Financing Climate Disaster: How Export Credit Agencies Are a Boon for Oil and Gas
Oil Change International, Friends of the Earth U.S., and WWF European Policy Office
Endorsed by Both ENDS (The Netherlands), Friends of the Earth Australia, Friends of the Earth Japan, Jubilee Australia, Korea Federation for Environmental Movements (South Korea), KIKO Network (Japan), Re:Common (Italy), Solutions for Our Climate (South Korea), and Urgewald (Germany).
A new report by Oil Change International, Friends of the Earth U.S., and WWF’s European Policy Office reveals how export credit agencies around the world are funding climate disaster by financing over $32 billion dollars each year in coal, oil, and gas projects.
The U.S.’s export credit agency alone funds more than $6 billion in fossil fuel projects each year, making it third-worst globally behind Japan and South Korea.
Existing limitations on support for fossil fuel projects are severely insufficient if the world wants to avoid catastrophic impacts of climate change. Export credit agencies must wind down this funding as soon as possible – and no later than 2020 – in order to stop undermining the Paris Agreement.
Key Findings include:
- From 2013 to 2015, ECAs provided over $32 billion annually to support oil and gas projects.
- Despite climate impacts potentially as bad as coal, ECAs provided more than 11 times as much support to oil and gas than clean energy.
- Nearly 23 percent of ECA oil and gas financing went toward exploration of new oil and gas resources.
- ECAs are supporting climate disaster while providing little help to clean energy – 88 percent of ECA energy financing went toward fossil fuels.
- Japan is the worst offender, providing over $13 billion annually to fossil fuels, followed by Korea and the United States supporting almost $8 and almost $6 billion annually, respectively.
Key Recommendations include:
- All ECAs must disclose the amount and nature of all fossil fuel-related transactions, as well as information on their decision making process.
- All ECAs must formulate policies to phase out all support for fossil fuels.
- The Organization for Economic Cooperation and Development (OECD) ECAs must take the lead to phase out all support for fossil fuels by 2020 at the latest. Through the International Working Group on Export Credits, non-OECD ECAs must also end fossil fuel financing in line with their common but differentiated responsibilities and capabilities to shift their development paths away from fossil fuels.