Latest news with #fossilfuels
Yahoo
an hour ago
- Business
- Yahoo
Banks reverse course, increase fossil fuel investments in 2024: report
This story was originally published on ESG Dive. To receive daily news and insights, subscribe to our free daily ESG Dive newsletter. The world's largest banks increased fossil fuel financing by $162.5 billion year-over-year in 2024, reversing course on decreasing investments in the sector — a trend they followed for the past two consecutive years — according to the latest Banking on Climate Chaos report released Tuesday. The release represents the 16th annual report documenting the largest banks' commitments to financing fossil fuels, with financing for fossil fuel expansion also increasing in 2024 in another reverse of trends. The report from the Rainforest Alliance Network, Sierra Club, Reclaim Finance and other climate organizations found that the 65 largest global banks committed $869 billion to fossil fuel companies in 2024, as 45 of the covered banks increased their year-over-year fossil fuel financing. The top four U.S. banks — JPMorgan Chase, Bank of America, Citi and Wells Fargo — represented 21% of total global fossil fuel financing accounted for in the report. RAN Senior Research Strategist Caleb Schwartz, one of the report's co-authors, called it a 'pretty significant year for the report given the reverse in trajectory. 'We're seeing a pretty substantial increase between 2023 and 2024, and we track these annual increases as an indicator of the banks' commitment,' Schwartz said in an interview with ESG Dive. 'Banks are putting money into fossil fuels, they're putting money into fossil fuel expansionism.' JPMorgan, Bank of America and Citi represented the top three financiers of fossil fuel expansion in 2024 and the top three financiers of fossil fuels overall last year, according to the report. The trio of U.S. banks also are three of the four banks who increased fossil fuel financing by more than $10 billion last year, along with British bank Barclays. U.S. banks contributed $289 trillion to fossil fuel financing in 2024, accounting for about one-third of the global financing covered in the report. The increased financing came as a number of large U.S. based banks departed from climate coalitions or otherwise walked back climate commitments. 'The retreat by U.S. banks from robust climate commitments is unacceptable, deeply irresponsible, and a clear capitulation to political pressure,' Sierra Club's Fossil-Free Finance Campaign Senior Strategist Jessye Waxman said in a June 17 release. 'Banks must shift away from risky financing and commit to reducing emissions via the companies they finance, with a genuine focus on helping to decarbonize the economy and support the urgent and necessary clean energy transition.' The report documents lending the 65 largest global banks made to 2,730 companies at the subsidiary level with fossil fuel businesses and 1,800 parent-level companies. The covered banks were given the opportunity to see and confirm their data before its publication, according to the researchers. RAN Policy Lead Allison Fajans-Turner, also a co-author of the report, told ESG Dive that despite banks adopting policies that prohibit project-level financing for fossil fuels, they often don't prohibit financing to the companies who own and develop such projects. She said that while the banks have said that funding is to help those companies prepare for the energy transition, 'third-party experts have looked at the transition plans that fossil fuel majors have penned and found that they are not credible.' 'Unfortunately, we're seeing banks put forward policies that have really large loopholes in them,' Fajans-Turner said in an interview. 'Either banks are not doing their due diligence to look into the credibility and the strength of the transition plans that their clients are presenting to them, or they have decided that they're going to lend to them anyways.' Recommended Reading Global banks have spent $6.9 trillion on fossil fuels since 2016: report Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 hours ago
- Business
- Yahoo
A forest the size of North America would be needed to offset Big Oil's reserves, study finds
The world would need to plant a forest the size of North America in order to offset planet-warming emissions from the 200 largest oil and gas companies, new research has found. A study published Thursday in the journal Communications Earth & Environment analyzed the economic and ecological benefits of planting trees as a means of balancing potential carbon dioxide emissions from the projected burning of oil reserves held by the fossil fuel industry. Many experts consider planting trees to be one of the best means of balancing CO2 because the plants absorb and store carbon that otherwise would enter the atmosphere and heat the planet. But researchers in England and France found that the tree-planting process, known as afforestation, faces insurmountable land use and financial challenges. "We have to be careful as a society to think that we can continue to burn fossil fuels and emit CO2 in a sort of business-as-usual scenario and just offset it later," said Nina Friggens, a research fellow in plant soil ecology at the University of Exeter and one of the study's authors. "The picture on that is increasingly looking very unviable." Read more: The planet is dangerously close to this climate