Letters | With fossil fuels again spared at COP27, investors must step up pressure on Big Oil

Readers discuss the need to focus on the root cause of the climate crisis, and why Hong Kong should turn more to nuclear power

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UN secretary-general Antonio Guterres, Egyptian President Abdel Fattah al-Sisi and others attend the COP27 climate summit in Sharm el-Sheikh, Egypt, on November 7. Photo: Reuters

Published: 2:30pm, 2 Dec 2022

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For the 27th time, fossil fuel lobbyists – over 600 present in Sharm-el-Sheikh – and petrostates managed to get a crucial decision postponed: the displacement of fossil fuels by renewables. The burning of fossil fuels is predominantly responsible for the climate crisis.

With extreme heatwaves in Europe, flooding in Pakistan and droughts hitting American farmers, the impacts of climate change have been more visible this year. There is an urgent need to phase out all fossil fuels by shifting investments to renewables.

Persistent delay of this decision has enabled the climate crisis to wreak havoc in the Global South, which now rightfully demands a “loss and damage” fund. As a result, tackling the impacts of the climate crisis eclipsed tackling its root causes in Egypt.

However, tackling root causes is key to limiting even more devastating consequences. Therefore, paying reparations and investing in renewables should go hand in hand: the Global North should not only finance reconstruction, but also help developing countries leapfrog to renewables.

Big investors, like pension funds, need to consider the consequences of their investment decisions on their entire portfolio. Investors know the costs of runaway climate change will be eye-watering. According to reinsurer Swiss Re, rising temperatures could slash the global economy by as much as 14 per cent (about US$23 trillion a year) by 2050 if the world fails to rapidly phase out fossil fuels.

The climate crisis poses a systemic threat that could wipe out assets worth trillions of dollars; this would place many investors, like pension funds, at risk. Investors who regard themselves as “stewards of the global economy” are thus determined to limit global warming to 1.5 degrees Celsius.