When Donald TrumpDonald TrumpFormer chairman of Wisconsin GOP party signals he will comply with Jan. 6 committee subpoena Overnight Defense & National Security — Pentagon tells Russia to stand down Billionaire GOP donor maxed out to Manchin following his Build Back Better opposition MORE announced that he was pulling the United States out of the Paris climate agreement, the world let out a collective gasp and many countries defiantly pronounced that climate action would continue even in the absence of the world’s largest historic polluter.
While proclaiming the need to reduce dependence on fossil fuels, these countries failed to mention that the wealthiest among them were financing a hidden lifeline for their oil, gas and coal interests. Countries belonging to the Group of 20 (G-20) and major multilateral development banks (MDBs) have been providing over $71.8 billion annually to prop up the fossil fuel industry, not including domestic subsidies, according to a new report by Friends of the Earth U.S., Oil Change International and a consortium of international organizations.
This support was almost four times as much as the financing they provided for clean renewable energy. At the upcoming meeting in Hamburg, Germany, G-20 countries must show they are serious about keeping global warming to 1.5 degrees Celsius — they must pledge to end their public support for fossil fuels once and for all.
The international community has made some progress in reducing financing for coal projects. A few countries like Brazil and France have placed limits on such financing. In addition, some MDBs and international bodies have put in place restrictions, such as the Organization of Economic Cooperation and Development’s restrictions on export credit agencies’ support of the least efficient coal plants. While, these actions are insufficient to stop or even slow climate change, they are a small step in the right direction.
But the G-20 has a dirty little secret. Even with these limitations on coal, these countries’ fossil fuel binge continues through an unbridled addiction to oil and gas, the financing of which has been almost completely forgotten in efforts to reduce public support for fossil fuels.
G-20 countries and major MDBs provided six times more financing to oil and gas than to coal projects. Moreover, increasing extraction and burning of natural gas will leave the world with a disastrous methane problem — a greenhouse gas that is 87 times as potent as carbon dioxide. Natural gas is a bridge to nowhere. It will lock in fossil fuel infrastructure for decades and divert money from renewables.
If we were to burn all of the existing known fossil fuel reserves, the world would blow past both the 1.5 degrees and 2 degrees Celsius carbon budgets, the limit which scientists say the climate can’t bounce back from. Continuing to explore for even more of these resources is not just irresponsible, it’s dangerous and possibly suicidal. Not only are most of the known fossil fuel reserves unburnable if we want to keep warming below 2 degrees Celsius, but so are any newly discovered fossil fuels.
Yet countries and MDBs have been promoting new exploration and extraction of fossil fuels despite this incompatibility with climate limits. From 2013 to 2015, they provided $13.5 billion annually to activities in search of more fossil fuels. Some countries and institutions, such as the African Development Bank, have pledged not to finance any more exploration. The rest of the world must follow their lead and commit to ending all public support for exploration immediately.
Public financing for energy projects reveals that the world has a dearth of true climate leaders. While support for clean renewables has seen a recent uptick, fossil fuels are still a public investment darling, receiving sweetheart loans, guarantees and other forms of preferential financing.
All told, G-20 governments provided nearly four times more public financing to fossil fuels than to clean energy from 2013 to 2015. The top five supporters of fossil fuels (in descending order) were Japan, China, South Korea, the United States and Germany. G-20 export credit agencies were the largest source of the problem, compared to other bilateral and multilateral assistance that the report analyzed. In total, export credit agencies provided almost $40 billion annually.
It is well past time for governments to shift their trillions of dollars in investment from climate pollution to low-emission, climate-resilient activities. Public finance must send the market signal that these projects are too risky –— the long-term damage that they reap on our air, water and climate outweigh any short-term financial benefit for a small number of wealthy corporations.
G-20 countries should take this moment in Germany to start in earnest the massive financial shift from dirty fossil fuels to clean, renewable energy for the entire world.
The views expressed by contributors are their own and are not the views of The Hill.