Hypocrisy In High Places As Developed Countries Continue To Fund Fossil Fuel Development Despite Pledge To Stop – CleanTechnica

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My colleague Carolyn Fortuna recently posted about how a handful multinational fossil fuel companies are responsible for the majority of climate-killing polluting from carbon dioxide and methane emissions. But a new report from Oil Change International and Friends of the Earth shines a spotlight on how the governments of so-called “first world” countries are enabling this self-destructive behavior by providing critical funding to those companies so they can continue expanding their operations in developing nations.

A Plan To Stop Fossil Fuel Funding

It wasn’t supposed to be this way. Two years ago at a conference in Berlin, the energy and environment ministers from all G7 countries agreed to end taxpayer funding for oil, gas, and coal projects overseas by the end of 2022, an agreement known as the Clean Energy Transition Partnership. The member countries are Japan, the UK, the US, Canada, Italy, France, and Germany. But since then, the G7 countries, along with other countries in the so-called G20, and the international banking system they control, have continued to pour money into fossil fuel developments around the world, mostly in poorer nations. The only good news in the Oil Change report is that funding for coal from G20 members has been sharply reduced.

To be fair, the report does show those countries have stepped up their financing for clean energy, but their support for fossil fuels is larger still. According to The Guardian, the report details how a handful of bad actors are blocking a just transition to renewable energy with outsized financial support for fossil fuels.

A Fossil Fuel Funding Report Card

To limit warming to 1.5°C in line with international climate agreements, 60% of already developed fossil fuel reserves must stay in the ground, Oil Change International says. In support of that goal, the International Energy Agency has sent a clear message that there should be no new oil, gas, or LNG investments — public or private — beyond what was already committed to as of 2021. The OCI report focuses on the actions taken by the signatories to the Clean Energy Transition Partnership since it was signed.

Canada got a passing grade. OCI says that as of the end of 2022, it had fulfilled its commitment to end international finance for fossil fuel development and is under pressure to meet a separate pledge to end its much larger domestic fossil fuel financial support this year. Japan did not fare as well. Despite being a signatory to the commitment to phase out international public finance for fossil fuels, Japan has yet to take steps to put commitments into action. Loopholes in Japan’s policy continue to enable fossil fuel financing, further exacerbating the climate crisis. South Korea is the only major fossil financier that has yet to put in place any policies to end its oil and gas support.

Nations Undermining Fossil Fuel Curtailment

In addition, OCI says that some signatories to the CETP agreement are undermining progress towards the goal of that protocol. In particular, the United States, Italy, and Germany have breached the agreement by continuing to provide billions of dollars to fossil fuel projects well past the end of 2022 deadline. If the G7 and G20 countries were to honor their existing commitments, it would shift $33.5 billion annually out of fossil fuels, OCI maintains.

Claire O’Manique, a public finance analyst at Oil Change International, told The Guardian, “While rich countries continue to drag their feet and claim they can’t afford to fund a globally just energy transition, countries like Canada, Korea, Japan, and the US appear to have no shortage of public funds for climate-wrecking fossil fuels. We must continue to hold wealthy countries accountable for their role in funding the climate crisis, and demand they move first and fastest on a fossil fuel phaseout, to stop funding fossil fuels, and that they pay their fair share of a globally just transition, loss and damage and adaptation finance.”

Kate DeAngelis, senior international finance program manager at Friends of the Earth United States, added, “While international public finance could be a catalyst for the just energy transition, government leaders are failing to use it to deliver clean energy solutions where they are most needed. As this report highlights less than 10% of the G20 and major multilateral development bank financing is even reaching low income countries where energy access needs are greatest. Even worse, a shocking three quarters of that finance is being channeled to climate-wrecking fossil fuel projects that deliver virtually no energy access to communities, and instead, lock in more pollution, climate wrecking emissions, and devastation.”

Clearly, what is happening in many wealthy countries is an advanced case of “Do as we say, not as we do.” Makiko Arima, a senior finance campaigner at OCI, called on Japan in particular to stop supporting fossil fuels. Japan has lobbied behind the scenes to stop G7 countries from adopting a stronger stance on fossil fuels and in favor of some key oil and gas projects.

Arima said, “Japan is derailing the transition to renewable energy across Asia and globally. Despite its G7 commitment to end fossil fuel financing, its public financial institutions like the Japan Bank for International Cooperation (JBIC) continue to support new fossil fuel projects, including the Scarborough gas field in Australia and gas power plants in Mexico. “JBIC is currently investigating a claim that it failed to follow its social and environmental safeguards in developing the Philippines’ first LNG terminal in Batangas. Japan needs to put people and planet over profit, and shift its finances from fossil fuels to renewables.”

Guidelines From OCI

Oil Change International has some clear guidelines it says wealthy companies should follow.  First among them is that public finance institutions must adjust their policies, priorities, and governance to push towards a globally just energy transition. As part of doing their fair share to limit warming to 1.5° C and ensure a livable future, G20 governments and the investment banks they control must:

• Implement whole-of-government policies (or whole-of-institution policies in the case of investment banks) to immediately end new public direct and indirect finance for oil, gas, and coal projects. These policies must not include loopholes for technologies including carbon capture and storage (CCS), fossil-based hydrogen, ammonia co-firing, fossil gas, and other dangerous distractions.
• Dramatically scale up clean energy finance on fair terms, especially for transformative energy democracy and environmental justice priorities where need is greatest. This finance must be delivered on debt sustainable terms, and implemented with safeguards and standards to ensure all projects (a) uphold and protect human rights, including free, prior and informed consent; (b) are implemented with democratic and participatory processes; and (c) ensure the sustainable use of land, water and ecosystems.
• Reform their public reporting to ensure it is transparent and timely.
• Provide their fair share of debt cancellation, climate finance and loss and damage support to countries in the Global South.
• Work towards fair multilateral monetary, trade, tax, debt, and financial regulation rules that are aligned with a safe 1.5°C climate pathway.

The Takeaway

If you have been reading CleanTechnica more than a week, you know we strongly advocate for an end to extracting and burning fossil fuels. Recently we reported on the extraordinary climate changes taking place in Antarctica that threaten all humanity with devastating sea level rise. Those changes will effect every person on Earth in the not too distant future. If you live in Kansas and think the news means nothing to you, stop to consider that Kansas and much of the American Midwest were once at the bottom of a vast inland ocean. It happened once; it could happen again.

We report constantly about international climate conferences where the participants waste millions of words debating whether anything at all should be done to limit the damage from fossil fuels. And yet, nothing ever seems to change except those who dare protest the inaction of governments get prosecuted and incarcerated by those same governments for the crime of speaking the truth.

Groups like Oil Change International and Friends of the Earth will continue to call for climate justice and corporations will continue to spread the lie that they have no duty other then to increase shareholder value, even if doing so brings death and destruction to hundreds of millions of people.

What can one person do when faced with such determined opposition? Govern your own life in accordance with your beliefs. Install heat pumps to heat your home and dry your clothes, add rooftop solar if it is appropriate for you, eat less meat, and drive an electric car. Forget about what your neighbors or some jackass on social media has to say. Think globally; act locally.

Mahatma Gandhi may or may not have been the first one to say, “First they ignore you, then they laugh at you, then they fight you, then you win!” but the message is correct in any event. Together we can do this, one inch and one step at a time. The fury with which the fossil fuel industry is pushing back against efforts to transition to a world without fossil fuels is proof that we are winning. Keep doing what you do!