Kalasinga is a boda boda driver who earns a living by ferrying people and goods. Before he carries his first passenger, the 25-year-old stops at a gas station and pours $4.64 worth of fuel into his tank (all figures in U.S. dollars unless otherwise noted), money he earned the previous day. “On a bad day I spend up to 1,000 shillings [$7.70] on fuel, and with the current surging fuel prices, things are getting worse,” he says.

In April 2026, petrol and diesel prices in Kenya jumped sharply, hitting some of the highest levels in the country’s history. Based on recent reports from the Energy and Petroleum Regulatory Authority (EPRA), a Kenyan government agency, petrol was selling for between $1.52 and $1.59 per litre, and diesel was about the same. EPRA attributed the increase in local pump prices to the rising cost of imported petroleum products as a result of the Iran war. Kenya’s Ministry of Energy has since trimmed taxes, enabling prices to dip by a few cents. But this reduction has done little to improve the economic picture for many boda boda riders. “Things are usually bad, but even with the rising fuel prices, we cannot hike the fares we charge because we will lose clients,” Kalasinga explains.

Kalasinga’s story is echoed by hundreds of thousands of motorcycle riders across Kenya. Motorcycles have become the backbone of last-mile transport, supporting livelihoods, small businesses and urban mobility. But behind this economic engine lies a costly dependence on fossil fuels that is squeezing incomes and, in the process, locking riders into a cycle of poverty.

Kenyan boda boda riders spend up to 60% of their daily earnings on fuel, according to research by the asset-financing company Mogo. In Nairobi, where congestion forces riders to idle in traffic, fuel consumption is even higher.

“Fuel is our biggest enemy,” Kalasinga says. “You work the whole day, but at the end what remains is very little.”

The electric advantage

To improve their margins, boda boda drivers are turning to electrified transportation. The past few years have seen an increase in the number of electric motorcycles, especially among those providing taxi services. Data from Kenya’s transport sector show that total EV registrations rose from 65 in 2018 to 4,047 in 2023 across vehicle categories, including motorcycles.

Electric boda bodas have a clear advantage for drivers – lower fuel costs – while offering wider social benefits in the form of increased energy security and lowered pollution. In Nairobi, road transport is responsible for about 40% of fine particulate matter, which has been linked to respiratory illness, heart disease and premature deaths.

“[Electric vehicles] present environmental benefits because they produce zero tailpipe emissions and align with Kenya’s largely renewable electricity mix, which is over 90% green, driven by geothermal, hydro and wind,” explains Paul Mabonga, managing director of Sentimental Energy Ltd., a solar solutions company.

Drivers have doubts

But barriers have slowed the uptake of electric motorcycles. The high cost of batteries combined with lack of accessible and affordable charging infrastructure have prompted some riders to question the product. “There have been concerns about battery range, durability and service continuity affecting adoption, especially for those whose livelihoods rely on consistent daily uptime,” explains Winnie Miranyi, operations and research associate at Africa E-Mobility Alliance, an organization focused on accelerating the transition to electric and sustainable transport across Africa.

“Interest is there, but infrastructure is not,” says Joseph Mwangi, a Nairobi-based boda boda rider who last year abandoned his electric motorcycle and returned to a petrol-powered one. “Riders ask: Where will I charge? How long will it take? What happens if the battery fails?”

These are valid concerns. “Today, lack of accessible and affordable charging infrastructure is a major barrier to electric motorcycle adoption among boda boda riders in Kenya,” Mabonga says. “Most EV solutions target middle- and high-income consumers, leaving boda boda riders, who form the largest transport workforce, locked out.”

The rise of battery swapping

Spiro Kenya, an electric mobility company, believes it has a fix for poor charging infrastructure: battery swapping. Spiro offers a service where riders visit swap stations and exchange their batteries, keeping them on the road continuously. “Rather than waiting hours to charge, riders simply exchange a depleted battery for a fully charged one in under two minutes,” explains Raymond Robert Kitunga, deputy country head at Spiro Kenya.

According to Kitunga, a full charge costs approximately $2.23 if the battery is completely depleted. “If a rider swaps at 50%, they only pay half, about [$1.12],” he adds. Spiro’s battery-swapping service can save a rider roughly $23 compared to petrol over the course of a month, Kitunga says.