threshold. Here's what 1.5°C really means The world's 200 largest fossil-fuel companies hold about 200 billion tons of carbon in their reserves, which would generate as much as 742 billion tons of CO2 if burned, according to the study. That's far more than the budget required to limit global warming to 2.7 degrees Fahrenheit, or 1.5 degrees Celsius — an internationally agreed-upon target intended to prevent the worst effects of climate change. The burning of fossil fuels represents about 90% of planet-warming emissions. Most experts and governments agree that rapid action is needed, including a combination of offsetting emissions and reducing them altogether. But, as the paper notes, "fossil-fuel companies currently face little incentive to reduce the extraction and use of fossil fuels, and regulatory measures to limit these activities have been slow to materialise." The researchers set out to calculate how much land area of afforestation would be needed to compensate for these emissions by 2050. The number they came up with was 9.5 million square miles of new trees — more land area than North America and part of South America. "That would displace all infrastructure, agriculture and preexisting habitats," Friggens said. "It's not something that we are at all suggesting that we do — it's just to illustrate the size of the problem." Read more: 2024 was the hottest year on record, NASA and NOAA confirm The economic viability of such a project for oil and gas companies is even less realistic. Most estimates suggest that afforestation is the "cheapest" means of offsetting carbon emissions — the international Organization for Economic Cooperation and Development estimates it will cost more than $14.5 per ton of carbon offset. At that rate, afforestation offsets would cost the 200 largest fossil fuel companies around $10.8 trillion — or roughly 11% of global GDP, according to the study. By comparison, the price of direct air capture — a newer field of technology that draws CO2 from the air and stores it underground or in industrial products — would be about $908 per ton, costing the companies $673.7 trillion, or about 700% of global GDP, according to the study. That said, even the more affordable afforestation approach would cause nearly all fossil fuel companies to lose value, according to the researchers — they referred to this as "negative net environmental valuation." The companies "would be worth less than what they would have to pay for their offsetting," said Alain Naef, an assistant professor of environmental economics at the ESSEC Business School in Paris and another of the study's authors. Lucy Hutyra, a distinguished professor of earth and environment at Boston University who was not involved in the study, said the paper is an "interesting thought experiment, underscoring the immense social and economic costs associated with burning fossil fuels." She said the economic findings are noteworthy, although nuanced, as monetary estimates of the economic damages that result from emitting CO2 into the atmosphere — sometimes referred to as "the social cost of carbon" — can fluctuate widely. She noted that the Trump administration recently ordered federal agencies to stop considering such damages when writing regulations, "effectively making it $0." "[The study] clearly supports the argument that these reserves are best left unexploited," Hutyra said. "However, the authors adopt a maximalist approach, assuming that all emissions must be offset solely through afforestation, which unsurprisingly leads to extreme land requirements. Afforestation alone is clearly insufficient to address this scale of the problem." Indeed, the researchers acknowledged that the study has limitations as it relies on broad assumptions, including that all existing fossil fuel reserves will be sold and burned. In addition, by focusing on afforestation, it does not account for other approaches that are central to tackling climate change, such as preventing deforestation and restoring existing forests. Read more: California decarbonization projects are among two dozen eliminated by Trump's Department of Energy Still, the findings come as the world moves further from its climate goals. Last year was Earth's hottest on record with a global average surface temperature about 1.46 degrees Celsius above the preindustrial baseline — closer than ever to the 1.5 degree threshold. What's more, the Trump administration has shifted the United States away from decarbonization efforts, including canceling funding for dozens of decarbonization projects in recent weeks and ramping up efforts to increase oil and gas production. President Trump in January also withdrew the U.S. from the Paris climate agreement, the treaty signed by about 200 nations from which the 1.5 degree Celsius goal stems. The researchers said their findings should not suggest afforestation and carbon offsetting are futile. "It can work — it can have valuable climate benefits, cultural benefits, social benefits, biodiversity benefits," Friggens said. Naef said carbon offsetting remains an important tool but cannot be used to compensate for all emissions. "While offsetting can be useful at the margin, the key change will not be offsetting — it will be a reduction of carbon emissions," he said. The main message from the paper, he added, is that "oil and gas should remain in the ground." This story originally appeared in Los Angeles Times.
