So can a company often vilified for being complicit in human rights abuses in Nigeria, accused of rampant pollution and ignoring the risks of climate change for decades, be central to the climate fight?
Earlier today, John Kerry, who is Joe Biden’s special envoy on climate change, warned the industry that they “don’t want to be sitting there with stranded assets. That fight is useless. You’re going to end up on the wrong side of this battle.”
A new report, published today by UNEP and other environmental groups, outlines the “Production Gap”, the discrepancy between countries’ planned fossil fuel production and global production levels consistent with limiting warming to 1.5°C or 2°C.
In this new report we consider recovery commitments and pre-pandemic policies to rank G20 countries’ progress in phasing out support to fossil fuels. We find at least USD 584 billion per year between 2017 and 2019 in public support for fossil fuels from G20 governments.
Canada’s export bank, Export Development Canada (EDC), already provides on average nearly fourteen billion dollars in support to oil and gas companies each year. As a result, Canada ranks second highest among G20 countries in public finance for fossil fuels. Now the federal government is using EDC to channel even more support to the oil and gas sector, which has been intensely lobbying the government for a bailout package of up to $30 billion.
Communities in Africa have generally contributed the least to climate change, been undermined the most by international trade and finance policies, and have a right to better international support for distributed renewable energy. In order to reach universal energy access before the 2030 target set by the UN Sustainable Development Goals, international public finance institutions have an urgent responsibility to provide more funding and better financial transparency and tracking for distributed renewable energy. Additionally, they have a responsibility to foster local participation in and ownership of distributed renewable energy initiatives. This briefing provides recommendations for how international public finance institutions can fulfill this responsibility, while revealing that from 2016 to 2018, fossil fuels received more than 3.5 times the support than all kinds of renewable energy did during this period.
Amidst a climate crisis and global pandemic, it’s essential that countries develop public finance packages that phase out fossil fuel production and invest in a just, green transition toward renewable energy that benefits communities and industry workers. While the Netherlands has committed to redirect financial flows from fossil fuels to climate action, this report reveals that the Dutch Government continues to provide billions — at least €8.3 billion per year — in taxpayer backed support for the production and use of fossil fuels.
If the IEA is serious about helping governments sustainably tackle interlocking economic and climate crises, they have one more chance to prove it with their data: by making a 1.5-aligned energy pathway central to the 2020 World Energy Outlook.
As governments begin to unveil trillions of dollars in recovery support and stimulus, now is the time to break old habits – such as the USD 77 Billion in public money that the G20 is still spending annually to finance oil, gas, and coal projects.
With the health and livelihoods of billions at risk from COVID-19, governments around the world are preparing historic levels of stimulus finance. Building a Just Recovery that avoids the worst of climate change means overhauling our public finance institutions fast.