A move by Norway to rid itself of coal investments in its sovereign wealth fund has big implications, writes Simon Copland.
Last week the Norwegian Parliament formally endorsed moves to divest the country’s $900 billion dollar sovereign wealth fund from coal interests. The policy will result in the fund removing $8 billion from the coal industry.
While it didn’t necessarily make huge global headlines, this is potentially one of the biggest climate policy announcements in years. Whilst the $8 billion Norway is divesting may not add up to a huge amount for a massive global industry, it symbolises something very important: the slow death of the coal industry.
Over the past few years fossil fuels, and in particular coal, has been suffering significantly. Coal prices have dropped dramatically, with analysis showing that in the last five years, for every new coal plant that has come online, two have been delayed or scrapped all together. This is hitting coal mining too, with numerous coal mines closing in Australia recently. The situation has led many analysts to declare coal to be in a ‘structural decline’ — one it is likely never to recover from.
There are a number of reasons for this. Shifts in China in particular have caused major changes. A number of years ago China announced a cap on coal usage by 2020, a target It looks like they may have already reached years ahead of schedule. But it’s not just China. After his election new Indian Prime Minister Narendra Modi started cutting coal subsidies and increasing taxes, whilst in the United States President Barack Obama has circumvented the recalcitrant Congress to introduce his own limits on coal pollution.
These changes have not occurred in isolation. After the failure of campaigns to introduce carbon pricing in the United States and Australia, as well as the failure of the European carbon scheme to actually reduce emissions, over recent years climate activists have changed tact. Instead of focusing on abstract, neoliberal and often difficult understand carbon schemes, activists have gone to the source of the problem: fossil fuels.
This has taken a range of different methods. Originating in the United States the divestment movement has worked to deny the fossil fuel industry not only of the money they need to survive, but also their social license. Divestment campaigns have sprouted around the world, with large universities, cities, banks and investment funds agreeing to pull away their support for the fossil fuel industry. Notable divesters have included the cities of Seattle and San Francisco, Stanford and Glasgow Universities and even the Rockefeller Foundation.
On top of this campaigners are also upping the anti on new fossil fuel projects. The United States for example has seen a huge campaign to stop the construction of the Keystone XL tar sands pipeline, likely stopping the project’s construction in its entirety. Campaigns to stop Shell drilling the Arctic are growing more intense. In Australia community campaigners engaged in years of blockading of the Maules Creek Coal Mine, won a victory to close the Anglesea Coal Power Plant and Mine and are currently engaged in a huge battle to stop the Abbot Point Coal Port and associated Galilee Coal Mines.
These tactics are working. While the climate movement cannot claim all the credit for the decline of the coal and fossil fuel industry, these campaigns are clearly having an impact. The fact that the fossil fuel industry is heavily attacking the divestment movement highlights how scared they are.
This is where the Norwegian divestment is so important. Governments around the world are slowly picking up on the idea that the fossil fuel industry is bad for our climate — highlighted by the G7 announcement that they would phase out fossil fuel use by the end of the Century. While still too little, and too late, this has only been possible due to the leadership of these movements around the world. It has only been possible because of the leadership of smaller nations such as Norway.
The question now is, whether global Governments will finally catch up to this leadership, or whether it even matters. Whilst Government action remains important, as we limp toward the Paris climate talks, global negotiations are looking increasingly irrelevant. Communities around the world are stepping up, and the fossil fuel industry is suffering because of it. The question now is one of not if, but when, the industry will finally die.
Simon Copland is a freelance writer and climate campaigner. He is a regular columnist for the Sydney Star Observer and blogs at The Moonbat.