The model appears to be taking root. Currently, Spiro operates in 35 counties in Kenya, with more than 22,000 electric motorbikes on the road and more than 460 battery swap stations nationwide. Across Africa, the company has roughly 95,000 bikes.

Joel Musungu, a boda boda rider from Kimilili constituency, in the western part of Kenya, uses the service. He got his motorcycle in 2022 and hasn’t regretted it. “Now, I take home up to [$4.62] a day, compared to initially where I could only make a fraction of that.”

Not a panacea

There are certainly advantages, but there are also challenges. According to Miranyi with Africa E-Mobility Alliance, infrastructure availability and reliability continue to be a major barrier. The swap stations and charging points are largely confined to urban areas, she says. In Kimilili, a rural town, there is a single swapping station, for example. That can make for long queues, especially during blackouts or if the electrical grid is sluggish, Musungu explains.

It is a genuine challenge, Kitunga admits. The company has concentrated its infrastructure in urban areas, where the demand is highest. “Setting up a swapping station is capital-intensive. It involves both civil works [real estate] and electrical infrastructure, including coordination with partners like Kenya Power,” he explains. Spiro has also tried to address range anxiety through an app that shows users the availability and traffic of swap stations in real time. But the biggest challenges continue to be financing and affordability, according to Miranyi. “Although battery-swapping models help lower battery expenses, many riders still encounter difficulties in securing credit for the motorcycle itself, with prices remaining prohibitively high.”

Pauline Ongaji is an award-winning science journalist based in Nairobi, Kenya.

This story was jointly produced by Corporate Knights and The Energy Mix.

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The support, which included both direct lending and underwriting of bonds, shares and loans, was provided by 65 large banks worldwide, according to the annual Banking on Climate Chaos (BOCC) report published June 9. The report is considered the world’s most comprehensive annual assessment of publicly available data on fossil-fuel bank financing.

The report estimates that since 2016 – a year after the Paris Agreement on climate change was adopted – $8.7 trillion in fossil fuel financing has been extended by the banks (all figures in U.S. dollars). The report states if these trillions had been used to finance the renewable sector instead, the world energy system of today would be “more affordable, more resilient, more secure and more climate-proof.”

More than half the 2025 total – $508 billion – was for expansion projects, primarily in the United States. These included new oil and gas pipelines, liquefied natural gas facilities for gas exports to Europe and Asia, and gas-fired power plants for a flood of new data centres. Coal-fired power infrastructure was also expanded, largely in China. Expansion financing grew by 27% in 2025 compared with a year earlier.

While overall financing increased, it has also become more concentrated, with a larger share of financing coming from the top 12 banks. In 2025, they provided $474.3 billion to oil, gas and coal companies, nearly 40% of the global total.

In addition to locking in decades of new carbon dioxide emissions, this rapid expansion is having a ripple effect through the global economy. Growing levels of debt by natural gas distributors and pipeline companies are contributing to growing gas-fired power utility costs. These are being passed on to electricity customers, many of whom are low-income people least able to afford higher prices.

“The more debt these fossil-fuel firms have, the more profit they need to service that debt,” says Niko Lusiani, climate and energy research director for Rainforest Action Network, the lead organizer of the report. “This creates constant pressure for short-term returns to shareholders, which has impact on price volatility but also inflation in gas prices and utility prices.”

The report, now in its 17th edition, is compiled by Rainforest Action Network; BankTrack; the Center for Energy, Ecology, and Development; the Indigenous Environmental Network; Oil Change International; Reclaim Finance; the Sierra Club; and Urgewald.

Back to peak financing

The $906 billion in bank fossil-fuel financing in 2025 marks the second year it has increased since reaching a low of $727 billion in 2023. (Organizers restated estimates from last year’s report after adjusting some of the financing criteria last year.)

The 2025 figure is equal to the previous peak in 2021, which was triggered by the post-COVID energy demand recovery. Financing declined in 2022 and 2023, then rebounded in response to the continuing wars in Ukraine and the Middle East. Combined with the recent invasion of Iran and the oil bottleneck caused by the closure of the Strait of Hormuz, the world is now in the largest energy supply disruption in history, according to the International Energy Agency.

“We’re facing a new reality,” Lusiani  says in an interview. “Relying on fossil fuels for our primary energy source globally is no longer reliable, it’s no longer affordable, and it’s no longer actually secure.”

