Church of England fossil free survey

The Church of England’s Ethical Investment Advisory Group (EIAG) is reviewing its advice on climate change for the Church’s national investing bodies. This would be a good opportunity for the Church of England to take a clear moral position on this issue and join other organisations divesting from fossil fuel companies. However we were disappointed to read their stakeholder survey, which is worded in such a way as to make it difficult to express support for action to be taken and contains leading questions against fossil fuel disinvestment. Operation Noah, have written a helpful blog on this and have the following advice to those wishing to respond (deadline is 18 December):

  • email eiag@churchofengland.org with your comments on the survey here. EIAG climate change review stakeholder survey OR
  • if you really want to fill in the online survey then make liberal use of the text boxes (but note the tick options have to be filled and make it very hard to express anything other than a particular response).

The Campaign against Climate Change's full response is set out below. If you want to find out more about the campaign for fossil free churches visit the Bright Now website.

 

Campaign against Climate Change EIAG survey response

The Campaign against Climate Change is grateful for the opportunity to submit a response to the EIAG’s consultation on investment strategy and carbon reduction. Although we understand the survey is aimed primarily at church stakeholders, we wish to ensure that the group understands the climate science which provides the rationale for fossil fuel disinvestment and feel that we can provide essential information.

We have not used the online survey form since one of the main points we wish to make is that several of the questions in this survey are deeply problematic in their wording and approach. We fear that this will skew the results towards rejection of fossil fuel disinvestment and low-carbon investment.

1. Should the Church of England’s national investing bodies manage their investments with a view to achieving the same reductions in greenhouse gas emissions (i.e. emissions associated with their investment portfolios) as the Shrinking the Footprint Programme is seeking to achieve for the Church's own emissions?

x No - the national investing bodies should reduce the emissions associated with their investments more quickly and/or more deeply than Shrinking the Footprint

This answer is given in the assumption that the investment portfolio has not so far been managed with carbon emissions reduction as a major priority, and therefore there are significant changes which can be made in the short-term (fossil fuel disinvestment, renewable investment) which can be done more quickly than, for example, improving the energy efficiency of Church buildings.

One of the key principles underlying any effective action to tackle climate change is that cuts in emissions now have a much greater impact than cuts later, because the latter have much less impact on the cumulative build-up of CO2 in the atmosphere. Delaying action greatly decreases our chances of avoiding catastrophic climate change.

2. Should the Church of England’s national investing bodies manage their investments to reduce their carbon footprint even if this means that they become unable to pay clergy pensions at agreed rates and to generate financial support for the Church at the levels previously enjoyed?

Please see responses to the following questions on why it is misleading to set up a false dichotomy between low-carbon investment and financial returns, and we are disappointed that this survey consistently does this.

IF there had to be a choice, however, investors should understand that climate change is the great moral issue of our age. It differs from, for example, slavery, by the fact that the human suffering it causes occurs well after the emissions that are responsible, and so the moral imperative is easier to avoid. However, we are not just talking about future decades. Many of the impacts can already start to be seen (an increased probability heatwaves and other ‘natural’ disasters and changes to agricultural viability in some of the poorest nations).

Climate change is also unusual in that there is such a limited window to prevent catastrophe. If we do not slow the accumulation of carbon dioxide in the atmosphere, and set in place alternative energy sources, future generations will not have the opportunity to reverse our inaction or prevent mass suffering and ecological destruction.

3. Should the Church of England’s national investing bodies disinvest (either now or by 2020) from all fossil fuel companies?

x Yes

The business model of these companies is based on burning fossil fuel reserves which must be left in the ground if we are to avoid catastrophic climate change. There is no way that this can be considered ‘ethical’.

4. Should the Church of England’s national investing bodies disinvest from all fossil fuel companies (either now or by 2020) if they expect that this would leave them unable to pay clergy pensions at agreed rates and unable to generate financial support for the Church at the levels previously enjoyed?

This question poses a false dichotomy between fossil fuel disinvestment and financial returns, since the former is not just a moral imperative, but the financially responsible option.

The valuation of fossil fuel companies is based on a dubious assumption: that they will be able to profit from burning the reserves they hold. This will only be possible if action is not taken to tackle climate change and governments are willing to set the world on a path to average global temperature rises of 4C, 6C or more, well beyond the ‘catastrophic’ scenario. While there may be doubt that governments will act with the speed necessary, current valuation of these companies is based on a gamble that they will not act at all.

This inflated valuation holds major risks for pension funds and other investors, and has been termed a ‘carbon bubble’. The key statistic is that between 60-80% of coal, oil and gas reserves of publicly listed companies are ‘unburnable’, and therefore worthless, if the world is to have a chance of not exceeding global warming of 2°C. We strongly recommend that the EIAG look in depth at the work of Carbon Tracker www.carbontracker.org, in particular ‘Unburnable carbon 2013: Wasted capital and stranded assets’ https://carbontracker.org/reports/unburnable-carbon-wasted-capital-and-stranded-assets/

As with other financial ‘bubbles’ there is a clear risk of a sudden crash. "The scale of 'listed' unburnable carbon revealed in this report is astonishing. This report makes it clear that 'business as usual' is not a viable option for the fossil fuel industry in the long term. [The market] is assuming it will get early warning, but my worry is that things often happen suddenly in the oil and gas sector." Paul Spedding, oil and gas analyst at HSBC. https://www.theguardian.com/environment/2013/apr/19/carbon-bubble-financial-crash-crisis

5. Should the Church of England’s national investing bodies invest in renewable energy?

x Yes

6. Should the Church of England’s national investing bodies invest in renewable energy if as a result they expect they would become unable to pay clergy pensions at agreed rates and to generate financial support for the Church at the levels previously enjoyed?

We are disappointed that again this question sets up a false dichotomy between renewable investment and financial returns. The ‘green economy’ in the UK has been one of the few success stories during the recession. “Over a third of the UK’s economic growth in 2011-12 is likely to have come from green business” (CBI, 2012, The colour of growth: maximising the potential of green business).

Although current government policies are not providing the impetus to green investment that might be wished for, renewable energy is clearly a technology of the future. Unlike fossil fuels, investments will be not be harmed by action to reduce carbon emissions, in fact the reverse. See 'Green Economy: A UK success story' https://green-alliance.org.uk/uploadedFiles/Publications/reports/British_success_story_Issuu.pdf

7. At the moment, in what order of priority would YOU put these issues? Please rank 1-6.

9. Do you agree with the following statement: “We should drop all other concerns to fight climate change”?

10. Do you agree with the following statement: “We need to fight climate change but the practicalities and the number of moral challenges in the world are such that there will have to be compromises along the way.”?

These questions are in our view extremely unhelpful. To tackle climate change is to address future poverty, hunger and homelessness, particularly in the most vulnerable countries. Climate change risks undoing progress towards higher living standards in these countries and is also a trigger for future conflict, for example over water resources. Defence establishments around the world increasingly see climate change as posing potentially serious threats to national and international security. http://www.ipsnews.net/2013/03/climate-change-now-seen-as-security-threat-worldwide/

At home, the best long-term approach to tackle fuel poverty is a shift to renewables (to reduce exposure to rising gas prices) and a comprehensive national home insulation programme. The transition to a low carbon economy has the potential to create jobs, as set out, for example in the Campaign against Climate Change report One Million Climate Jobs http://www.climate-change-jobs.org/sites/default/files/1MillionClimateJobs_2010.PDF

Respondents to the online survey are given no choice but to answer ‘yes’ or ‘no’ no matter how meaningless they find questions 9 and 10. The tick boxes cannot therefore be used as a reliable indicator of opinion.

11. When do you think the world economy will be entirely free of any requirement for fossil fuel-based energy?

This question is one that few non-specialists would feel confident in answering. It is in fact impossible to give a simple answer since it is entirely dependent on the extent to which we invest in renewable infrastructure and energy efficiency (home insulation, a switch to more sustainable forms of transport, etc.). We have right now the solar, wind, and tidal energy to meet our needs. What we don’t have is the infrastructure to harvest it. Political will (including the choices of investors) will determine the answer.

