BlackRock Has Bigger Weapons in Its Climate Armory
To reduce coal use in Asia, the fund manager should use its power as a sovereign debt investor.
Coal use is still growing in Asia.
Photographer: Qilai Shen/BloombergBlackRock Inc., the world’s largest asset manager, says it will cut exposure to companies linked to thermal coal, among other climate-friendly measures. It’s a powerful signal. Unfortunately, it only scratches the surface. If BlackRock CEO Larry Fink is serious about helping to eliminate coal while reshaping finance, his outfit can use its holdings of sovereign debt to tackle governments, too.
Coal power generation has fallen steeply in Europe and the U.S. in the past year or so, thanks to cheap natural gas, higher carbon prices and green pressure. Yet in Asia, once you iron out some local peculiarities, demand for the black stuff remains remarkably resilient. That suggests that even if global appetite peaks soon, as most analysts estimate, it could well remain at high levels for years to come. Analysts at UBS Group AG estimated last July that on current trends the last coal-fired power station may close only in 2079. To blame are the likes of China, India and Vietnam. Their fleet is young, still growing and often state-backed; Western money managers selling out of public securities won’t change that.