Clean-energy investment is growing faster than fossil fuels despite the rapid expansion in gas infrastructure. The International Energy Agency estimates that clean-energy investment will be $2.2 trillion in 2026, primarily for grids, renewables, storage, nuclear, low-emission fuels, energy efficiency and electrification. Investment in oil, gas and coal is forecast at half that, $1.2 trillion.

Twenty-six out of the 65 banks in the BOCC report appear to agree that fossil fuels are not as attractive as they once were and reduced their oil, gas and coal financing in 2025. These are primarily European banks, led by La Caixa Group, Commerzbank, Groupe BPCE, UBS and BNP Paribas. Canadian-based CIBC, Bank of Montreal and Toronto-Dominion Bank also reduced their oil and gas financing last year. La Banque Postale of France was notable for having zero fossil-fuel financing in 2025.

But the remaining 39 banks ramped up their financing last year. “When you have more of the decision-making happening in smaller circles, it is more prone to group think [and] continuing models that have long surpassed their usefulness,” Lusiani says.

JPMorganChase is top lender

The top fossil-fuel lender and underwriter in 2025 was JPMorganChase, the largest bank in the United States and the world’s largest non-Chinese-owned bank. The New York–based bank extended $58.2 billion in fossil-fuel financing in 2025, a 12.5% increase from 2024. The report estimates that last year JP MorganChase was responsible for 4.7% of global fossil-fuel bank financing, as tallied from about 2,000 banks around the world.

The bank maintains that fossil fuels will be a necessary part of the global energy mix for many years to come and that it has a responsibility to finance both fossil fuels and clean energy. “As one of the world’s largest financiers of energy, we support the full range of energy solutions and technologies, with a focus on reliability, affordability, security and long-term resilience,” a JPMorganChase spokesperson said in an email response to the BOCC report. “We believe our data reflects our activities more comprehensively and accurately than estimates by third parties.”

The bank has committed to financing $1 trillion by 2030 in climate initiatives and sustainable resource management, including low-carbon energy solutions. It issued $309 billion toward this goal between 2021 and 2024. JPMorganChase is also one of the few banks to agree, under pressure from shareholders, to publish its annual energy-supply financing ratio. As of 2024, that ratio was 1.13:1, meaning that for every $1 of fossil fuel financing it provided in 2025, it financed $1.13 in clean energy.

Still, Lusiani argues that JPMorganChase is at the heart of a relatively small number of banks – mostly based in the United States – that are at odds with the energy transition. “Over 4% of global bank fossil-fuel financing is done by JPMorganChase, so they’re the kingpin of what you would call a new oligopoly of fossil-fuel financing.”

The other major U.S. players in this oligopoly are No. 2-ranked Bank of America ($47.3 billion in 2025), No. 5-ranked Citigroup ($45.3 billion) and No. 6-ranked Wells Fargo ($42.5 billion). Japanese banks Mitsubishi UFJ Financial and Mizuho Financial came in at No. 3 ($47.0 billion) and No. 4 ($46.5 billion), respectively. The Royal Bank of Canada stood at No. 7, at $36.6 billion.

Are bailouts coming?

The expansion of fossil-fuel financing in 2025 came as the Net-Zero Banking Alliance closed its doors last year, shutting down the global coalition of banks working toward the industry’s net-zero transition. The BOCC report argues that the NZBA collapse and continued expansion of fossil-fuel financing in 2025 show the limitations of voluntary commitments as a route to meaningful climate action.

The report calls for bank regulators to require comprehensive disclosures and robust testing of climate risks, increased capital requirements for banks extending high-carbon-footprint loans and mandatory climate transition plans.

The banks are entering a period of rising risk, as high oil and gas prices push individuals, companies and countries to seek out cheaper renewable-energy alternatives. This poses a growing risk that the billions of dollars in oil, gas and coal infrastructure now being financed could become stranded assets.

For Lusiani, policymakers need to jump in, even if it seems to cut against the grain of current thinking in the United States and around the world to loosen climate regulation. The alternative could mean multibillion-dollar government bailouts of energy companies in the future, he says.

“The question is going to be: Where are all these massively indebted LNG and pipeline companies going to go, and how are they going to pay back that debt? I worry about public bailouts of some of these companies. They are so over their skis.”

