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by Miriam Ross
The UK’s new Energy Bill, to be scrutinised by a House of Lords committee next week, will do little to change the UK’s economy’s addiction to fossil fuels. London resident Miriam Ross reflects on living in the coal capital of the world....
The banks are not only responsible for the global financial crisis. They're also driving climate change
Visiting my grandparents at the age of six, I was fascinated by the coal cellar under their house and the big coal stove in the kitchen. I felt like I was stepping back into a different era, and I enjoyed the novelty of shovelling the black lumps into the coal scuttle and keeping the stove stoked.
That was in the early 1980s. Soon after, there were people collecting money on our local high street for striking miners. Most of the coal mines in the country were being closed down. I had the impression that coal was a thing of the past - an idea reinforced by a school trip to a former Midlothian colliery, closed in 1981 and turned into a museum.
Thirty years later, I've only moved a few hundred miles south. But I'm living in the coal capital of the world. None of my friends in London have coal fires. The air is clear of the domestic chimney smoke that caused the pea-souper fogs the city was once famous for. But the global coal industry is booming, and London is at the centre of it. We've just outsourced the dirty work to the other side of the world.
Last month I met Julio Gomez from La Guajira in Colombia, home to the biggest coal mine in Latin America. The Cerrejón mine spans 69,000 hectares of land in the territory of the indigenous Wayúu people, who share it with Afro-Colombian communities, local farmers and other indigenous peoples.
Cerrejón mine has wiped whole villages from the map, forcing people to leave their homes - including Julio's father. Having lost their land and their means of survival, many have long since migrated to the slums of the big cities. Those who have stayed face the effects of pollution from the mine.
‘The mining companies have submitted our people to contamination, to displacement, to plunder, and to what is almost slave labour for those who work for them,' says Julio. ‘We are being asphyxiated by the contamination caused by coal mining. The constant exposure to coal dust is clearly linked to the increase in cancer of the lungs, liver, brain, stomach, colon, neck of the uterus, and to genetic mutations.'
‘Since the start of the mine, at least ten peasant and Afro-Colombian communities have been destroyed and displaced, and at least 15 indigenous communities... We have lost many water sources, and we have lost more than 12,800 hectares of forest. The company has only replanted 2,000 hectares.'
In 2011, the Cerrejón coal company approved plans to expand the already massive mine and divert 26 kilometres of the Rancheria river. ‘The Rancheria is the only major river in the La Guajira region, which is also the driest region of Colombia', says Julio. Local people and mine workers joined together to form the ‘Committee for the Protection of the Rancheria River' to oppose the expansion. They are also demanding better conditions for the miners, and compensation for communities devastated by the mine.
Last November, the company shelved the expansion plans, citing a dip in the price of coal on the international market. But Julio and his friends, fearing the threat to the river will resurface once pressure has died down, want to see the plan permanently abandoned.
Almost all of the 32 million tonnes of coal mined every year from Cerrejón are exported, mostly to Europe and North America. Like the UK, many of the countries importing Cerrejón's coal have reduced their own coal production. But their appetite for coal and the energy it produces remains enormous - and much bigger than Colombia's.
The average Colombian's carbon footprint is less than a fifth of the average Brit, and 11 times less than the footprint of the average person in the USA. Compared to Brits and Americans, Colombians have done little to contribute to climate change.
Yet Colombians are already feeling the severe effects. Glaciers in the Colombian Andes have reduced by 82 per cent. And in 2010, hundreds of people were killed by flooding.
When the coal mined at Cerrejón each year is burned - outside Colombia - it emits more carbon dioxide than the entire country of Colombia does in a year. Colombians are dealing with both the devastating local effects of a huge coal mine, and the effects of a high carbon economy in northern countries, which the mine feeds.
So what has all this got to do with London?
Cerrejón is owned by three mining giants, Anglo-American, BHP Billiton and Xstrata, all of which are based in London. Shares in these three companies are worth over £100 billion on the London Stock Exchange - which means the UK's biggest financial institutions all have their fingers covered in Cerrejón coal dust.
Since 2009, Barclays, RBS and Lloyds have each lent £2.2 billion to the mining companies behind Cerrejón, and HSBC has lent £369 million. Each of these four banks has also helped the three mining firms make huge sums through bond issues. HSBC, for example, has helped them make £2.6 billion in this way since 2009.
The UK's biggest pension funds and ‘asset management' firms - companies that manage pension schemes - also pour billions into the three mining companies that own the Cerrejón mine. Blackrock Advisors (UK) owns shares worth a total of £7.7 billion in Anglo-American, BHP Billiton and Xstrata. Legal & General owns £3.3 billion in shares. Aviva has £712 million in shares and bond holdings, and Prudential has £659 million in shares.
The Cerrejón mine and the three London-listed mining companies that own it are not unique. All over the world, fossil fuel companies are using money from the UK finance sector to operate dirty coal, oil and gas projects that destroy local environments, violate human rights, and bring run-away climate change ever closer.
The banks are not only responsible for the global financial crisis. They're also driving climate change.
So what can be done to stem the City of London's appetite for coal, oil and gas?
The fact that so many of the banks, pension funds and other finance companies involved in fossil fuels are based in the UK means we can have some influence over the institutions to which we have entrusted our hard-earned money. But as consumers and even as shareholders, our power is limited. What we really need is government action.
The City loves fossil fuels too much to give them up without being forced to. The only way to stop the finance sector pouring billions into coal, oil and gas is to force it to change, by regulating its activities.
In October this year, new rules will make it compulsory for UK companies to make their carbon emissions public. But as they stand at the moment, the rules do not cover emissions from financed projects. So Barclays, RBS, Lloyds and HSBC will have to report on the carbon emissions from the lighting and heating in their UK offices - but they won't have to say anything about the massive emissions from projects like the Cerrejón coal mine.
The World Development Movement is calling on Vince Cable, the minister responsible for the new carbon reporting regulation, to fix this obvious loophole in the rules, to ensure that the banks have to come clean about their carbon emissions.
Greater transparency on the climate impact of the banks' investments would be a crucial first step towards reorienting our economy away from fossil fuels. But of course, transparency alone is not enough. Another proposal in the UK is to make the new Financial Conduct Authority set rigorous standards for the behaviour of companies listed on the London Stock Exchange, and delist those that continue to bankroll climate change and the destruction of communities. Various kinds of government intervention will be required to force the finance sector to change, and we need to open a debate on what will work to stem the flow of finance into fossil fuels and into projects that violate human rights.
Miriam Ross is a campaigner at the World Development Movement.
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