20 countries at COP26 promise to end financing for international fossil fuel projects

The international climate conference’s “energy day” dawned with fresh efforts to block the flow of money to fossil fuel companies, as activists brushed aside arguments from corporate leaders of coal, oil and gas firms that they need to help meet the energy needs of consumers over the next three decades.

The United States and 20 other countries announced Thursday that starting next year they would stop spending tax dollars to support international fossil fuel projects, a move the group said would divert $18 billion a year toward clean energy. The pledge comes just a day after even more nations agreed to restrict public financing for coal power.

The decision to curb public spending on fossil fuels — which came as negotiations were underway at a major U.N. climate conference in Glasgow — will further restrict investments in drilling, power plants and other projects by international development banks and other publicly funded institutions.

“The presumption has to be that direct finance and public finance toward energy in developing countries around the world has to be in the clean and green area,” John Morton, climate counselor for the U.S. Treasury Department, said at the announcement of the initiative on Thursday.

The new measures are the latest of several new targets that the International Energy Agency said could meaningfully alter the trajectory of global warming. The IEA’s executive director Fatih Birol said Thursday that if the new targets “are met in full and on time, they would be enough to hold the rise in global temperatures to 1.8 degrees Celsius [2.7 degrees Fahrenheit] by the end of the century.”

That marks an improvement in the agency’s normally glum assessments, and Birol called it a “landmark moment.” The IEA director credited measures taken since mid-October, including Indian Prime Minister Narendra Modi’s strengthening of the country’s 2030 targets, its pledge to hit net zero emissions by 2070, and the pledge by several other large economies to reach net zero emissions. Birol also said that another key factor was that more than 100 countries had promised to cut emissions of methane 30 percent by 2030.

The forecast, however, remains dire, something not lost on the youth. More than a dozen young climate activists staged a small protest on Thursday inside the U.N. climate summit building. They stood in a crowded hallway and chanted: “Whose planet? Our planet! Whose future? Our future! Whose water? Our water! Whose air? Our air!”

Much larger protests are planned for Friday and Saturday at a park in Glasgow outside the conference venue. Swedish activist Greta Thunberg is expected to headline the events.

Leaders of multilateral institutions, philanthropies and advocacy groups have urged the rapid phaseout of coal, oil and gas operations, arguing that if it is done right, consumers worldwide would be able to make the transition from the carbon-emitting present to a decarbonized future.

“Ending international finance for all unabated fossil fuels is the next critical frontier we must deliver on,” British Energy Minister Greg Hands said. “We must put public finance on the right side of history.”

The move to restrict public money for all foreign fossil fuel projects doesn’t affect what countries do at home, nor does it include every major international funder of such efforts.

China, Japan and South Korea, which together make up nearly half of international public funding for fossil fuel projects, did not join the pledge. And there appeared to be some loopholes. But proponents still said that it could send a positive message.

“We hope this will lead to the same domino effect that we’ve seen with coal finance,” said Laurie van der Burg, a global public finance campaign manager at the non-profit Oil Change International.

Stopping the flow of money to new fossil fuel development is essential to meeting the world’s climate goals, activists say. In May, the International Energy Agency published a “road map” to zeroing out carbon emissions by 2050; according to that plan, there should be no new development of fossil fuel supplies after that year.

“That kind of systemic change is what drives exponential change,” Nigel Topping, the UN’s high-level climate action champion, said of the public and private commitments to shift funds away from fossil fuels.

But even as the promises for greater action pile up, cracks are starting to emerge in some countries’ commitments to curbing planet-warming emissions.

Two days after signing on to a pledge to halt deforestation over the next decade, Indonesia’s Environment and Forestry minister, Siti Nurbaya Bakar, condemned the agreement in a Facebook post.

“Forcing Indonesia to zero deforestation in 2030,” she wrote, is “obviously inappropriate and unfair.”

Indonesian officials said they believed their commitment was only to ensure that the country’s forestry sector absorbs as much carbon as it emits.

Asked about the apparent reversal, COP26 President Alok Sharma projected assurance.

“All of those who have signed up to these have done so in full understanding of what they are signing up to,” he said.

Officials also deflected concerns that the United States did not join a coalition of countries promising to eliminate coal from their power sectors.