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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But now, five years later, a family of Wyoming oil tycoons is bringing the Keystone concept back from the dead — and the Trump administration is signaling its support. Last week, President Trump signed a presidential permit for the so-called Bridger expansion pipeline, which would likely deliver oil from the carbon-intensive Alberta tar sands to a pipeline hub in central Wyoming, 647 miles away. From there, the oil could move through other pipelines to key refineries as far south as the Gulf of Mexico.

“Slightly different than the last administration,” Trump said ⁠at the White House last Thursday when he signed the presidential permit. “They wouldn’t sign a pipeline deal, and we have pipelines going up.”

The presidential permit gives the project the green light to transport oil across international borders, and it’s only the latest step in what appears to be a fast-tracked timeline for the revived tar sands pipeline. Last month, the federal Bureau of Land Management announced that it would begin conducting an environmental review of the project on an expedited schedule. (The Trump administration has shortened many of the environmental review processes required for pipeline construction.) Bridger Pipeline, the company behind the project, says it wants to begin construction next year and start moving oil in 2028.

The pipeline would carry at least 550,000 barrels of crude oil per day. That’s only about two-thirds of what Keystone XL would have carried, but it could expand to a peak capacity even larger than what was originally planned — more than 1 million barrels a day. The similarity between the new pipeline’s path and Keystone’s has led some opponents to call the successor “Keystone Light.” The Canadian portion of the new pipeline would be built by a company called South Bow, which was spun off from TC Energy, the company behind the original Keystone XL line.

The proposed pipeline would be one of the biggest new fossil fuel developments of Donald Trump’s second presidency. It comes at a time of growing oil production in Alberta and skyrocketing global crude prices due to the war the president is waging in Iran. The project is being pushed by the True family, a clan of oilmen with a long history of drilling in the Rockies — and a history of oil spills from pipelines across the region.

“We know that there is limited pipeline capacity to move Canadian crude oil, and we have extensive experience in the Rocky Mountains,” said Bill Salvin, a spokesperson for Bridger Pipeline, the True family pipeline company proposing the project.

The True business empire dates back to the 1940s, when a wildcatter named Henry Alphonso “Dave” True Jr. began exploring for oil in Wyoming. He and his three sons expanded their company into a network of almost a dozen corporations that includes a drilling company, a network of local oil pipelines, a trucking company, an oil trading company, an oil equipment company, a geothermal energy firm, and a real estate company called Brick & Bond, according to a Grist review of corporate records. They also invested in cattle ranching, becoming some of the state’s largest landowners. One of True’s sons, Diemer True, served for two decades in the Wyoming legislature.

This corporate expansion has given the four-generation True family outsize influence in a state that doesn’t produce much oil but neighbors the massive Bakken shale formation of North Dakota, which is served by some of the True family pipelines. The family name is synonymous with oil in Wyoming, and True family members have become prominent donors to the University of Wyoming and to a conservative legal foundation in the region. The Trues have also run afoul of the federal government: Several members of the family engaged in a 10-year dispute with the Internal Revenue Service over what the government said was a strategy to evade some taxes by shuttling ranchland purchases between different companies. (The case ended in a multimillion-dollar fine against the Trues, which was upheld by an appellate court in 2004.)

“They’re very prominent, and their business interests have spread all around the West,” said Phil Roberts, an emeritus professor of history at the University of Wyoming and an expert on the state’s oil industry. He noted that families like the Trues have shifted away from oil production as the state’s fields have declined, investing in pipelines and oilfield services to maintain their revenue.

“Those fields have gotten really worn out, so they’ve had to diversify,” said Roberts.

Tad True, the grandson of the True who first struck oil in Wyoming, has led the family’s pipeline business for most of this century, expanding its network to more than 4,000 miles across Wyoming, Montana, and North Dakota. He argued as early as 2006 that more pipeline development was needed in order for regional oil producers to remain competitive, and in a 2012 testimony before the House of Representatives he said that the Obama administration’s regulations were blocking the pipelines needed for the fracking boom that was then in full swing. True spoke at the Republican National Convention the same year, accusing Obama of “playing politics” with the Keystone XL pipeline, which the then-president had rejected the previous year. (While the pipeline was primarily intended to carry Canadian shale oil to American markets, it would also have included an “on ramp” for crude from True’s part of the country.)