Washington Post
6 hours ago
- Science
- Washington Post
Want to plant trees to offset fossil fuels? You'd need all of North and Central America, study finds
Planting trees has plenty of benefits, but this popular carbon-removal method alone can't possibly counteract the planet-warming emissions caused by the world's largest fossil-fuel companies. To do that, trees would have to cover the entire land mass of North and Central America, according to a study out Thursday. Many respected climate scientists and institutions say removing carbon emissions — not just reducing them — is essential to tackling climate change. And trees remove carbon simply by 'breathing.' But crunching the numbers, researchers found that the trees' collective ability to remove carbon through photosynthesis can't stand up to the potential emissions from the fossil fuel reserves of the 200 largest oil, gas and coal fuel companies — there's not enough available land on Earth to feasibly accomplish that.
The Independent
7 hours ago
- Science
- The Independent
Want to plant trees to offset fossil fuels? You'd need all of North and Central America, study finds
Planting trees has plenty of benefits, but this popular carbon-removal method alone can't possibly counteract the planet-warming emissions caused by the world's largest fossil-fuel companies. To do that, trees would have to cover the entire land mass of North and Central America, according to a study out Thursday. Many respected climate scientists and institutions say removing carbon emissions — not just reducing them — is essential to tackling climate change. And trees remove carbon simply by "breathing." But crunching the numbers, researchers found that the trees' collective ability to remove carbon through photosynthesis can't stand up to the potential emissions from the fossil fuel reserves of the 200 largest oil, gas and coal fuel companies — there's not enough available land on Earth to feasibly accomplish that. And even if there were, if those 200 companies had to pay for planting all those trees, it would cost $10.8 trillion, more than their entire combined market valuation of $7.01 trillion. The researchers also determined that the companies would be in the red if they were responsible for the social costs of the carbon in their reserves, which scientists compute around $185 per metric ton of carbon dioxide. 'The general public maybe understand offsetting to be a sort of magic eraser, and that's just not where we're at,' said Nina Friggens, a research fellow at the University of Exeter who co-authored the paper published in Communications Earth & Environment, a Nature Portfolio journal. Carbon offsetting essentially means investing in tree planting or other environmental projects to attempt to compensate for carbon emissions. Trees are one of the cheapest ways to do this because they naturally suck up planet-warming carbon. Fossil fuel corporations, along with other companies and institutions, have promoted tree-planting as key part of carbon offset programs in recent years. For example, TotalEnergies, a global energy company, said in a statement that it is 'investing heavily in carbon capture and storage (CCS) and nature-based solutions (NBS) projects.' To do their calculations, the researchers looked at the 200 largest holders of fossil fuel reserves — the fuel that companies promise shareholders they can extract in the future — and calculated how much carbon dioxide would be released if this fuel is burned. The researchers also focused solely on tree planting because the expense and technological development needed for other forms of carbon capture are still mostly cost-prohibitive. Forestry expert Éliane Ubalijoro, who was not involved with the research, called the study 'elegant.' It 'gives people a sense of proportion around carbon,' said Ubalijoro, CEO of CIFOR-ICRAF, an international forestry research center. But she cautioned against oversimplifying the equation by looking only at carbon capture, noting that tree planting done right can foster food security and biodiversity and protect communities from natural disasters. The paper effectively makes the point that it's financially impossible to offset enough carbon to compensate for future fossil fuel burning, said Daphne Yin, director of land policy at Carbon180, where her team advocates for U.S. policy support for land-based carbon removal. And the idea that companies would ever be required to account for the downstream emissions from the fossil fuel they extract is a 'fantasy,' she said. The idea of planting trees is appealing to the public and to politicians because it's tangible — people can literally see the carbon being incorporated into branches and leaves as a tree grows, Friggens said. But she says other methods shouldn't be overlooked — microbes underground store carbon too, but they can't be seen. And it's a physically and mathematically inescapable fact, illustrated in part by this study, that there's no getting around it — we have to stop emitting carbon, said Jonathan Foley, the executive director of Project Drawdown, who also was not part of the study. Carbon emissions are like an overflowing bathtub, he says: Before you start cleaning up, you have to turn off the water. 'Trees are the sponges and the mops we use to clean up the mess," he said. "But if the taps are still running and the water's pouring out over the edges of your bathtub, destroying your bathroom and your home, maybe you've got to learn to turn off the taps too.' ___ Follow Melina Walling on X @MelinaWalling and Bluesky @ ___ The Associated Press' climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at
