Oil Change International

Exposing the true costs of fossil fuels

G8 debates real climate action as Bank support for fossils rising

Oil Change Press Release, 4/13/07 – A leaked draft G8 Summit Declaration reveals that G8 leaders are considering an historic breakthrough in the fight against climate change at the upcoming G8 Summit in Heiligendamm, Germany. Despite the concern over climate, the draft ignores hundreds of billions of dollars in fossil fuel subsidies including increasing levels of support from aid agencies like the World Bank.

“The world urgently needs the G8 to take aggressive action on climate change and the draft Summit Declaration suggests that they may finally be ready to do it,” said Graham Saul, International Programs Director for Oil Change International. “Targets and timetables for real actions are critical, but the G8 is ignoring the most obvious thing they could do right now – cut off public funding for fossil fuels.”

Figures compiled by the Washington-based NGO, the Bank Information Center, show that the World Bank support for fossil fuels increased by 93% in FY06 ($869 mil) over FY05 ($450.8 mil). Moreover, the private sector investment arm of the World Bank, the International Finance Corporation, increased its financial support to oil companies by 77%. Bank Group support for renewable energy also increased, although at a lower rate – 46%.

In Gleneagles, Scotland, two years ago, G-8 leaders instructed the World Bank to create a new framework for clean energy and development, including investment and financing. “It’s not only his girlfriend that Wolfowitz is helping out, it’s his friends in the oil industry too” said Steve Kretzmann, of Oil Change International. “If this is the Bank’s new direction on energy, it’s time for the G8 to pull their money out of the World Bank.”

The draft G8 Summit Declaration argues that if global average temperatures are allowed to rise beyond 2 degrees C the risks from climate change will become “unmanageable” and that avoiding this increase in temperature will “require” global greenhouse gas emissions to peak within the next 10 to 15 years, followed by substantial global emissions reductions of around 50% by 2050 compared to 1990 levels. If adopted at the G8 Summit in Heiligendamm in June, this would be the first time that G8 leaders have jointly acknowledged these important scientific conclusions.

Yet despite acknowledging the urgent need for action, the draft Summit Declaration makes no mention of what the Stern Review Report on the Economics of Climate Change recently called the “most obvious” of the “many policies that distort the market” in favor of fossil fuels: the more than $250bn a year in direct and indirect subsidies to oil and other fossil fuels.

“If G8 leaders want the World Bank and other international financial institutions to play a leading role in the fight against climate change, they need to demand that these institutions stop using public money to bankroll the oil industry.” said Saul. “Its outrageous that we are funneling billions of dollars worth of aid money into the pockets of oil companies instead of using that money to fight energy poverty and kick-start a new energy revolution.”

Read the Financial Times story.

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