True’s company, Bridger Pipeline, has a history of oil spills. In 2015, one of the pipelines it operated ruptured underneath the Yellowstone River after fast-moving waters eroded sediment and rock from the riverbed. At least 30,000 gallons of crude oil streamed into the river, contaminating the water supplies of Glendive, Montana. The town had to truck in bottles of drinking water after some residents noticed an odor in their tap water. Then, just a year later, another pipeline operated by one of the company’s subsidiaries leaked 600,000 gallons into a stream in North Dakota — almost enough oil to fill an Olympic-sized pool. Another pipeline broke several years later, dumping 45,000 gallons of oil onto ranchland in Wyoming. The company ultimately paid $1 million in fines to the Montana Department of Environmental Quality for the 2015 spill and $12.5 million for the 2016 spill.

In total, there have been at least 42 spills as a result of pipeline operations by True subsidiaries since 2010. According to data collected by the federal Pipeline and Hazardous Materials Safety Administration, more than a third of those spills had detrimental effects on the environment or people. The data shows that the Bridger Pipeline company alone is responsible for seven of those spills in just the last three years. The most recent spill took place in March near Guernsey, Wyoming.

“That definitely sets off some alarm bells,” said Kenneth Clarkson, communications director with the nonprofit Pipeline Safety Trust. “It’s not acceptable to have one incident, and when we have this quantity, it’s definitely troubling.”

If the expanded Bridger pipeline ultimately carries tar sands oil from Canada, as appears likely, the environmental consequences of a spill could be dire. Given the thick, viscous nature of tar sands, operators mix a type of thinner — called a “diluent” in technical parlance — to help it flow through pipelines. In the event of a rupture, the diluent can easily evaporate, leaving behind a heavy, tar-like substance that sinks to the bottom of rivers and other waterways. That particular property of tar sands made cleanup of the Kalamazoo River particularly complicated after a different company’s pipeline burst in southwestern Michigan in 2010.

“We regret any spill from our pipelines,” said Salvin, the Bridger spokesperson. “Anytime oil gets out of the line, that’s unacceptable to us, so we do everything possible to keep the oil in the line.” He said that Bridger will employ “horizontal drilling” to tunnel under rivers and streams, which he said would reduce the risk of ruptures. Salvin did not say what type of oil the pipeline would carry, but confirmed it would be engineered for “mostly heavy crude” from Alberta; the Canadian portion of the pipeline will begin in the town of Hardisty, in the heart of Alberta’s oil sands.

He also said the company would use advanced technology to monitor for leaks. In the aftermath of the 2015 spill, when North Dakota’s then-governor Doug Burgum challenged Tad True to prevent leaks, True created an artificial-intelligence software called Flowstate that analyzes pipelines for potential ruptures. Salvin said the company now uses the software on all its pipelines and markets it to other operators as well.

Even though the new proposed pipeline is similar to Keystone XL in length and size, it will only cost $2 billion, far less than Keystone’s $8 billion price tag. That’s because its route will largely follow existing infrastructure and rights-of-way established by True Companies pipelines. Salvin said that the company has held a dozen landowner meetings and has secured surveying easements, or allowances to scout the land for construction, from 374 of the 376 private landowners along the pipeline route. Unlike Keystone XL, the route does not cross any federally recognized tribal lands.

“We’re very familiar with what happened with the previous project,” said Salvin. “Given that we have existing pipeline corridors that we have access to, that’s one of the reasons why this makes such commercial sense to us.” Salvin declined to offer details about the financing of the project, and such details are not publicly available because Bridger is a privately held company.

The project must still secure a number of state and local permits, but so far it isn’t having any trouble with the Trump administration, which has been aggressive in supporting new oil and gas development. The line cuts through Montana and Wyoming, including public land overseen by the Bureau of Land Management, which is leading the federal government’s review of the project under the National Environmental Policy Act. Although the law typically requires the preparation of a detailed assessment of the project’s impact on wildlife and waterways, the bureau has suggested it might fast-track the pipeline’s review.

Past studies have found that it typically takes federal agencies more than two years to complete an environmental impact statement, but the Bureau has indicated in public filings that it intends to publish a final impact statement by next May and make a decision on the project, allowing the company to begin construction by July.