Associated Press
7 hours ago
- Science
- Associated Press
Want to plant trees to offset fossil fuels? You'd need all of North and Central America, study finds
Planting trees has plenty of benefits, but this popular carbon-removal method alone can't possibly counteract the planet-warming emissions caused by the world's largest fossil-fuel companies. To do that, trees would have to cover the entire land mass of North and Central America, according to a study out Thursday. Many respected climate scientists and institutions say removing carbon emissions — not just reducing them — is essential to tackling climate change. And trees remove carbon simply by 'breathing.' But crunching the numbers, researchers found that the trees' collective ability to remove carbon through photosynthesis can't stand up to the potential emissions from the fossil fuel reserves of the 200 largest oil, gas and coal fuel companies — there's not enough available land on Earth to feasibly accomplish that. And even if there were, if those 200 companies had to pay for planting all those trees, it would cost $10.8 trillion, more than their entire combined market valuation of $7.01 trillion. The researchers also determined that the companies would be in the red if they were responsible for the social costs of the carbon in their reserves, which scientists compute around $185 per metric ton of carbon dioxide. 'The general public maybe understand offsetting to be a sort of magic eraser, and that's just not where we're at,' said Nina Friggens, a research fellow at the University of Exeter who co-authored the paper published in Communications Earth & Environment, a Nature Portfolio journal. Carbon offsetting essentially means investing in tree planting or other environmental projects to attempt to compensate for carbon emissions. Trees are one of the cheapest ways to do this because they naturally suck up planet-warming carbon. Fossil fuel corporations, along with other companies and institutions, have promoted tree-planting as key part of carbon offset programs in recent years. For example, TotalEnergies, a global energy company, said in a statement that it is 'investing heavily in carbon capture and storage (CCS) and nature-based solutions (NBS) projects.' To do their calculations, the researchers looked at the 200 largest holders of fossil fuel reserves — the fuel that companies promise shareholders they can extract in the future — and calculated how much carbon dioxide would be released if this fuel is burned. The researchers also focused solely on tree planting because the expense and technological development needed for other forms of carbon capture are still mostly cost-prohibitive. Forestry expert Éliane Ubalijoro, who was not involved with the research, called the study 'elegant.' It 'gives people a sense of proportion around carbon,' said Ubalijoro, CEO of CIFOR-ICRAF, an international forestry research center. But she cautioned against oversimplifying the equation by looking only at carbon capture, noting that tree planting done right can foster food security and biodiversity and protect communities from natural disasters. The paper effectively makes the point that it's financially impossible to offset enough carbon to compensate for future fossil fuel burning, said Daphne Yin, director of land policy at Carbon180, where her team advocates for U.S. policy support for land-based carbon removal. And the idea that companies would ever be required to account for the downstream emissions from the fossil fuel they extract is a 'fantasy,' she said. The idea of planting trees is appealing to the public and to politicians because it's tangible — people can literally see the carbon being incorporated into branches and leaves as a tree grows, Friggens said. But she says other methods shouldn't be overlooked — microbes underground store carbon too, but they can't be seen. And it's a physically and mathematically inescapable fact, illustrated in part by this study, that there's no getting around it — we have to stop emitting carbon, said Jonathan Foley, the executive director of Project Drawdown, who also was not part of the study. Carbon emissions are like an overflowing bathtub, he says: Before you start cleaning up, you have to turn off the water. 'Trees are the sponges and the mops we use to clean up the mess,' he said. 'But if the taps are still running and the water's pouring out over the edges of your bathtub, destroying your bathroom and your home, maybe you've got to learn to turn off the taps too.' ___ Follow Melina Walling on X @MelinaWalling and Bluesky @ ___ The Associated Press' climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP's standards for working with philanthropies, a list of supporters and funded coverage areas at
