So what is the UK financial sector doing about climate change? Well it seems that instead of investing in a sustainable future, they are in fact bankrolling Indonesia's fossil fuel boom. If you have a growing pension or investment funds in HSBC, Barclays, Standard Chartered or RBS, it is more than likely that it is your money being invested. 83 per cent of the coal produced in East Kalimantan is mined by companies with a financial link to the UK. The World Development Movement's Banking while Borneo burns report paints a bleak picture of evictions, loss of livelihoods and the devastation of local communities, all in the name of investment.
This is not the first time I have taught about East Kalimantan, in the 1990s transmigration moved people from densely populated islands such as Java and Bali to less densely populated areas such as Kalimantan, Sumatra and Sulawasi and in the process the environment suffered. Over 16 per cent (over 1.8 million hectares) of Indonesian forests were lost in just 6 years, between 1997 and 2003, through poor land management.
Last year, 8.5m tonnes of coal were dug out of central Kalimantan, there are already 1,000 mines and one million inhabitants in East Kalimantan and the rich rainforest which cloaked the landscape is being rapidly replaced by open cast mines, waste pits and dumps. By 2020, over 20m tonnes of coal will be extracted (report here). Besides mining, there will also be associated railway and infrastructure projects developed to speed the transport of coal to Korea, India, Japan and beyond. Profits from this exploitation will inevitably end up with the UK banks and the negative externalities/costs will have to be paid by the poor health of the Indonesian population and the destruction of the rain forests, pollution of the waterways and air.
Where mining has started, people complain of air pollution, flooding, and land grabs. "We receive all the negatives of coal but very little of the benefits. We will receive the full impact of the waste when they start dumping. The forest will be gone and we will lose our rubber trees," Erly Aisha, a Dayak leader from Maruwei village, reported to WDM.
The climate change watch group DARA estimated that five million deaths in 2010 were caused by climate change. Due to vulnerability, 90 per cent of these deaths were reported from developing countries.Without the funding from UK banks, coal extraction in Indonesia would be taking place at a much slower pace. So ask yourself - are you bankrolling Indonesia's fossil fuel boom?
1 To what extent do banks have a corporate social responsibility to the inhabitants of East Kalimantan?
2 Britain signed a legally binding target to reducing emissions by 80 per cent by 2050; how is it that the financial sector is able to work outside this legislation?
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