British banks funding climate change

Taken from a letter to the FT:

British banks urgently need to review their lending policies in the light of the climate change threat.

Given the present state of technology, investment in traditional coal-fired power stations is incompatible with a smooth and timely transition to a low carbon economy. On the contrary, new coal power stations without functioning carbon capture and storage built in from the outset will destroy any realistic prospect of meeting current UK CO2 emission reduction targets.

We are extremely concerned by recent loans made by British high street banks. During 2007, the Royal Bank of Scotland arranged around $1 billion for construction and operation of two US coal plants. RBS, HSBC and Barclays helped arrange almost $8 billion of loans for E.ON, the company behind plans for a new conventional coal plant at Kingsnorth.

In contrast, US banks last week released a set of “Carbon Principles”, increasing restrictions on loans to coal by recognizing the climate risks associated with financing such high emissions.

Given the climate threat that coal presents, and in the absence of carbon capture and storage as an existing and proven technology, we call on British banks to acknowledge the seriousness of climate change by announcing an immediate moratorium on all financing of traditional coal power plants, extraction and associated infrastructure.

Fay Mansell, Chair, National Federation of Women's Institutes
Benedict Southworth, Director, World Development Movement
Dr. Daleep Mukarji, Director, Christian Aid
Graham Wynne, Chief Executive, RSPB
Matthew Frost, Chief Executive, Tearfund
Ian Leggett, Director, People & Planet
Mika Minio-Paluello, PLATFORM