12. Which energy sources do you think the world will need in the decades ahead?

We are concerned that responses to this question, and the previous one, may be used to argue that it is morally acceptable to invest in fossil fuels because alternatives are not yet fully up and running. While fossil fuels may keep the lights on during the transition, every investment in infrastructure either takes us down the path to a renewables-powered future or locks us into catastrophic climate change. There is a clear moral choice.

13. Which do you think is more important: prevention of climate change or adaptation to climate change?

x Prevention of climate change

Prevention of climate change has to be the immediate priority. Adaptation to climate change will be essential, since continued warming of the planet and rising sea levels are inevitable from our past CO2 emissions. However, since our current emissions trajectory will send us rapidly beyond warming levels deemed ‘catastrophic’, our primary task must be to alter this trajectory. Because CO2 remains in the atmosphere and has a cumulative effect, we have a limited window of opportunity in which action to cut emissions can be effective. Tackling climate change is a moral imperative for this generation: for future generations it will be too late.

14. What do you think the world will end up doing more on: prevention of climate change or adaptation to climate change?

x Prevention of climate change

If this is not the case, and the emphasis is put on adaptation, we are in serious trouble. The impacts of a 4C average global temperature rise will be beyond adaptation. Sadly, there is a significant likelihood that our failure to act now to prevent catastrophic climate change will leave future generations overwhelmed by these impacts.

15. What level of temperature increase do you think we can live with?

The answers to this question may reveal the level of knowledge (or otherwise) about climate change among the respondents. However, we trust that decisions about church investment policy in relation to climate change will be informed by actual scientific knowledge about the impacts. New IPCC reports summarising  these are due in early 2014, but are not expected to fundamentally alter the conclusions of previous reports: we are in serious trouble if we do not take urgent action.

The majority of respondents may well select two degrees in answer to this question, since this is widely portrayed as a ‘safe limit’. This is misleading, however. The two degree limit seems to have been chosen rather because it was felt to be achievable, rather than because it would safeguard the world from any serious consequences of climate change. It has come to be even more lauded as a desirable goal because it is becoming increasingly unachievable, and we face even more alarming warming. The International Energy Agency warns that the path we are currently on is more likely to result in a temperature increase of between 3.6 °C and 5.3 °C. https://www.iea.org/weo/

So far, the planet has warmed around 0.8C, but the CO2 we have released commits us to significant further warming. If all greenhouse gas emissions stopped tomorrow, another 0.6C additional warming would be estimated to occur, taking us to a 1.4C rise in total. What is often overlooked is that a “2C rise in global temperature” refers to warming averaged across land and sea, and that some areas face more dramatic warming. Countries most at risk have pushed for 1.5C to be adopted as the target for international policies: https://www.theguardian.com/environment/2011/jun/01/christiana-figueres-climate-2c-rise

Looking at direct impacts of heat and rainfall changes only, with temperatures limited to 1.5C, an estimated 75 to 250 million people would be at risk from water shortages in just the next few decades, increasing the risk of crop failure in regions that are already drought-affected. With a 2C average temperature rise, severe and widespread droughts are expected in the next 30–90 years over many densely populated areas. At 4C, currently expected by the end of the century unless there is a step change in political action, the conditions of some of the most extraordinary heat waves experienced today will become the new norm and a completely new class of heat waves, with magnitudes never  experienced before, will occur regularly. Wheat production, for example, is likely to disappear from Africa by 2080, while millet yield in Sahelian Africa is projected to decrease by 40%.

Other impacts increasing in severity with increasing temperatures include mass flooding, with densely populated areas in South and South East Asia particularly affected and major dieback of humid tropical forests. The other effect of accumulated carbon dioxide in the atmosphere is that the oceans become more acid. This could devastate marine ecosystems, in particular coral reefs, with knock-on impacts for human food security.

(Predictions above drawn from Coumou and Schaefer (2012) Loss and Damage: Climate change today and under future scenarios http://loss-and-damage.net/4802)