The hollow climate finance of COP26

The summit was billed as the COP where the issue of climate finance would finally be resolved. In reality, Finance and Economy spokesperson MEP Molly Scott Cato writes, it was a ‘private finance jamboree’, focusing mostly on the greening of The City.

Climate finance tokens at COP26

UNFCCC_COP26_3Nov21_CivilSocietyActions_KiaraWorth-1 (CC BY-NC-SA 2.0)

Molly Scott Cato

Far from keeping 1.5 alive, the UK’s COP26 presidency priority seems to be keeping The City alive. The climate crisis is being sold as a profit-making opportunity, and financiers as the saviours we have been waiting for. 

The Glasgow climate negotiations were billed as the COP where the issue of climate finance would finally be resolved. And on the day dedicated to finance we certainly saw a wealth of new announcements, pledges, and acronyms.

First, there was Chancellor Rishi Sunak’s promise to make London the world’s first net-zero aligned financial centre; an announcement that rang a little hollow just days after his budget in which he failed to utter the word climate even once but did find time to cut taxes on aviation and for motorists.

So the Chancellor’s idea of greening the country doesn’t appear to extend far beyond the square mile of the City. His vision of the Emerald City reminded me of the Wizard of Oz where everybody wears green-tinted spectacles – this is a world in which we are supposed to embrace bonds as green even when they may include investments in fossil fuels.

Then we had Mark Carney bigging up the Glasgow Financial Alliance for Net Zero, ‘a wholesale rewiring of the global financial system so that every financial decision takes climate into account’. While greater transparency and clearer reporting of climate impacts are to be welcomed, the private finance jamboree seems to overlook the crucial fact that addressing the climate crisis cannot always be profitable; insulating the homes of British pensioners or protecting Bangladesh against further flooding isn’t likely to be lucrative.

The gap between public and private, between the Sunak of the budget and the Sunak of the COP, is a warning sign we shouldn’t ignore. It is a clue to which bits of the green agenda will be shared by us all and which will be privatised; which will be considered charity cases and which profit-making opportunities.

Follow the yellow brick road to Glasgow, and we find that what is meant to be a diplomatic process under the UN has become an opportunity for greenwash wizardry. The Blue Zone felt like the magic mountain at Davos, where Bill Gates flew in by private jet to tell us how to save the world from CO2 emissions, while Barack Obama was feted as a hero when he had used his presidency to block the necessary steps to address the climate crisis. Meanwhile, the outer Green Zone – boasting stalls such as Gaming for the Climate and eco-friendly Formula 1 – was nothing more than a trade fair sprinkled with green fairy dust.

But can finance save civilization and save our climate? When finance and the economic model it fuels have been driving us down the path of destruction, green economists like me are bound to be sceptical.

It seems clear that we will not get out of this climate chaos until we reject the gross injustices that characterize the global economy. Capitalism requires not only permanent growth but also the accumulation of value by a tiny minority who then use their wealth to indulge in energy-intensive lifestyles. Unless we address these fundamental issues of distribution and equity we are not going to solve the climate crisis, much less achieve global justice.

‘System change not climate change’ is an old slogan but one that is more useful now than ever. Protesters in Glasgow rightly posted ‘blah blah blah’ onto posters advertising electric cars, because shifting from petrol cars to EVs can’t solve the climate crisis. Instead, we need government investment in public transport and active travel. Neither can we change the system by snapping up land in the global south to allow Bill Gates to offset emissions from his private jet – wealthy countries must pay to repair the damage they have done to the Global South with their historic carbon emissions and centuries of exploitation.

This is why it is so disastrous that the UK has used its presidency of the COP to privatize the future green economy. They have focused on corporate spin, side deals and climate finance wheezes rather than the central diplomatic deal that would have saved the global climate.