
World's top banks pour $1.9T into fossil fuel financing since 2015 - tito
https://www.banktrack.org/article/banking_on_climate_change_fossil_fuel_finance_report_card_2019#_
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frenchman99
This is probably due in part to private investors asking their banks to invest
their money for them without regard to environmental issues.

Will you blame the postal office for delivering a bomb if it's properly
packaged ? Probably not. The same way, I feel it's stupid to blame the banks
for investing their customers' money where the yield is the largest when that
is specifically what the customers' expect.

Put huge taxes on fossil fuel investment worldwide or give tax breaks for
green investments, and money will go to greener areas. But governments don't
want that either.

~~~
consumer451
I really want a carbon tax especially on investment, it's the only solution to
the investment problem, isn't it?

But imagine the riots in France as the price of gas goes up.

I can also imagine the News Corp/Sinclair spin on it in the USA.

It has to be supplemented with other programs to take the load off of average
people. A really disproportionate percentage of the burden needs to be taken
on by investors. Doesn't it? What would that entire package look like?

~~~
whatshisface
> _A really disproportionate percentage of the burden needs to be taken on by
> investors._

Fifty four percent of equities are held by households and mutual funds. Add in
another 15% for pensions, and you arrive at roughly 70% of the stock market
belonging to people saving for retirement. Investors _are_ the "average
people."

Source:
[https://amp.businessinsider.com/images/54aff08969beddb2240a8...](https://amp.businessinsider.com/images/54aff08969beddb2240a8ce2-750-592.png)

~~~
BlueTemplar
I'm afraid that people able to save for retirement are less and less average
these days ?

~~~
whatshisface
This report says that 1 in 5 have saved less than $5000 for retirement, which
means that 4 in 5 have a substantial retirement investment. Although there is
a big problem brewing (1/5th of all Americans is a huge number of people),
those who would stand a lot to lose if something went wrong in the financial
world are still the majority.

[https://news.northwesternmutual.com/planning-and-
progress-20...](https://news.northwesternmutual.com/planning-and-
progress-2019)

~~~
danzig13
More than $5000 is not a substantial amount

~~~
whatshisface
Maybe not to someone who has a million dollars, but $10,000 to someone who has
$10,000 is 100% of their net worth. "People are not saving enough for
retirement" and "people would get significantly hurt if their retirement
savings were damaged" are not contradictory statements.

~~~
danzig13
Savings would not be significantly damaged if 1-1.5% in gains was missed on a
$10,000 on a fossil fuel divested portfolio. That might be a significant
overstatement of the differential.

Disclaimer: 1-1.5% would make a big difference over time

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titzer
By my calculation that is 234GW of nuclear power, or about half of US
electricity consumption.

[https://www.eia.gov/todayinenergy/detail.php?id=38572](https://www.eia.gov/todayinenergy/detail.php?id=38572)

[https://www.synapse-
energy.com/sites/default/files/SynapsePa...](https://www.synapse-
energy.com/sites/default/files/SynapsePaper.2008-07.0.Nuclear-Plant-
Construction-Costs.A0022_0.pdf)

------
moneytide1
The headline itself commands attention because it suggests a target to offload
blame upon amidst this ongoing climate change narrative. But how many of us
manage our own retirement fund (day-to-day)?

The 410(k) can exist and guarantee returns because of things like fossil fuel
financing. Over the past several generations, resources have been funneled
into railways, roads, extraction technologies, refineries, fleets, grids, etc.
This infrastructure has been established for some time now and continues to
grow, but perhaps at a reduced rate because emissions now appear to be a
threat. Sudden regulation to the end of the drastic reduction of fossil fuel
deployment is not compatible with the expected economic growth that has
established people's desires and standards for an idyllic life.

The surplus generated by the energy density, abundance, and accessibility of
fossil fuels is the reason the aging citizen can anticipate monthly pension
deposits or dividends sufficient enough to keep them well fed, housed,
traveling, and medically sound. It is a comfortable method of living out the
final years of a life spent participating in an economy that can now serve
them as a reward for their service to it.

The necessary large scale transistion to emissionless renewables interrupts
long term structured and predictable payment plans on the very grids and
refineries that have granted us financial security.

~~~
chris1993
Ethical investment funds do exist, and these explicitly don't invest in fossil
fuel industries. There are also ethical superannuation funds (in the
Australian context). Individuals can choose a direction for their investment.

~~~
moneytide1
Even if everyone drove an EV, a fossil fueled charging source would continue
to add to the problem. Solar/wind charging will likely be the case for
transportation batteries, but replacing the fossil with nuclear for heavy
industry could still grant us our healthy 401(k) payouts.

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giarc
Can anyone do back of napkin math on what $1.9T could buy in terms of
wind/solar energy? How many homes that could power?