Though True family members do not appear to be particularly close allies of Trump himself, they have given more than $4 million to Republican candidates and political action committees since 1977, according to federal records. A combined $12,000 went to Trump’s unsuccessful reelection campaign in 2020, the only apparent record of True financial support for the president. Furthermore, six members of the True family appeared on a 2022 endorsement list for Liz Cheney, the Wyoming politician who lost her reelection bid after she voted to impeach Trump.

The business case for the new pipeline rests on a number of big assumptions. The existing pipelines from the tar sands are running near capacity, but the Bridger proposal assumes that production in Canada’s oil hub will continue to increase. Many forecasters aren’t so sure; even with prices high, current projections show that production growth is slowing and may peak in 2030 at around 3.5 million barrels a day, well under what the proponents of Keystone XL anticipated.

Second, the pipeline would only carry oil to central Wyoming, not all the way to the Nebraska refinery hub targeted by the original Keystone XL pipeline. Another company would need to build another pipeline across Nebraska in order for the crude to reach the major oil refineries on the Gulf Coast. (Salvin said Bridger is “exploring options” for that segment.) Third, it’s unclear if those refiners will even want as much of the heavy Canadian crude oil that the pipeline would offer, since imports of similar oil from Venezuela have started to tick up following Trump’s kidnapping of Venezuelan leader Nicolás Maduro and subsequent negotiations with the country’s new leadership.

“To call this plan half-baked would be an insult to baking,” wrote energy lawyer and anti-pipeline advocate Paul Blackburn in a blog post last month. Blackburn is an advisor to Bold Alliance, the activist network that opposed the last Keystone XL proposal.

Many of the same activist groups that opposed the prior pipeline are getting ready to oppose this one as well. The Bold Alliance, which organized tribes and rural landowners against Keystone, has said it will litigate any attempt to extend a pipeline into Nebraska. Jenny Harbine, a managing attorney with the nonprofit Earthjustice, said her group is “keeping a close eye” to ensure federal and state agencies adequately consider environmental and safety concerns. The Bureau of Land Management and the Montana Department of Environmental Quality, which is coordinating its review with that of the federal government, closed an initial public comment period last week.

This article originally appeared in Grist. Grist is a nonprofit, independent media organization dedicated to telling stories of climate solutions and a just future. Learn more at Grist.org

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As an industrial powerhouse, it has more recently turned into an example of Chinese green transformation, boasting the world’s first smart and zero-carbon port that is 100% electricity driven and green-energy backed. Onsite industrial-scale wind turbines and solar panels ensure renewable-energy self-sufficiency in the 10th-busiest port in the world, handling more than 20 million shipping containers annually.

It’s perhaps no wonder, then, that China chose to host last year’s summit of the Shanghai Cooperation Organization in Tianjin, on the banks of the Bohai Sea, in yet one more show of growing influence from Beijing. With twice the number of world leaders in attendance since the summit launch in 2001, from Russian President Vladimir Putin to Indian head of state Narendra Modi, Xi Jinping called for an end to the “Cold War mentality” that was triggering “turbulence and transformation” and called for “equal and orderly multipolarization” of the world that could pave the way to a “more just and equitable global governance system.”

The group pledged increased cooperation in energy, infrastructure, green industry, AI and innovation. These are the economic pillars of the present and the future that is being built. And they are the architecture for a new kind of cold war, one over our ecological future, propelled by a growing geopolitical rivalry between the giants of the 21st century.

Great power rivalry

In an article last year in Foreign Policy magazine, the influential historian and futurist Nils Gilman argued that the advent of the “ecological cold war” is upon us, driven by a struggle “over the metabolic basis of modern industrial society.”

“Call it a Green Entente vs an Axis of Petrostates,” he wrote on LinkedIn.

In the wider transition to a low-carbon economy, China needs no introduction. Its influence in the green transition – through supply chain routes and cheap hardware – is plain to see. It has installed more solar and wind than the rest of the world combined, the United Nations has said. Its capacity to drive down the cost of clean technologies has been a boon for reining in the growth of carbon emissions, giving vast swaths of the planet the tools to shift to renewables.

