COP26: Canada, U.S. commit to stop funding fossil fuel projects oversea…

The United States, Canada and 18 other countries committed at the COP26 climate summit on Thursday to stop public financing for fossil fuel projects oversea by the end of next year, and steer their spending into clean energy instead.

Campaigners called the commitment a “historic” step in turning off the funding taps for fossil fuel projects. But it did not include major Asian countries responsible for the bulk of such financing oversea.

By covering all fossil fuels, including oil and gas, the deal goes further than a potential made by G20 countries this year to stop overseas financing for just coal.

Read more:
Trudeau signs COP26 potential to end deforestation by 2030. What does it average for Canada?

The 20 countries that signed the potential include Denmark, Italy, Finland, Costa Rica, Ethiopia, Gambia, New Zealand and the Marshall Islands, plus five development institutions including the European Investment Bank and the East African Development Bank.

Story continues below advertisement

“We will end new direct public sustain for the international unabated fossil fuel energy sector by the end of 2022,” they said in a declaration.

That would cover coal, oil and gas projects that are “unabated” – meaning that they burn fossil fuels without using technology to capture the resulting CO2 emissions.

COP26: What’s needed for leaders’ climate commitments to be achieved?

COP26: What’s needed for leaders’ climate commitments to be achieved?

The deal allowed for exemptions in unspecified “limited” circumstances, which it said must be consistent with the Paris Agreement’s target to cap global warming at 1.5C.

Countries that signed the potential together invested nearly US$18 billion on average each year in international fossil fuel projects from 2016-2020, according to examination by non-profit Oil Change International.

But no Asian countries were included. China, Japan and South Korea are the biggest backers of foreign fossil fuel projects in the G20, with most of that sustain going to oil and gas projects. Those countries have committed to stop overseas funding for coal, the potential made by all G20 nations.

Story continues below advertisement


By bringing together richer donor countries with poorer nations that receive international financial sustain, the COP26 deal aims to build a consensus among nations to stop backing polluting projects and instead sustain clean energy both to curb emissions and to avoid building stranded assets.

Governments and financial institutions are facing increased pressure to stop funding coal, oil and gas projects responsible for producing the greenhouse gas emissions that are driving climate change, both at home and oversea.

Campaigners noted that some signatory countries – such as Canada – were nevertheless spending on fossil fuels at home, and urged missing countries and development edges to join.

“The world has no more space or time left to adjust to the expansion of fossil fuel energy,” said Lidy Nacpil of the non-profit Asian Peoples’ Movement for Debt and Development.

Story continues below advertisement

Read more:
With largest oil industry, Alberta sends fewer to COP than any other energy province

Britain ended direct government sustain for new fossil fuel projects overseas this year and Denmark said on Wednesday it would do the same, with exemptions for some gas projects that meet “strict conditions” until 2025. The European Investment Bank has also committed to end oil and gas project funding this year.

The International Energy Agency has said ending investments in oil, coal or gas supply projects is necessary for the world to reach net-zero global emissions by 2050 – which scientists say is crucial for keeping the average global temperature from rising more than 1.5 degrees Celsius beyond preindustrial levels. Beyond that threshold, global warming could unleash extreme and irreversible impacts.

Enormous investment in green technologies is needed for the task. Bernstein analysts calculate the required low-carbon investments at approximately US$2-4 trillion per year until 2050.

(Reporting by Kate Abnett in Brussels and Simon Jessop in Glasgow; Editing by Katy Daigle, Janet Lawrence and Alex Richardson)

Click: See details

Leave a Reply