Is Jersey really a leader in cutting carbon emissions?
The States has said that it is committed to lowering greenhouse gas emissions, and Jersey Electricity recently tweeted that Jersey has proven itself to be a leader in cutting carbon emissions but is this actually the case? Are we a committed leader? Or is government and business promoting a false impression of the Island’s role in climate change?
According to the States, Jersey’s greenhouse gas emissions have dropped by 40% since 1990, mainly due to switching to low-carbon French electricity generated from nuclear and hydro sources, yet the ‘ambitious’ target is to reduce emissions a further 80% by 2050 against the 1990 baseline. However, this is only one side of the story. When it comes to Jersey and carbon emissions, the public are not being given the full picture.
Your money invested in Global Warming?
A previous States of Jersey Freedom of Information request reveals the government Common Investment Fund (CIF) has direct holdings in the energy sector ‘in excess’ of 150 direct positions worldwide with a value of approximately £73.7m, but it states that they cannot segregate the investment proportions by fossil fuel extraction /production, nuclear energy and renewable energy so it’s difficult to get a clear picture at this time.
As the FOI states: ‘Energy companies are often involved in multiple sectors, for example BP, seen as a traditional oil extractor/producer, is also a significant investor in biofuels and wind farms.’ BP was indeed a leader in investing in renewables, that is, until they spilled oil all over the Gulf of Mexico leading them to drastically reduce its greener investments.
The FOI further confirms that the States holds indirect positions in energy companies through pooled investment vehicles and that the Public Employees Contributory Retirement Scheme has two direct holdings in energy companies that make up 0.3% of the fund.
When it comes to the CIF the States does confirm it has an ethical policy in place, confirming that the Treasury Minister pays ‘particular attention’ to areas such as ‘Environmental improvements and pollution control’. However, even contacting the States it’s been difficult to understand which energy companies the CIF invests in and the FOI argues it would be a ‘large logistical exercise requiring review of underlying accounts’ to retrieve further detail.
New York City has recently moved to divest its significant five pension funds, roughly $5 billion in fossil fuel investments, stating that safeguarding the retirement of its city’s police officers, teachers and firefighters is its top priority, believing that their financial future is “linked to the sustainability of the planet”. But that’s not all, City Mayor Bill De Blasio is expected to launch a lawsuit against five major oil companies seeking damages for the costs of infrastructure improvements to contend with the effects of climate change.
So if New York City can divest then why can’t we? Shouldn’t Jersey with its Common Investment Fund of tax payers funds divest from contributing towards further destruction of the planet? As Jersey’s Environment Minister Steve Luce has said:
“We’ve got to consider the carbon implications of the decisions we all make if Jersey is ultimately to be successful in playing its part in reducing global carbon emissions, and thereby avoiding the most serious consequences of climate change.”
Business as usual
Jersey also plays host to a number of fossil fuel and mining companies. For example, Genel Energy Plc is registered here and considers itself one of the largest independent oil producers on the London Stock Exchange. Its exploration and production operations are based in the Kurdistan region of Iraq. Established in 2011 when Tony Hayward’s Jersey incorporated investment company, Vallares Plc, did a ‘reverse acquisition’ of Turkish Genel Enerji making Hayward chief executive and later chairman.
Hayward was also the chief executive officer of BP during the April 2010 ‘Deepwater Horizon’ Gulf of Mexico oil spill. Infamous for initially stating that the spill would be “very very modest” and calling it “relatively tiny”. He later changed this position to describing it as an “environmental catastrophe” but still managed to attend the JP Morgan Asset Management Round the Island yacht race off the Isle of Wight. All the while, oil continued to spill into the Gulf of Mexico.
Another Jersey based oil company, Heritage Oil — owned by allegedly Jersey’s richest resident at the time — was set to acquire Genel Energy in 2009, but the deal fell through and Heritage Oil later ended up selling its Kurdistan assets to the Genel in 2012 to focus on Nigerian oil opportunities. Today Genel Energy Plc is struggling, with the current price of oil and exploration failures Tony Hayward is reportedly to be stepping down from the company.
Multinational mining, metals and petroleum company BHP Billington also has interests in Jersey through BHP Billington Services Jersey Limited. BHP Billington is reported by the Guardian to be number 20 in a list of companies in the world responsible for 71% of global carbon emissions. The list is taken from a report by environmental non-profit CDP in collaboration with the Climate Accountability Institute.