It has also played at least some role in the U.S. decision to retreat from climate policies, with a Trump administration that has made a U-turn to a fossil fuel agenda and adopted protectionist measures in an “America first” attempt to decouple from Chinese economic might. At the same time, the United States has signalled a sharp interest in ridding itself of dependency on China for critical minerals, which are not just key to green tech but intrinsic to military hardware. This year, Trump launched “Project Vault,” which includes loans for domestic mining and a bid to stockpile reserves.

Europe has responded to growing national backlash to climate policies by cooling them down and doubling down on its own protectionist measures. In the midst of all this, emerging economies that could help accelerate the energy transition are running up against roadblocks.

A piece of the green pie

While some observers take issue with Cold War framing, others are mapping out the ripple effects of these geopolitical tensions when it comes to the race to slow down planetary warming. “We are in the midst of a green cold war,” agrees economist Jorge Arbache, a professor at the University of Brasília. “The implications are that China, which is already leading, will probably lead even more because China will keep investing in green production.”

For Arbache, the heart of the struggle has to do with the amount of money that is at stake. Suffice to say, it’s a lot. One 2025 estimate from the Boston Consulting Group pegs the opportunities embedded in four key sectors – critical minerals, green tech manufacturing, green industrial material and green services – as US$11 trillion by 2040. “We are talking about an extremely big business agenda, and of course there is a competition in terms of who will eat what size of the cake,” Arbache says.

Although many developed countries are well positioned to participate in that agenda, it is also true that they do not necessarily have the key elements, such as critical minerals, available clean energy, carbon markets, abundant water and biodiversity. “Geography is back,” Arbache says. That means that developing economies that do have those assets could find themselves better positioned than before. “It gives those economies a bargaining power that they did not have very recently,” he says.

Chaos vs. foresight

But the name of the game, lately at least, has been chaos, driven by its number-one agent, U.S. President Donald Trump. “If I could sum it up, it’s better to govern chaos, because order is too costly,” observes Sabino Vaca Narvaja, a political scientist and former Argentine ambassador to China. “A fragmented society is easier to manipulate.”

China, of course, is steeped in contradiction, pouring money into coal projects, and facing accusations of human rights violations. It also has a different logic to its movements, Vaca Narvaja notes, one that bets on the long term. And so far, it has paid off.

The Chinese incursion into the green market was not about business at the outset, Arbache notes; it was about domestic security. Beijing registered, decades ago, the vulnerability it could face when it came to power supply. A desire to become energy self-sufficient shifted it into green-tech development, which has positioned it as a leader in renewables development. It now has a stranglehold on a huge chunk of the critical-minerals market, controlling 50% of global production and 87% of processing and refining.

China’s formula also relies on the rest of the world, Vaca Narvaja notes. It needs the world to buy its products. And it is. “China’s cleantech products are going basically everywhere in the world,” said Lauri Myllyvirta, non-resident senior fellow at the Asia Society Policy Institute’s China Climate Hub, in a conversation held last year on China’s climate path amid trade tensions.

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For all major cleantech products except batteries, “the Global South, broadly understood, has overtaken the old developed world as the larger destination,” Myllyvirta said. There are countries with impressive uptake in solar, such as Pakistan, South Africa and Middle Eastern countries, but it’s the broad-based nature of the boom that’s sending the biggest signal. “From one side, there is the cost competitiveness of Chinese supply, and from the other side, there is a massive diversity of drivers,” he said.

Electrification is everywhere. Cities are turning to electric buses. Drivers are turning to electric vehicles. Governments and individuals alike are turning to solar power in the Middle East and Africa. Clean-energy sectors continued to drive growth in China in 2025, doubling in value from 2022 to US$2.1 trillion – which is equal to the economies of Brazil or Canada, according to an analysis from the think tank Carbon Brief.

At the same time, a glut in solar panel production is leading to uncertainty. Beijing set its 2026 growth target between 4.5% and 5%, the lowest level in 35 years, noting a “grave and complex” landscape.

“I don’t think we will be talking about renewable energy the way we are if it wasn’t for what China has been able to accomplish in the last decade,” says Jai Asundi, executive director of the Center for Study of Science, Technology and Policy, in Bangalore, India. “Taking a technology that has been developed somewhere else, and driving the price down. A classic capitalistic efficiency market. That is, if you are more efficient in the way you use a resource, then the capital flows to you.”

