Phasing out polluting assets: GFANZ must ensure real decarbonization

The statement evaluates a GFANZ report on the managed phaseout of high-emitting assets, agreeing with the necessity of early retirement of fossil fuel infrastructure to meet 1.5°C goals but warning against 'paper decarbonization' where assets are sold rather than shut down. It criticizes the report's dismissal of divestment and the suggestion of using carbon credits to finance retirements, which could negate emissions benefits.

• Existing fossil fuel infrastructure poses a significant threat to climate goals; CO2 from existing fossil power plants and other infrastructure would exceed the 1.5°C carbon budget by 30% if they operate for their full design lives, while emissions from existing and under-construction oil and gas fields and coal mines would be nearly double that budget.
• The document warns against 'paper decarbonization,' where financial institutions or companies reduce portfolio emissions by selling high-emitting assets to new owners rather than ensuring their actual shutdown. It asserts that GFANZ members often facilitate these deals as advisors, investors, bankers, and insurers.
• The author disputes the GFANZ paper's criticism of divestment, arguing that divestment, debanking, and deinsuring are necessary components of engagement, as engagement alone has proven insufficient to drive the GHG reductions needed by 2030 for 1.5°C alignment.
• The use of carbon credits to finance the early retirement of assets is identified as problematic because companies might use these credits as offsets for their own emissions, potentially neutralizing the climate benefit of the asset's retirement.

APA

Martin, L. (2022). Phasing out polluting assets: GFANZ must ensure real decarbonization. Reclaim Finance. https://reclaimfinance.org/site/en/2022/07/25/phasing-out-polluting-assets-gfanz-must-ensure-real-decarbonization/

Chicago

Martin, Léo. Phasing out polluting assets: GFANZ must ensure real decarbonization. Reclaim Finance, 2022. https://reclaimfinance.org/site/en/2022/07/25/phasing-out-polluting-assets-gfanz-must-ensure-real-decarbonization/.

Wikipedia

{{cite press release |last1=Martin |first1=Léo |title=Phasing out polluting assets: GFANZ must ensure real decarbonization |publisher=Reclaim Finance |date=25 July 2022 |url=https://reclaimfinance.org/site/en/2022/07/25/phasing-out-polluting-assets-gfanz-must-ensure-real-decarbonization/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{martin2022phasing, author = {Martin, Léo}, title = {{Phasing out polluting assets: GFANZ must ensure real decarbonization}}, publisher = {Reclaim Finance}, year = {2022}, month = jul, url = {https://reclaimfinance.org/site/en/2022/07/25/phasing-out-polluting-assets-gfanz-must-ensure-real-decarbonization/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }