Study from Oil Change International reveals biggest culprits in bankrolling overseas projects using dirtiest energy source
By Alex Pashley
The world’s wealthiest economies are pumping billions of dollars in public finance into coal power plants and mines abroad, running counter to their commitments to curb global warming, a report has said.
The OECD, a rich club of nations, gave almost half of the $73 billion approved between 2007-2014, bankrolling investment in the world’s dirtiest energy source.
Japan was the worst offender, spending $20 billion, said the report by campaigners Oil Change, WWF and the Natural Resources Defense Council, in a comprehensive overview of the little-publicised practices.
More than 80% of coal, half of natural gas and a third of oil reserves must stay in the ground to limit temperature rise to 2C – an internationally agreed aim.
After the OECD’s financing mainly through credit export agencies, Russia and China’s institutions followed with 23% of the finance. Multilateral development banks came next with 22%.
“If not for countries like Japan, Korea and Australia standing up for their coal industry friends, the OECD would, foll have already moved to eliminate export financing for coal,” Stephen Kretzmann, Executive Director of Oil Change International.
“Instead of moving forward to support clean energy development and a climate-safe future, these countries are blocking progress while secretly propping up a dying industry.”
The report calls for an end to coal financing and seeks to put pressure on heads of state meeting at OECD and G7 summits in the next week.
Appearing to contradict a claim that export finance is used to fight poverty in developing countries, the report says zero export finance has gone to ‘low income countries’, with a quarter going to high-income countries.
The report says international public finance for coal over the period caused as much pollution as Italy, the world’s 20th emitter of greenhouse gases.
Export credit agencies give guarantees to domestic companies when investing overseas. A type of insurance policy that protects an exporter against default, they provide capital.
Fossil fuel subsidies are set to hit $5.3 trillion in 2015, says the IMF.
“Many developed country governments that push for ambitious climate action are simultaneously funding coal abroad.” said WWF’s Global Climate and Energy initiative leader Samantha Smith. “They cannot do both and be credible.”