Topping noted that President Biden has pledged to generate all U.S. electricity from clean sources by 2035 — a goal that necessarily involves phasing out coal. And economic forces have already curbed the use of the world’s dirtiest fuel in the United States by more than half.

Another factor is the European Union’s plan for a carbon border adjustment mechanism, which would effectively tax products with high carbon contents and make access to the European market difficult. South African President Cyril Ramaphosa said this week that one reason for reaching a landmark deal this week to close coal plants and install renewables was that goods produced in South Africa’s coal-intensive economy could soon face trade barriers as a result of the new E.U. tax.

As negotiators at the climate summit in Glasgow looked for more ways to cut emissions, U.N. experts on Thursday said the world must spend five to 10 times more helping vulnerable people adapt to inevitable environmental upheaval.

Already, millions are suffering amid prolonged droughts, catastrophic wildfires, chronic flooding and worsening storms brought about by rising temperatures, according to a sobering new “Adaptation Report” released at COP26.

The threats will only intensify if emissions continue along their current trajectory, heating up the Earth by an estimated 2.7 degrees Celsius (4.9 degrees Fahrenheit) by the end of the century.

“Climate change is happening, impacts are increasing now and today, and we’re going to be committed to these growing impacts for the foreseeable future, as long as we can actually imagine,” said Henry Neufeldt, chief editor of the U.N. Environment Program’s report.

“Adaptation is necessary,” he said, “even if we stopped emissions today.”

After the World Bank announced it would stop funding coal projects in 2013, there has been a growing wave of similar commitments from countries and financial institutions. This year, the world’s 20 biggest economies agreed to end public finance for overseas coal projects. Restricting public funds for fossil fuels can also make them less attractive to private investors, who may see the projects as riskier without a backstop of government support. It also communicates that producers of polluting fuels have “lost their social license,” van der Burg said.

But van der Burg cautioned that the details of the international finance pledge still need to be fleshed out. Loopholes that permit indirect funding or that allow countries to continue supporting fossil fuel projects that use small amounts of carbon capture to reduce their emissions, for example, would diminish the pledge’s significance, she said.

The separate commitment to phase out coal power and not invest further in it, announced late Wednesday, attracted 18 new countries, including Poland, Vietnam and Chile, all major coal consumers. They committed to phase out coal by the end of the 2030s for richer countries and a decade later for less-developed ones, though oil and gas was not covered, limiting the pledge’s ambition.

“Coal has no part to play in our future power generation,” British Business Secretary Kwasi Kwarteng said in a statement. “The end of coal is in sight. The world is moving in the right direction, standing ready to seal coal’s fate.”

Coal isn’t dead yet, though. GHGSat, which can use satellites to detect facility-level data about greenhouse gas emissions, said Thursday that methane emissions from oil, gas and coal facilities had grown rapidly so far in 2021. It said emissions from coal mining activity in 2021 were larger than those measured from 2017 through 2020 combined.

In the United States, Ashley Burke, spokeswoman for the National Mining Association, defended coal mines and power plants as “the building blocks of electric vehicles, solar panels and wind turbines.”

She said that global emissions reductions couldn’t be achieved “without vastly more momentum around carbon capture development and deployment.” Burke pointed to the recent run-up in energy prices, saying that “targeting the fuels that are still keeping the lights on in much of the world, with no plan for what happens when the wind stops blowing, the sun stops shining and natural gas prices are sky-high, is a road map for exorbitant energy prices.”

The efforts to curtail coal use come as rich nations are being pressed to do more to help their poorer, less energy-intensive neighbors.

Rajiv J. Shah, president of the Rockefeller Foundation, said this week that there is tremendous inequality in the energy sector. He said 3.6 billion people consume less than 1,000-kilowatt hours of energy per person annually. That compares with 8,000 kilowatt-hours per person for countries in the Organization of Economic Cooperation and Development and 12,000 in the United States.

“You cannot have this grand transformation of the global economy take place if it does not capture the hopes and aspirations of billions of people throughout the planet,” said Shah, who along with Ikea Foundation and the Bezos Earth Fund this week launched an alliance to retire coal plants while accelerating renewable energy.

Source: The Washington Post

Tags: Clean Energy, COP26, Fossil Fuel, Glasgow Conference