Analysis: Public Finance from Rich Nations Driving Fossil Fuel Expansion
Oil Change International
The nations of the Organization for Economic Cooperation and Development (OECD) meet this month to discuss proposals to restrict OECD public ‘export credit agency’ finance for coal power plants globally. Export credit agencies are government-owned agencies or quasi-governmental institutions that provide public financing and risk guarantees for their corporations overseas.
This briefing provides an analysis of a leaked OECD document on export credits for fossil fuels. We find that over the last decade, export credits have played a significant role in supporting coal power generation globally. Most alarmingly, OECD export credit financing for coal has substantially increased in recent years.
Through continued public financial support to fossil fuel projects overseas, OECD nations are contributing significantly to climate change. While OECD governments are discussing limited restrictions on coal financing, they must take steps immediately to stop providing export credits and other public finance for all fossil fuels, as the climate crisis demands.
- OECD export credit agency finance for coal power have increased over the last eleven years;
- OECD nations’ public support for fossil fuels over all is substantial – the estimate that the OECD admits is incomplete – already averages $8 billion annually;
- OECD export credits contribute significantly to global coal power capacity expansion, contributing to nearly one-quarter of new coal power outside of China;
- South Korea, United States, France, Japan and Germany are responsible for 92 percent of coal power plant export credits in the last 5 years;
- OECD export credit agency financing for fossil fuels continues to support dirty coal technologies, with over a third of financing going to subcritical plants;
- OECD export credit agency financing for fossil fuels does not support energy access; and
- OECD public financing information remains under a veil of secrecy.
All governments must make strong commitments to ending international finance for coal, including coal mines, infrastructure, and power plants, immediately, along with ending public support for all fossil fuels. OECD countries should make public commitments before the United Nations climate conference in December 2015.