Dr Jim Yong Kim, President of the World Bank, at the One Planet Climate Summit 12 December 2017 speaking to BBC World Service

Dr. Jim Yong Kim: Today we’re announcing we’re going to stop all upstream oil and gas operations. We’ve changed our position tremendously, we used to be a very large financier of fossil fuel projects. We’ve gotten out of coal completely. We believe that natural gas is still going to be a transition fuel for low and middle income countries. But we’re getting out of upstream and we think that the renewable industry is changing so quickly we may be able to get out of oil and gas altogether soon. And the only time we might do any kind of upstream gas is only in the poorest countries in the most desperate situations.

BBC: What’s led to this decision now?

Dr. Jim Yong Kim: The price of solar has gone down so much, the cost and size of batteries has gone down so much, we think that energy needs can be provided by other means and the science of this is just changing so quickly. We want to get out ahead and we don’t think that we want to be in the upstream oil and gas business any more.

BBC: Two years on, how would you assess where the world is at with the Paris Accord?

Dr. Jim Yong Kim: The Paris Accord was extremely important, but what happened was that afterwards we didn’t move quickly enough to put the deals in place. You know climate change is so complicated, there’s not a single actor that can do it, it’s a complex process that requires a lot of different players and we didn’t have particular settings where all those players were coming together to have a discussion. This is a major advance in that everybody is here, the financial community is here, the private sector companies are here, the United Nations is here, we have more than fifty heads of state or government here. We also have mayors and governors from all over the world that I think are the coalition that’s going to be required to really tackle climate change.

BBC: How much of an impact has President Trump’s decision to withdraw from the Accord made on the kinds of discussions that you’re going to be having?

Dr. Jim Yong Kim: The most remarkable thing for me is that there are so many American leaders in the climate change fight here. We have former mayor Michael Bloomberg, we have Bill Gates, Arnold Schwarzenegger is here, other leaders from cities and states are here, and so the presence of the United States is going to be felt very strongly.

BBC: Do you think then that it doesn’t matter that President Trump has said that the US will pull out?

Dr. Jim Yong Kim: Let me put it this way, one of the things that you realise when you work in a multilateral institution is that in the vast majority of the developing countries of the world there is no doubt among the people, among the leaders, that climate change is real. I can’t tell you how many African leaders have told me that the boot of climate change is on their necks. So coming here and gathering together leaders from all over the world, there’s a sense here that not only is it real but it’s accelerating and that we have to accelerate our action accordingly.

The World Tonight BBC Radio 4 December 12th 2017, reporting on the Climate Summit in Paris

Clip from United Nations Secretary General Antonio Guterres: Climate change is moving much faster than we are. Atmospheric levels of carbon dioxide are higher than they have been for eight hundred thousand years. We are in a war for the very existence of life on our planet as we know it. But we have an important ally: science and technology. And the message is simple. Those who fail to bet on a green economy will be living in a grey future. Continue investing in fossil fuels and you are investing in humanity’s own doom.

Clip from French President Emmanuel Macron: We do know that if we don’t change, if we don’t react, we will be responsible for billions of victims. I don’t want to be a leader in such a situation. So let’s act right now, let’s invest in green technologies. Let’s change our business model. Let’s behave differently.

Sean Ley, TWT presenter: AXA the French insurance company says it’s speeding up its disinvestment from companies which derive more than 30% of their revenue from coal. Dutch bank ING said it would have close to zero exposure by 2025. And the president of the World Bank Jim Yong Kim said it would no longer finance upstream oil and gas after 2019.

Sean Ley: What is the evidence, apart from the razamatazz of an event like this – what’s the evidence that this is shifting?

Anthony Hopley, CEO of Carbon Tracker: I picked up in your piece earlier, the speaker mentioned that there are two allies, science and technology. There’s actually a third ally and that’s finance. Because we’re in a paradigm shift where increasingly clean technology is out-competing, is financially more competitive than the incumbent fossil fuel technology.

Sean Ley: How’s that being achieved? Is that simply the consequence of taxing carbon?

Anthony Hopley: No, it’s because the technology is scaling up, it’s becoming better, it’s becoming cheaper. We did a piece on European coal which we published on Friday, called ‘Lignite of the Living Dead’, and we found through financial analysis that 54% of European coal-fired generation is currently operating at a loss, and the rest is marginal at best. In the US we did a piece a couple of months ago where we showed that 78% of US coal-fired generation is now having to be subsidised by the US consumer to the tune of around ten billion dollars a year, some US consumers they’re paying ten percent more to keep that coal going when they could have cheaper cleaner alternatives.

Sean Ley: The picture’s not so straightforward with oil and gas is it, why is that?

Anthony Hopley: Well, you know, on the one hand we’re not going to turn oil and gas off overnight, we’re talking about a 30-year transition to 2050. We will need some of that oil and gas. But we already have enough. Where the picture becomes clearer is opening up new oil and gas reserves and resources, increasingly even they don’t make financial sense. So the issue for the oil and gas companies I think is to accept they’ve lost their 100-year monopoly on energy generation, you know there’s a new game in town and they have to go ex-growth. That can still be a great business for them if they go ex-growth over the next 30 years, and we’ve done analysis which shows if they do that, if they go on a 2º pathway, counterintuitively they will actually be worth more to their shareholders.

Sean Ley: That 2º pathway is obviously very important in terms of the investors, because of meeting the Paris ambition in terms of restraining the change in temperature. What about though the big investors who look very broadly at their investment portfolio, sovereign wealth funds, hedge funds, are they shifting?

Anthony Hopley: The biggest sovereign wealth fund in the world, the Norwegian sovereign wealth fund, has already announced that it’s divesting from coal a number of years ago, and it recently announced that it is recommending to the parliament that it divests from oil and gas. They’ve said that’s for concentration reasons because obviously the country is heavily exposed to oil and gas, that’s where it gets a lot of its wealth from. But they wouldn’t be doing this if they did not believe that we were in a structural shift away from oil.

Sean Ley: One last observation – the International Energy Agency suggested that it’s going to take 3.5 trillion dollars of green investments every single year to meet that 2º target. At the moment it’s half of that. That’s quite a leap isn’t it?

Anthony Hopley: It is, but you’ve got to look at where we’ve come from and how much has been installed. And I think, you know, we are in a paradigm shift where increasingly the cleaner alternatives make more sense and they’re actually giving investors a better return. The danger is that we invest in the wrong things now and we create stranded assets which is why the World Bank’s decision in 2019 to stop funding oil and gas is so important. We’ve got to put that money in the right places. Now if it makes financial sense, which increasingly it does, you know there’s enough money in the world to finance that if the investors realise they’re going to get a good return on their investment, and increasingly they do.