fossil fuel companies in 2023 and 2024, including messaging giants such as Edelman, Dentsu and FleishmanHillard.

The 29th United Nations Climate Change Conference, COP29, held last November in petroleum-producing Azerbaijan, saw dozens of delegates from PR agencies roam its halls, including many of the same agencies that were singled out by the Clean Creatives list. Clean Creatives celebrated a more positive milestone in 2024, as more than 1,000 PR agencies pledged to divest from fossil fuels.

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A number of jurisdictions have tried to curtail fossil advertising with laws. In 2022, France became the first country to ban fossil fuel ads. In 2022, Sydney, Australia, banned coal, oil and gas advertising; in 2024, The Hague in the Netherlands became the first city to ban advertising for fossil fuels and carbon-intensive industries such as airlines and cruise ships. Amsterdam and Edinburgh have passed similar restrictions, although they are not legally binding. 

Doctors in Canada have mounted a similar campaign against fossil fuel advertising. Last winter Charlie Angus, a former member of Parliament, tabled a private member’s bill to prohibit misleading advertising by the oil and gas industry. It was met with furious backlash and did not receive a hearing in Parliament, however.

UN Secretary-General António Guterres has consistently sounded the alarm over the role of PR agencies in stalling more meaningful climate action for years. “Many in the fossil fuel industry have shamelessly greenwashed, even as they have sought to delay climate action – with lobbying, legal threats and massive ad campaigns,” Guterres said in a speech on World Environment Day in 2024. “They have been aided and abetted by advertising and PR companies – mad men fuelling the madness.”

Natalie Alcoba is a Buenos Aires–based journalist and senior editor at Corporate Knights.

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The convergence of this moment and your leadership gives us a rare chance to break free from the status quo. We cannot let this golden opportunity to make Canada a beacon for the world slip through our fingers. 

Like a championship hockey team, Team Canada Inc. has all the right ingredients – talent, capital and resources – to win big on the global stage. 

As Canada’s head coach, we’re counting on you to channel the wisdom and boldness of our hockey legends, making the tough calls so we can finally deliver on Sir Wilfrid Laurier’s century-old promise that the 20th century would be the century of Canada. That can be true for the century we’re in now, if we avoid getting stuck in the past with outdated technology. 

Where do we play? Fossil fuels are fading, even as their lobbyists grow louder, while clean industries — renewable energy, regenerative agriculture, clean AI, electrification and modular construction – are rising with unstoppable momentum.

In electro-economics, the more you build, the cheaper it gets; in petro-economics, the more you extract, the higher the cost. Do we invest in the future or cling to the past? Like the Great One, we need to skate to where the puck is going. 

Who do we play with? Will we keep relying on a single, increasingly unreliable trading partner for three-quarters of our exports? Or will we reach for opportunity by diversifying with traditional allies and markets like China and India, where nearly 40% of global growth will occur by 2050? It’s time for some bold deal-making to set up more productive games with our rivals in the spirit of Alan Eagleson’s 1972 hockey Summit Series between Canada and the Soviet Union. 

Who owns Team Canada Inc.? Do we settle for branch-plant status and domestic oligopolies, or do we become masters in our own house – with an inclusive wealth fund, stronger support for co-ops and employee ownership, and a strategy to scale Canadian champions? Denmark, with just six million people, is home to global leaders in cleantech, shipping, beer and pharma. We’re not too small or too poor – our AAA credit rating and $14 trillion in institutional capital say otherwise. Let’s play with our elbows up like the legendary Gordie Howe. 

How do we stop scoring on ourselves? Our slow-moving bureaucracy and risk aversion have stalled $89 billion in clean economy funds and cost us billions more in trade barriers, red tape, wildfires and fragmented energy systems. It’s time to move fast, break the right things and unite as one economy – not 13 – while ensuring that Indigenous communities have real equity in our future. We can’t afford to put Steve Smith (who scored the most infamous goal on his own net in the 1986 Smythe Division final) on the ice.  

How do we keep our skills sharp? Denmark invests 1.7% of GDP in active labour market policies – six times more than Canada – helping workers retool for the jobs of tomorrow. The Organisation for Economic Co-operation and Development puts us near the bottom of advanced economies. Are we ready to invest in our people and win, just as Scotty Bowman always did with his teams? 

Let’s seize this chance and play to win – because the 21st century can still be Canada’s century, if we have the courage to skate hard to where the puck is going, pass boldly and shoot for the stars.

Toby Heaps is co-founder and publisher of Corporate Knights. 

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On that day, Steyer changed, too. The company he’d founded, Farallon Capital, had long invested in fossil fuels. But Steyer realized climate change was “happening much faster than most of us imagined,” he wrote of the experience. He started speaking out, lobbied politicians and established a family foundation to support alternative systems, such as organic agriculture. Tom and his wife, Kathryn, also endowed the TomKat Center for Sustainable Energy at Stanford University, where young entrepreneurs are developing innovations such as hydrogen-fuel systems for heavy trucks, safer and more powerful lithium batteries, and fertilizers made of almond shells. 

In 2012, Steyer stepped down from Farallon. “I have a passion to push for what I believe is the right thing,” he told The Globe and Mail. Soon after, he founded NextGen America, a political action committee that mobilizes young people to vote. Steyer himself became the biggest donor in Democratic party history and helped convince Barack Obama to veto the northern section of the Keystone oil-sands pipeline. Disillusioned by politicians’ reluctance to act, he ran for president in 2020, promising to use executive power to enact a green new deal.

Steyer had little impact on the campaign and dropped out after focusing all his attention on delegates in South Carolina – who voted for Joe Biden. At that point, he might have vanished into the limbo that awaits most independent presidential candidates. But Steyer returned to his roots and founded Galvanize Climate Solutions, to use the power of finance to accelerate new climate technologies. The firm has raised more than US$1 billion. 

But Steyer still worries that Americans aren’t listening. Last year, he released a book, Cheaper, Faster, Better, that reframes this crisis as an opportunity. With renewable energy now cheaper than fossil fuels, he says, climate solutions aren’t just a last hope but our best bet. The journey to net-zero will give us cleaner air, more energy at a lower cost, better products for less money and improvements in just about every aspect of society, he writes. “It’s a fight we’re already starting to win.” 

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