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While You Were Sleeping: Nordic Leaders join Obama to end coal financing

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Coal-powered power stationCoal-powered power station

I was amazed a few months ago when US President Obama made a landmark speech on climate change, and announced that the US would virtually stop all public financing to coal overseas. I explain to friends and family that this is important because public financing is essentially the money of the people – and if we want leadership on climate change, that money should be put to good use.

Coal is the most polluting type of energy in the world. If we are going to tackle climate change, the world needs to stop funding coal power and start funding a fair transition to renewable energy and the world we want.

If I drew it on a napkin, you would see my hastily-drawn arrows showing that wealthier countries around the world put public money into international financial institutions (multi-lateral development banks). This money goes to less wealthy countries – and helps decide how and where energy is built in the world.

So, what difference does that make? Well, weeks later, the World Bank announced it would nearly eliminate coal financing. Then, the European Investment Bank followed. This week, all eyes are on the European Bank for Reconstruction & Development to do the same.

And now, five more countries have publicly joined the call to action. Last night in Stockholm, Obama met with the leaders of Denmark, Finland, Iceland, Norway and Sweden and agreed the following, via a full issued statement:

“As part of our commitment to accelerating the transition to low-carbon energy systems worldwide, the leaders of Denmark, Finland, Iceland, Norway, and Sweden will join the United States in ending public financing for new coal-fired power plants overseas, except in rare circumstances. We will work together to secure the support of other countries and multilateral development banks to adopt similar policies. The Nordic countries and the United States agreed to continue their work, in all appropriate channels, to reduce the use of domestic fossil fuel subsidies globally.”

What does it mean?

These countries will not put any public money into building new coal power infrastructure around the world. This is a major step in taking quick and effective action on climate change. We know that the balance of investments needs to shift from coal, oil and gas to renewable energy by 2017 to have the best chance at keeping climate change out of its most dangerous zones.

What now?

With leadership now seen from these countries, along with the World Bank and European Investment Bank, it is essential that other major institutions follow their lead. This week, WWF is calling on the European Bank for Reconstruction and Development to end coal financing and increase investment in sustainable, renewable energy. These added Nordic voices will be important to influence financial institutions to commit publicly to end coal investment and increase renewable energy investment.

The Norwegian sovereign wealth fund has investments in coal and oil with emissions equivalent to more than 108 times the emissions of Norway. WWF is now calling on the Norwegian sovereign wealth fund to move away from coal and tar sands financing and to allocate 5% of its portfolio to renewable energy. Countries like Sweden must make the same shift within their state pension funds (AP-fonderna), where a large majority of energy investments today also go to coal, oil and gas.

There is a global movement encouraging this major financial transition away from the most polluting forms of energy and towards sustainable alternatives. Yesterday’s public declaration provides a powerful signal that the time for change is now. It is changes like this that will move us towards a cleaner, safer world. It is amazing what can happen while you are sleeping.

Join WWF in calling financial institutions and leaders to change how they invest. Sign the pledge today.

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