New research by ActionAid shows that:
- Bank financing provided to the fossil fuel industry in the Global South reached an estimated US$3.2 trillion in the seven years since the Paris Agreement on Climate Change was adopted.
- Bank financing provided to the largest industrial agriculture companies operating in the Global South amounted to US$370 billion over the same period.
- Since the Paris Agreement, banks have provided 20 times more financing to fossil fuels and agriculture activities in the Global South than Global North governments have provided as climate finance to countries on the front lines of the climate crisis.
As the climate crisis escalates, fossil fuels and industrial agriculture – the two industries that are the largest contributors to climate change – continue to expand and thrive. Meanwhile, the solutions needed to address the climate crisis remain woefully underfunded.
The climate impact of burning fossil fuels is well known, but the role of industrialized agriculture in the climate crisis is less widely publicized. Agriculture is the second-largest contributor to climate change, and industrialized approaches marketed and controlled by giant agribusiness corporations are responsible for the bulk of emissions in the sector.1 These industrialized agriculture approaches drive deforestation, aggressively market agrochemicals that lead to large amounts of greenhouse gas (GHG) emissions, and expand factory farming. They also undermine billions of smallholder farmers and their agroecological farming systems, which could otherwise feed the world while cooling the planet. Industrial agriculture’s reliance on fossil fuels to produce agrochemicals is just one way in which the two industries are deeply co-dependent.
Countries in the Global South, already disproportionately affected by the impacts of the climate crisis, are playing host to an increasing number of fossil fuel and industrial agriculture developments such as coal mines, gas wells, oil pipelines, coal-fired power plants, and monoculture plantations blasted with agrochemicals such as fossil fertilizers and pesticides. These lead to conflicts over land and water, cause premature deaths, destroy ecosystems, poison rivers and lakes, and drive up the climate change impacts already devastating their communities.
Financing fossil fuels and industrial agriculture also risks locking Global South countries into building expensive and debt-dependent infrastructure that will quickly become outdated, rather than investing in sustainable opportunities for development like renewable energy and agroecology.
This report tracks financial flows from banks to fossil fuels and industrial agriculture in the 134 countries of the Global South.
Authors: Oscar Reyes and Teresa Anderson
Data Analysts: Ward Warmerdam, Barbara Kuepper, and Lea Van Pham
Copy Editor: Rowan Dent
Additional Research: Dr. Doreen Stabinsky
With thanks to colleagues from: ActionAid, Alliance for Food Sovereignty in Africa (AFSA), Banktrack, Center for International Environmental Law (CIEL), Client Earth, Friends Of the Earth, Power Shift Africa, Rainforest Action Network, Scan The Horizon, Sunrise Project, and Urgewald
Date published: September 2023