Mark Carney is the UN’s special envoy on climate action and finance and was the governor of the Bank of England from 2013 to 2020.
Judging by the way he is approaching climate finance communications, either he, or the rest of us, is insane.
Just before the recent COP26 started, Carney wrote the following for the FT:
Finance is a service, a means to an end. It helps people achieve their goals — whether buying a home, paying for their children’s education, expanding their businesses, or saving for their retirements. To these ends, financial institutions are disciplined by hard numbers: debit and credit, profit and loss, return on investment, value at risk.
He went on
Now people around the world are demanding sustainability in the face of the enormous climate challenge, and 192 governments have turned that somewhat amorphous goal into a specific objective — limiting global temperature increases to 1.5C above pre-industrial levels. This mission is also disciplined by numbers. Getting on track for 1.5C requires emissions to fall by 7.6 per cent every year throughout this decisive decade.
disciplined by numbers – remember that – surely Carney isn’t just plucking numbers from thin air?
He wouldn’t do that, would he?
More from Mark:
So where do we stand? Since the UK assumed the presidency of COP26 in partnership with Italy last year, countries’ net zero commitments have risen from covering one-fifth to over four-fifths of global emissions. That’s huge progress but it’s far from enough. Now we need ambitious climate policies by governments, aggressive climate actions by companies, and enormous financing from the mainstream financial system if we are to deliver on the numbers.
Why is he saying that net zero commitments now cover four fifths of global emissions? I see no time scale associated with his numbers. No list of who has and who hasn’t committed. Which sectors have and have not been included. Whether there is any way of verifying anything this serial technocrat is saying. And yet he refers to being disciplined by numbers. Oh dear.
What else do you have to say, Mr Carney?
That’s why our COP private finance strategy has devised 24 major initiatives to build a financial system in which every decision made takes climate change into account. To supercharge these reforms, the UN and the COP26 presidency have created the Glasgow Financial Alliance for Net Zero. GFANZ brings together the most ambitious firms in every sector of finance, from every continent.
This is not another well-meaning but vague commitment to sustainability. As much as we might wish, we can’t get to net zero by flipping a green switch. We need to re-wire our entire economies. GFANZ members don’t seek to be judged on style or by black box ESG ratings. They’re disciplined by the hard numbers of the shift to net zero. And they haven’t just committed to net zero financed emissions by 2050 at the latest. They also target their fair share of the 50 per cent reduction in greenhouse gas emissions that is needed by 2030 if we are to keep the world on track for 1.5C. They’re developing detailed reduction plans, and will report all the emissions of their borrowers and investee companies annually. Hard numbers for true sustainability.
Actual reporting sounds ambitious. Who will audit them? Will there be enforcement procedures against companies who fail to comply or whose numbers don’t stack up? I’m not hearing that.
To make all this add up, we must build a financial system entirely focused on net zero. That means defining best-practice, science-based transition plans for companies and financial institutions. It means robust assessments of the portfolios of financial institutions. It means developing approaches to wind down stranded assets — that could reach four-fifths of coal reserves and up to half of proven oil and gas reserves — transparently and responsibly.
So we’ll keep using coal, oil and gas then?
The financial imagination required to deploy green technology isn’t getting much of a mention.
And it means mobilising trillions of dollars of capital to finance decarbonisation in emerging and developing countries — a hitherto unimaginable number but without which real sustainability is not possible. Given the enormous resources of GFANZ, a radical new approach to mobilising private capital investment in emerging market and developing economies can be developed.
Specifically, we need a country platform for each nation to achieve its emissions reductions goals — including the phasing out of coal generation and other fossil fuels — by deploying a blend of public and private finance and technical assistance.
Ok so decarbonisation means investing in alternative technologies, right?
At Glasgow, look for specific proposals and financing commitments consistent with this approach, and remember that if something cannot quickly scale to $100bn a year, it is a soft number that will not change the climate.
Ok so ignore anything that can’t scale to $100bn a year. In what timescale, Mark? This is starting to sound gangster. The COP26 Massacre. Computer says no.
The imperative of a just green transition underscores the reality that finance never acts in isolation. Governments must back their net zero commitments with clear, credible, and concrete policies. Our alliance has set out what we believe are the necessary policies.
That’s the set up over with…
This includes carbon pricing, bans on internal combustion vehicles, national targets to phase out fossil fuel subsidies, and mandatory climate-related financial disclosures. The more these are implemented, the more finance will have the certainty and confidence to invest early, which will smooth the shift to zero carbon, drive growth and jobs upwards and help force emissions downwards.
Boom. You saw it here first.
The Carney Solution – Central Bank Green QE Handouts for Large Corporates.
All of this points to a final hard number: $100tn. This is the minimum amount of external finance needed for the sustainable energy drive over the next three decades if it is to be effective.
NO WONDER THE NUMBER IS SO BIG. MAKE IT BIG AND IMPOSE NO CONDITIONS OR OVERSIGHT.
Next week in Glasgow, look for who is part of the $100tn solution. Does it include your bank, insurer, mutual fund manager, or pension fund? Your money matters. In the months and years ahead, judge all financial institutions not by what they say but by their numbers: the total dollars of transition financing, the amount of polluting, the stranded assets retired, the emissions eliminated and the timelines to get to net zero.
Hard numbers in service of all people and our planet — that’s the real bottom line.
Are you part of the $100 trillion solution?
This is the question Carney wants you to ask. But it is the question he wants you to ask of yourself. You have to take your hat off. That’s deft programming of the Zombie class.
It seems unlikely that £100 trillion is lined up to fight climate change already.
God knows what Carney really means.
By putting no time scale on things he can up the hyperbole and play down the actual performance.
Here’s some more diagrams from the FT. Even they have backtracked on what they let Carney publish.
Who knows how much double accounting is included in Carney’s $100 trillion figure.
Back to the FT:
“The implication of this number is that finance is greening the world,” said one sceptical banker. The reality is that carbon transition will require huge state intervention and investment. The risk for GFANZ is that having overpromised, private finance will now under deliver.