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Radical proposals on carbon investments

August 28, 2021 11:20 AM

7js2 (Photo by Photography Account on Unsplash)We have regularly complained that whilst the government is great at announcing radical targets to cut carbon emissions when it comes to actually doing something there is mainly silence

In an interview with the Guardian newspaper our leader Ed Davey put forward some pretty radical ideas about what needs to be done. Recognising that the private sector out invests the state significantly in climate impacting investment he is proposing that new stock exchange listings of fossil fuel companies would be immediately banned on the London Stock Exchange. He would also stop new bonds being issued in London to finance oil, coal or gas exploration.

Fossil fuel firms already listed in the UK would then have two years to produce a coherent plan about how they would reach net zero emissions by 2045, or risk being struck off the LSE.

In the longer term, pension funds would have to disinvest from fossil fuels by 2035, with all companies with fossil fuel assets removed from the exchange by 2045.

"The reality is that no matter how much governments spend, it's going to be totally dwarfed by the amounts banks, private equity and hedge funds invest every day," Davey said.

"So if you're going to really take on climate change you've got to get that private capital to switch from dirty into clean. And this is a fundamental role for Britain in global leadership on climate change."

Huge amounts of fossil fuel financing still went through London, Davey said, pointing to mooted plans by the part-Chinese owned Neptune Energy for a £7bn initial public offering. The company has interests in oil and gas production projects in a number of locations, including Norway, in the North Sea off the UK and Netherlands, in Egypt and Algeria, and with offshore gas in Indonesia and Australia.

Davey said: "We have a chance to change that in the UK. We don't have to wait for anybody else to do it. And we would also show a leadership role to other financial centres. I think New York under President [Joe] Biden would have a real problem if the UK stole the march."

The plan, which would apply only to fossil fuels used for combustion, would in the end help savers and pension funds, he argued: "There's a massive lie being perpetrated by people in the City, these fossil fuel companies and the government. The lie is these investments are safe. They are not safe. If the City of London doesn't take this seriously, it's risking its own future."

You can read the full story here