Tag Archives: climate emergency

Ed Davey writes: Decarbonise capitalism to solve the climate emergency

An ambitious UK Climate Change plan can reduce 1% of global emissions – but the UK has the power to cut 15% of global emissions, by decarbonising capitalism.

The Committee on Climate Change has proposed a net zero carbon target by 2050 for the UK. This is the minimum we should do – within our own country.

Yet the UK plays a massive part in more than 15% of the world’s greenhouse gases – because the City of London finances the businesses responsible for those emissions. So we could make a more radical impact on climate change – if we chose to decarbonise capitalism here. And we could set a new gold standard for global climate action.

And frankly, it would be grossly hypocritical to ask the British people to change, if we then failed to force our banks and financial institutions to do likewise.

The good news is that across the City, many people get green finance. But it’s still not mainstream. We won’t be able to solve the climate emergency just by adding in a bit of green cash: we need a system change. A diet only works if you eat salad and give up the doughnuts.

Just look at the greenwash by the fossil fuel sector. There are just 100 fossil fuel firms who’ve been responsible for 70% of global emissions since 1988 – and they have allocated on average only 1.3% of their total capital expenditure on green energy. This is utterly reckless and totally out of step with a net zero goal.

To reverse this, Government has to say: London will become a capital of Green Finance, and you will no longer be able to fund the climate crisis here.

This will be hugely challenging. Today 20% of the value of the London Stock Exchange is invested in high carbon and fossil fuel firms. By implication 20% of any pension funds tracking the LSE are too. To protect the incomes of pensioners today and in the future, their savings need new profitable homes.

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