Major mining conglomerate, Glencore Plc, is also registered in Jersey and is listed as number 43 in companies in the world responsible for 71% of global carbon emissions. It is currently in the process of bidding for Rio Tinto’s last remaining coal mines, worth an estimated $1.5 billion and, according to the firm’s website, is able to produce as much as 10 million metric tons of coal a year from the Bowen Basin region of Queensland Australia.
Another Jersey registered company is Anglo Coal International Limited, a subsidiary of Anglo American. Listed as number 31 in companies responsible for 71% of global emissions, its website boasts that it’s the third largest exporter of metallurgical coal in the world with operations in Australia, Colombia and South Africa. According to Companies House, Anglo American Corporate Secretary Ltd is company secretary to another Jersey registered company Ammin Coal Holdings Ltd.
Coal is a major contributor to carbon emissions and also the primary source of dangerous mercury found in the fish we eat.
The recent Paradise Papers revealed that major oil firm Ithaca Energy was using Jersey in, according to tax experts consulted by the BBC, an ‘artificial structure’ that was designed to ‘funnel profits’ into Canada. The structure enabled it to finance the purchase of the oil platform and pay for the required modifications using a series of inter-company loans to the Jersey companies.
Jersey also appears to be playing its part in the fracking industry, Kerogen Investments №18 Limited, Ineos Jersey Limited and Ineos Investments (Jersey) Limited are all registered here in the Island. Ineos, and investment firm Kerogen Capital, are reported to be behind the companies and licenses that are fracking in the UK. The fracking process is said to generate high emissions, pollute the water table and cause earth tremors, like the two minor ones ‘triggered by fracking near Blackpool in 2011’.
Then there’s Jersey Oil and Gas Plc, which is currently ‘actively’ pursuing production in the North Sea with 6–10 fields and a net production of around 10,000 barrels per day. The above examples do not even cover the numerous finance firms based in Jersey that provide access and investment to major carbon emissions producing companies or the more obscure Jersey registered companies where it’s difficult to understand who the actual owners and controllers are due to the information not being publicly available.
It’s easy to say we are cutting carbon emissions and a leader because we choose to ignore the major carbon emission producing oil, gas and coal companies that benefit from using Jersey’s ‘tax neutral’ status. Maybe it’s about time we asked what Jersey’s real contribution to global carbon emissions is, and whether we are helping or hindering the transitioning away from fossil fuels that keeping to below the necessary 2°C upper limit requires.
Climate change is happening here and now
2017 is now recorded as the hottest year on record without the short-term warming of an El Niño event, and by a wide margin (0.17°C). According to NOAA data it was also the third-hottest year on record since 1880, slightly less hotter than 2015 which did have a strong El Niño event.
Although at this stage we can’t know whether climate change was responsible for recent Storm Eleanor and the strong winter winds experienced here, it does represent a warning of our future. As a taster of things to come, Jersey saw gales, flooding, felled trees, a balcony being ripped off a house, a section of St Aubin’s Bay sea wall being knocked down — with repairs reportedly to cost £80,000.
Flights and boats were cancelled, food dwindled in supermarkets — the Co-op even considered a Hercules plane to bring in supplies — and a beach-side food kiosk was seen floating east past Gorey. Overall, costs to the economy from Storm Eleanor are likely to rack up in the hundreds of thousands of pounds.
Jersey Met have confirmed that in 2017 we had the second warmest Spring on record. March was the third warmest month and June the second warmest since records began. Overall, last year was warmer, wetter and sunnier than average, but it also displayed the more erratic weather that has come to be expected with climate change.
If little is done to curb global emissions winter storms like Eleanor are set to become not only more frequent, but harsher and more violent, as confirmed by a recent Nature Geoscience study. Their models showed both an increase in the number of cyclones as well as the wind speed that will be hitting the British Isles. If your child was born recently they’ll be living through these climactic changes.
Rather than Jersey being a leader in cutting carbon emissions, we’re still in denial about our global role, compartmentalising it, so as not to conflict with the business interests that the Island benefits from. Although we are experiencing the effects from climate change right now, it’ll ultimately be future generations that pay the greatest price for this denial.
For now we’re kidding ourselves if we believe that Jersey is acting as part of the solution to the climate change problem humanity faces and it’s time we admitted it.
This column was amended 21/01/2018 to change 2017 to the third-hottest year on record, in line with NOAA data rather than second-hottest in line with NASA data.
