A sharp rise globally in the ‘dirtiest’ fossil fuel investments is reversing the progress made after the Paris agreement. This is being put down to the Trump effect. Bank holdings in ‘extreme’ fossil fuels have shot up globally to $115 bn during his first year as US president.
Tar sands holdings have more than doubled in Trump’s first year in office. There has been an 11% hike in funding for tar sands, as well as Arctic and ultra-deepwater oil and coal.
US and Canadian banks led the race back into the unconventional energy sector following Trump’s promise to withdraw from Paris, with JPMorgan Chase increasing its coal funding by a factor of 21, and quadrupling its tar sands assets.
Chase’s $5.6bn surge in tar sands holdings added to nearly $47bn of gains for the industry last year, according to the report by NGOs including BankTrack, the Sierra Club and Rainforest Action Network (RAN).
RAN spokeswoman Alison Kirsch accused banks of “moving backwards in lockstep with their wrongheaded political leaders”.
JPMorgan Chase has asked the US securities and exchanges commission for support in its bid to block a shareholder resolution calling for a bank report on financial and climate risks associated with tar sands projects.
Royal Bank of Canada and Toronto Dominion remain the biggest tar sands backers, with $38bn of holdings between them. Kelly Martin, a campaign director at Sierra Club, said: “Tar sands and other fossil fuel projects threaten our climate, public health, and communities, and until they stop supporting them financially, major banks … are complicit in this destruction.”
The bulk of the new investments came in a doubling of loans and bonds to Canada’s government-backed tar sands industry. Bank funding for tar sands production and pipelines more than doubled last year – compared to the 2015-16 period, when then-US president Barack Obama nixed the Keystone pipeline project, which Trump subsequently reapproved.
Support for coal among the 36 banks surveyed was also up by 6% in 2017 after a 38% plunge in 2016. Large Chinese banks actually reduced these investments last year and in Europe, BNP Paribas and ING moved to limit their exposure to fossil fuel assets. However, 14 European banks collectively increased their coal financing by more than $2bn last year, with HSBC in the lead.