German leadership is critical to ending EIB support for fossil fuels
Ahead of the Eureopean Investment Bank annual meeting, Ban Ki-moon calls for Germany's federal goverment to spearhead the movement to end all fossil fuel lending after 2020. First published in Tagesspiegel.
Thirty years ago this month, German leaders took a series of bold decisions that changed the face of the world forever.
Faced with popular protests against an unsustainable political and economic model, politicians in both East and West Germany responded with energy and vision rather than sticking to the failed precepts of the past.
The fall of the Berlin Wall and the peaceful reunification of Germany had seemed unimaginable even a few months previously.
Yet the decisions taken by wise heads at that critical time meant they occurred without a shot being fired, and led to Germany taking a powerful role at the heart of Europe ever since.
The world has changed immeasurably since the heady days of 1989.
The Cold War has been consigned to the history books, while technology has transformed the way we live, work, communicate and do business.
But our world still faces existential challenges, and the greatest of those is climate change.
Today, Germany can again show leadership in Europe to end the use and financing of fossil fuels, not only domestically but across the world.
This is an essential step towards meeting the commitments of the Paris Agreement on climate change, and keeping global temperature rises below the critical 1.5 degrees Celsius threshold identified by the Intergovernmental Panel on Climate Change (IPCC) in 2018.
The European Investment Bank (EIB) has been debating for several months now whether to end all fossil fuel lending from the end of 2020.
It is encouraging that EIB President Werner Hoyer recognises the scale of the challenge and the need for urgent action, warning last month that “we have just over 10 years to turn the tide on the climate and environmental emergency”.
But without strong leadership from Germany, I fear it is unlikely that the bank’s board members will commit to the necessary tough action against fossil fuel financing at its upcoming board meeting.
There is a growing global consensus that coal can have no place in national energy strategies.
Chancellor Angela Merkel has recognised this by establishing the “Coal Exit Commission” and seeking to support a just transition for workers in former mining areas.
But a credible response to the climate crisis demands that a similarly robust approach is taken to the use and financing of natural gas and all other forms of fossil fuels.
The EIB needs to act decisively to end all support for fossil fuels, in all forms. Germany needs to be on the right side of the argument, showing leadership rather than encouraging any further procrastination.
Continuing investments in fossil fuel infrastructure would stand in direct contradiction of the EU’s goals to reach net zero emissions by 2050. It also makes little economic sense, with a growing consensus that non-renewable investments will quickly become stranded assets as the world moves away from a carbon-based economy.
The EIB already began restricting coal finance in 2013. Since then the World Bank Group has ended its finance to upstream oil and gas; the European Bank for Reconstruction and Development has ended finance to coal; and the Swedish Export Credit Corporation has announced it is going fully fossil-free. The EIB now has another chance to go one logical step further by unequivocally excluding all fossil fuels and inspire other multilateral financial institutions to follow its lead.
The world will only tackle the threat of climate change through multilateral endeavours. This means that Germany and other leading industrialised countries have a particular responsibility to lead by example, both at home and abroad.
Developing countries will understandably resent what they see as hypocrisy and even neo-colonial attitudes, with rich countries effectively exporting their carbon emissions and leaving those with fewer resources to count the cost in economic and environmental terms.
Next month, countries from all over the world will gather in Madrid for COP 25.
European leaders should use this as an opportunity to showcase both their progress at home and their actions on a global level to promote responsible investment and sustainable energy financing.
If Germany and other EIB board members do not rise to the challenge in November, it will send a truly dismal signal that will make it even harder to galvanise action on a global scale.
Back in the early 1970s, the great post-war German politician Willy Brandt said prophetically that “the future will not be shaped by those who remain stuck to the past.”
As a friend of Germany, I urge its leaders today to look to the future and take the tough but vital decisions to consign fossil fuels to the history books just as definitively as the rubble of the Berlin Wall.