Emerging economies demand protagonism

The flip side of that efficient flow of capital, of course, is that it can make it difficult for other economies to compete. Take a place like India, where attempts to jump-start domestic green-energy device production have stalled. “Energy prices are very high in India. So to produce something is already very costly. And some of these technologies are very energy intensive,” Asundi says.

India, which represents 17% of the world’s population, is a prescient case study for wide swaths of the world that are trying to shrink a yawning inequality gap by raising gross domestic product, without contributing to global warming. The developed world built its industrialized wealth at the expense of the environment. That is no longer an option.

“What we are struggling with is this notion of how we work as an ecosystem,” Asundi says. “How do we work as a global society as opposed to a country-driven society? Because after all, climate change is not a country phenomenon; it is a global phenomenon.”

Chen Yu, senior policy officer at the non-profit Global Witness, agrees. “U.S.–China competition may continue, and the global energy landscape seems to be becoming more regionalized and multipolar, but this does not necessarily mean inevitable confrontation,” she says. “The key question is whether competition preserves space for cooperation and allows for fairer rules and resource distribution, rather than creating exclusive blocs.”

Whatever the mix, what matters, she stresses, is that the process of reducing emissions is not delayed.

The rise of ‘powershoring’

Unfortunately, the current moves and countermoves of nations trying to bolster national economies, and respond to electorate demands, is proving detrimental. Arbache says there are alliances available now using today’s technology that could speed up decarbonization, but they are being squandered. The Brazilian economist, who is also the former vice president of the Development Bank of Latin America and the Caribbean, coined the term “powershoring” to describe the strategic relocation of energy-intensive industries to countries that have clean, abundant and secure energy. To produce one tonne of aluminum using coal-fired electricity results in 20 to 22 tonnes of carbon dioxide, Arbache says. But if you produce that same aluminum in Iceland, which runs on nearly 100% renewable power, the carbon output drops to 2 to 3.5 tonnes.

Countries like Brazil, Uruguay and Paraguay also offer abundant green grids for manufacturing. But they are not attracting as many powershoring projects as anticipated from places like Europe, Arbache says. “Although they need new allies and friends to solve their problems, they are still very skeptical because of this very notion of protectionism,” he says. “In the end, they are harming their own economies and they are also harming our economies.”

Canada’s balancing act

Canada, with three-quarters of its exports going to the United States, is also navigating tricky terrain. The shifting sands of Trump tariffs has led the government to overhaul how it approaches trade and put it in hot pursuit of new partners – or increasing the strength of existing ones.

Prime Minister Mark Carney said as much in his headline-grabbing speech at Davos this year, where he warned middle powers that if “we’re not at the table, we’re on the menu.” The phrase carried added weight because it came on the heels of an announcement to expand trade with China, and, crucially, allow at first up to 24,500 Chinese EVs annually into the Canadian market. Carney has since signed agreements with India to export uranium for its fleet of nuclear reactors, critical minerals, and oil and gas. The government also announced a split from the United States over auto policy, revitalizing incentives for EV production and purchase, and the intention of customizing new tailpipe emissions rules, rather than defaulting to the U.S. ones.

The divergence from U.S. policy is significant, says Rick Smith, president of the Canadian Climate Institute. “All we get from the Trump administration is this drumbeat that fossil fuels are the future. It’s very easy to let that overwhelm us as Canadians – to assume that that’s correct, and it’s not,” he says. “The actual economic opportunity is in decarbonization.”

While there are inherent challenges to decarbonization for an oil- and gas-producing country that other nations do not have, Smith says Canada is in a privileged position to move in on the booming battery market. “We’ve got all the elements of a very significant battery supply chain in Canada. And very few countries can say that,” he says. “In a grand contest between China and the United States, should we just be happy that China’s winning on the decarbonization front? No. We should also be getting our elbows up and trying to compete.”

Natalie Alcoba is a Buenos Aires-based journalist and senior editor of Corporate Knights.

The post The race for low-carbon energy is turning into a green cold war  appeared first on Corporate Knights.

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.

The post Trump to reimburse French energy giant $1 billion to cancel wind project, invest in fossil fuels appeared first on Corporate Knights.

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. 

The post Missed opportunities at COP30 overshadow win on climate adaptation appeared first on Corporate Knights.

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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