One day before world leaders meet to discuss the energy transition at the United Nations High Level Dialogue on Energy, more than 200 civil society organizations (CSOs) from over 40 countries have released a statement calling on world leaders to end international public finance for coal, oil and gas.
The statement points to International Energy Agency modelling that shows limiting global warming to 1.5°C requires ending all investments in new oil and gas fields and coal mines in 2021 and rapidly winding down existing fossil fuel production and use. Yet, G20 members still provide at least three times as much public finance for fossil fuels (USD 77 billion) as for clean energy (USD 28 billion) every year. New data published alongside the CSO statement show that the amount of fossil fuel finance provided by the richest countries is also still higher than their estimated level of climate finance.
The CSOs point out that clean alternatives such as wind and solar are already cost-competitive and respond effectively to clean cooking and electricity needs in the Global South. At the same time, they highlight, any new public financial support to oil and gas risks locking-in outdated energy infrastructure in the places that most critically need public investments in clean energy.
The statement comes as momentum builds on shifting public finance out of fossil fuels, with the United Kingdom (UK) adopting a new policy in March this year that put an end to new international public finance for coal, oil and gas. The European Investment Bank, the Dutch development bank FMO and the French Development Agency have also adopted restrictions to their oil and gas financing. But the CSOs say these efforts need to accelerate in order to limit global warming to 1.5°C.
The signatories call on progressive governments and public finance institutions to launch a joint commitment on ending public finance for fossil fuels at COP26. They look to the UK to deliver on this agenda as part of its promise to lead efforts to collectively shift overseas finance from fossil fuels to clean energy.
Tasneem Essop, Executive Director, Climate Action Network International, said:
“We can’t afford any more fossil fuels. The International Energy Agency has already stated that any new fossil fuel development is incompatible with the Paris agreement’s goals and 1.5 degrees celsius. Governments and public finance institutions have a responsibility to invest in a just energy transition shifting public finance out of coal, oil and gas and into renewable energy and supporting coal, oil and gas workers and communities. Pumping more public money into oil and gas projects in countries that are already bearing the brunt of the climate crisis will risk locking in stranded assets, burdening global South countries with further fiscal debt and will increase the threat of runaway climate change. We call on governments and public finance institutions to demonstrate increased political leadership on energy finance to ensure a sustainable, equitable and safe future for all.”
Kate Deangelis, International Finance Program Manager, Friends of the Earth US, said:
“President Biden must heed the call from CSOs from around the world for countries, especially the U.S. as the largest historical emitter, to end international public support for fossil fuels. While the Biden Administration has taken some positive first steps, the climate needs much bolder action. The world is looking to the U.S. to use the COP26 moment to end the billions in international fossil fuel support that the U.S. Export-Import Bank, the U.S. International Development Finance Corporation, and other U.S. agencies provide annually.”
Lidy Nacpil, Coordinator, Asian Peoples’ Movement on Debt and Development (APMDD), said:
“The recently released report of the IPCC says that the world has reached an average of 1.09 degrees warming. And the rate of warming is increasing. There is no more time and no excuse to delay the phase-out of coal, gas, and oil. Governments and public financial institutions should end all forms of support for fossil fuel industries and instead scale up public financing for a just transition to 100% renewable energy systems. Governments of rich countries should deliver on their climate finance obligations, which have been a pittance compared to their subsidies for fossil fuels.”
Laurie van der Burg, Global Public Finance Co-Manager, Oil Change International, said:
“It’s an utter disgrace that rich countries are still spending more public money on fossil fuels than on climate finance. The science tells us that we need to end new public finance for coal, oil and gas now in order to stay below 1.5C. This is a matter of life and death, particularly for those living in the Global South and already vulnerable communities. In March, the UK promised to lead efforts to collectively shift public finance out of fossil fuels and to clean energy. We are looking at Alok Sharma to deliver on this promise by COP26.”
Katherine Kramer, Climate Policy Lead, Christian Aid, said:
“It is great to see that some countries have realized that there is no climate-safe future with oil and gas as part of the mix: this needs to catalyze a global recognition that fossil fuels must be kept in the ground: oil and gas are not needed for development, and are not cannot safely serve as bridging fuels. Governments acting to end public financial support for fossil fuels sends strong signals to investors that fossil fuels have no future. Governments of richer nations also need to actively support countries in the Global South to leapfrog dirty energy and develop sustainably.”
“The UK government cannot be credible when it has to be taken to court to try and block the Cumbria coal mine plans, and is contemplating a large new oil and gas field, the Cambo Field, in the North Sea. The UK must demonstrate climate leadership, rather than being in the thrall to vested fossil interests.”
Shereen Talaat, Co-Director, Arab Watch Coalition, said:
“Shifting international public finance out of fossil fuels and into clean energy is a must. Directing a growing amount of public funds towards renewable energies can support a clean energy transition, based on just and sustainable systems. Governments and public finance institutions must ensure that this shift is in everyone’s best interest, without controversial implications on local communities and their resources.”
Tessa Khan, Founder and Director, Uplift UK, said:
“The UK government is rightly lauded for stopping the flow of public money into oil and gas projects overseas, but it’s seemingly content to continue subsidising the same industry, pumping out the same pollution, off the Scottish coast in the North Sea. If the UK wants to spearhead efforts to end fossil fuel finance internationally, it will also need to take action at home. We need to ditch funding fossil fuels and plough all that public money into clean energy.”
Adrián Martínez Blanco, Director, Asociación La Ruta del Clima, said:
“Ending international public finance for fossil fuels should be a no brainer ahead of COP26. As the latest news from the IPCC shows, this is ‘code red for humanity.’ By continuing to fund oil, gas and coal projects, we are showing that we are not committed to a 1.5 degree world.”
Dean Bhekumuzi Bhebhe, Campaigns Coordinator, African Climate Reality Project, said:
“Global economies need to urgently shift away from their dependence on fossil fuel-based energy generation and leapfrog to renewable energy. The just transition to renewable energy has never been more crucial, as the climate crisis and its impacts threaten the livelihoods and future of humanity. The African Climate Reality Project is calling on all Development Financial Institutions to implement a fossil fuel finance exclusion policy and fund the future we want – one that is equitable and sustainable.”
Lucile Dufour, Senior Policy Advisor, International Institute for Sustainable Development, said:
“While a growing number of governments are turning away from coal and oil, international financial institutions are still providing four times as much funding for gas projects as for wind or solar. But gas is not needed: clean energy alternatives are already cheaper than gas for most energy uses in the Global South, and are effective solutions to meet energy access and development needs. International public finance must be redirected without delay towards supporting a clean energy and resilient future in the Global South, one that doesn’t lock economies into high-carbon energies or risk stranded assets.”
- OCI and Friends of the Earth US research mapping G20 public finance for energy, showing that the G20 governments public finance averages $77 billion a year. This is three times the support they provide for clean energy.
- A legal opinion by Professor Jorge E Viñuales from the University of Cambridge and Barrister Kate Cook of Matrix Chambers argues that governments and public finance institutions that continue to finance fossil fuel infrastructure are potentially at risk of climate litigation: https://priceofoil.org/eca-legal-opinion
- Oil Change International response to United Kingdom’s announcement to virtually end overseas fossil fuel finance: http://priceofoil.org/2020/12/12/uk-announces-end-to-overseas-fossil-fuel-finance/