PUBLIC FINANCE
Governments are still spending billions subsidizing oil, gas and coal. We need to #StopFundingFossils and start investing in the future.
OVERVIEW OF WORK
Since the Paris Agreement, G20 governments have continued to finance more than USD 77 billion dollars annually in fossil fuels through multilateral development banks (MDBs), bilateral development finance institutions (DFIs), and export credit agencies (ECAs). This is three times the support they provide to clean energy. Beyond providing this direct monetary backing, these institutions reduce perceived risk and provide a government stamp of approval on fossil fuel projects that often serves to crowd in private finance. While recently the level of fossil fuel support has started to drop, institutional policies to exclude fossil fuel finance are needed to ensure this progress continues.
While a number of public finance institutions committed to ending coal finance in the early 2010s, it wasn’t until 2017, following years of campaign pressure by Oil Change and others, that the World Bank made a meaningful commitment to stop financing for upstream oil and gas. Following an intense campaign effort, in 2019 the European Investment Bank committed to ending nearly all oil, gas and coal finance. Recently, the UK announced it would end overseas oil and gas finance, and the EU and US, among others, have signalled that they intend to follow suit. Building off these successes, OCI is now working to secure further commitments from governments and public finance institutions on ending public finance for fossil fuels.
LATEST PROGRAM POSTS
Signatories of the Clean Energy Transition Partnership (CETP) have cut their international public finance for fossil fuels dramatically since signing the agreement but are underdelivering on the clean finance pledge, a new report shows.
“Today's commitment to make a finance roadmap to limit warming to 1.5°C and ensure a just energy transition is a welcome step, but in order to be useful, the IEA's new research must continue with strong recommendations to immediately halt finance flowing to fossil fuels, and start recommending dramatically increased public finance on fair terms for renewable energy and energy efficiency."
"Today’s announcement from the Netherlands, United Kingdom, Canada and many of their peers is a disappointment. At a time when we need rich country leaders to concretely expand their past ambition to secure a fair deal, these ministers are just regurgitating promises and initiatives that are now more than a decade old and have been so ineffective that fossil fuel handouts and profits continue to reach record levels."
Australia has joined a major international initiative to end international public finance for fossil fuels at an event held at the UK Government Pavilion today at COP28. Australia follows Norway, who also joined the initiative on Saturday.
LATEST PROGRAM RESEARCH
This new briefing from Oil Change International shows that G7 countries, which have both the capacity and the responsibility to be leaders in phasing out fossil fuels, are not walking the walk – at home or abroad: some G7 countries are massively expanding fossil fuel production at home, while others are investing in more fossil fuel infrastructure abroad. Both are catastrophic failures of leadership, which the G7 has a responsibility to correct.
Despite the urgent need to phase out fossil fuels, Japan is driving the expansion of liquified gas (LNG) and other fossil-based technologies like ammonia co-firing, worsening the climate crisis and harming communities and ecosystems.
*Updated July 2024* Oil Change International analysis shows that several major countries continue to pump $6.2 billion in public finance into international fossil fuel projects despite committing to end this support by the end of 2022.