~~~
tito
21,000 of Tesla’s huge battery system in Australia ($91M) [1]

[1] [https://www.theguardian.com/technology/2018/sep/27/south-
aus...](https://www.theguardian.com/technology/2018/sep/27/south-australias-
tesla-battery-on-track-to-make-back-a-third-of-cost-in-a-year)

edit: thanks for the math save!

~~~
tonyedgecombe
1,900,000,000,000 / 91,000,000 = 20,879

~~~
tito
nice save! holy crap that’s a lot of batteries.

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BlueTemplar
So that's ~$0.380 T$/y for "just" the "top banks".

To compare with IEA countries (excludes Russia, OPEC, China...) that spent
0.0189*(0.21+0.16)= 0.008 T$/y on energy efficiency and renewables...

[https://www.iea.org/statistics/rdd/](https://www.iea.org/statistics/rdd/)

~~~
navigatesol
R&D isn't the same as financing infrastructure..

~~~
BlueTemplar
Infrastructure is certainly part of development...

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woodandsteel
I think this is going to change radically in the next few years as the big
banks wake up to the stranded assets problem. In fact, from what I understand
it is already happening inside the banks, but hasn't worked its way up to
where the decisions happen.

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charliesharding
World's top lenders help finance the industry that powers the world? I know
we're supposed to grab our pitchforks but come on now.. 1.9T into wind and
solar would produce a fraction of the power output and they have obligations
to their clients

~~~
tito
Interesting to start with more of a null hypothesis here. What’s the
historical investment level? Does this amount actually reflects a complete
collapse of fossil investments?

BankTrak apparently has been doing these report cards for 10 years. Here’s the
2016 edition:
[https://www.banktrack.org/campaign/shorting_the_climate_2016...](https://www.banktrack.org/campaign/shorting_the_climate_2016_fossil_fuel_finance_report_card)

“ In just the past three years, these banks have sunk $42 billion for
companies active in coal mining; $154 billion for the 20 largest coal-fired
power producers; $306 billion for companies that drill extreme oil; and $282
billion for companies building liquefied natural gas export infrastructure.”

Sounds like a similar 3 year period, total is $0.78T tho. So...increasing?
Possible my assumption that these are comparable is wrong.

~~~
TeMPOraL
Reading a book on related issues right now, and it suggests that's what is to
be expected - the demand on energy is growing, but also the costs of acquiring
fossil fuels are growing _and_ infrastructure decay is catching up with the
industry. So no other choice but to run faster even just to stay in the same
place.

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Merrill
Probably mostly syndicated loans and bonds that the banks sell on to other
investors. I doubt that more than a small fraction of the loans are held by
the banks. So the more relevant question is who is holding the debt?

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mempko
$1.9T in financing (about $500 billion a year) plus $5T a year in government
subsidies worldwide.

Investment in fixing our ecological crisis and climate change is minuscule to
our investment in our destruction.

For example, US spends about $600 billion a year to subsidize the fossil fuel
industry which is $6T in 10 years.

For comparison, Elizabeth Warren wants to spend ONLY $2T in 10 years on
climate. Andrew Yang wants to spend ONLY $2.5T in 10 years. Bernie Sanders is
the only one serious about climate and wants to spend about $10T over ten
years.

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titzer
In other news, the Fermi Paradox has been solved.

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decoyworker
Imagine $1.9T investment into fusion?

~~~
tito
“Investment in nuclear power declined by nearly 45% last year to USD17
billion” in 2017 :(

[http://www.world-nuclear-news.org/NP-Investment-in-new-
nucle...](http://www.world-nuclear-news.org/NP-Investment-in-new-nuclear-
declines-to-five-year-low-1707185.html)

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GhettoMaestro
ITT: People have no concept of return on investment.

~~~
BlueTemplar
Funny that - has the last financial crisis shown us that these "top US banks"
(helped by the US government) had a good grasp on this concept or maybe the
opposite ?

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BlueTemplar
And a significant fraction of this goes into unconventional oil projects like
the US tight oil industry, which is likely NOT EVEN ENERGY POSITIVE,
considering that it has yet to turn a profit ! (Ditto for US ethanol.)

But driving your personal car is your god-given right, isn't it ?

