Bankers, not Greta, will save the planet

I have observed before how useful really big numbers can be in response to crises: when US treasury secretary Hank Paulson unveiled his $700 billion Wall Street bailout package in 2008, an aide famously let slip that the number had been pulled out of the air because it sounded reassuringly huge. Now we’re told that more than 450 banks and investment firms representing $130 trillion of assets (that’s 40 per cent of global savings, give or take a few soaring bitcoins) have joined the Glasgow Financial Alliance for Net Zero led by Mark Carney and Michael Bloomberg, who tell us that ramping up clean energy fast enough to avoid the worst impacts of climate change will require new investment, mostly from the private sector, ‘likely in the ballpark of $100 trillion’.

So the $130 trillion already committed is bigger than the $100 trillion needed? And the City of London, rebranded by Rishi Sunak as ‘the world’s first net-zero financial centre’, is honing its celebrated innovation skills to lead us all to safety? Phew, that’s a relief — or perhaps not quite.

Cynics have pointed out that fossil-fuel industry delegates outnumbered any other mission to COP26 and that signatories to the groups which make up Carney’s alliance, having provided $4 trillion of funding for coal, oil and gas projects since 2015, are not barred from providing more. This year’s quadrupling of carbon energy prices also happens to have made those projects increasingly attractive to the sort of money that does not sign up to virtuous alliances at all. ‘Hedge funds flock to oil as energy shortages worsen’ was a recent Reuters headline, while US private equity firms continue quietly buying up the coal mines and coal-fired power plants that public citizens of the financial world are now embarrassed to own.

So should we expect as little impact from the finance piece of COP26 as from, say, the pledge to end deforestation — which seems only likely to happen if Brazilian and Indonesian loggers are literally bribed to stop? Again, perhaps not quite.