US and Canada among 20 countries to pledge to stop funding fossil fuels overseas

  • Commitment to end foreign financing of fossil fuels by end of 2022
  • US, UK, Denmark and European Investment Bank join
  • China and Japan among the major backers of missing fossils

GLASGOW, Nov. 4 (Reuters) – The United States, Canada and 18 other countries pledged at the COP26 climate summit on Thursday to stop public funding of fossil fuel projects abroad by the end of next year and to focus their spending on clean energy instead.

Campaigners called the pledge a “historic” step to turn off the funding taps for fossil fuel projects. But it did not include the large Asian countries responsible for most of this financing abroad.

By covering all fossil fuels, including oil and gas, the deal goes beyond the commitment made by G20 countries this year to stop foreign funding for coal only.

The 20 countries that have signed the pledge are Denmark, Italy, Finland, Costa Rica, Ethiopia, Gambia, New Zealand and the Marshall Islands, as well as five development institutions including the European Bank and the East African Development Bank.

“We will end relentless new direct public support for the international fossil fuel sector by the end of 2022,” they said in a statement.

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

The deal provided exemptions in unspecified “limited” circumstances, which he said must be consistent with the Paris Agreement’s goal of capping global warming at 1.5 ° C.

The countries that signed the pledge together invested nearly $ 18 billion on average each year in international fossil fuel projects from 2016 to 2020, according to an analysis by the nonprofit Oil Change International.

But no Asian country was included. China, Japan and South Korea are the main funders of foreign fossil fuel projects in the G20, with the bulk of that support going to oil and gas projects. These countries have pledged to stop foreign funding for coal, a commitment made by all G20 countries.

PRESSURE TO END POLLUTING PROJECTS

By bringing the richest donor countries together with the poorest countries that receive international financial support, the COP26 agreement aims to build consensus among nations to stop supporting polluting projects and instead support clean energy in both to reduce emissions and avoid building stranded assets.

Governments and financial institutions face increasing pressure to stop funding coal, oil and gas projects responsible for producing the greenhouse gas emissions that are causing climate change, both in countries and abroad.

Campaigners noted that some signatory countries – like Canada – were still spending on fossil fuels at home, and urged missing countries and development banks to join.

“The world is running out of space and time to adjust to the expansion of fossil fuels,” said Lidy Nacpil of the Asian Peoples’ nonprofit Debt and Development Movement.

Britain ended direct government support for new overseas fossil fuel projects 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 pledged to end oil and gas project financing this year.

The International Energy Agency has said it is necessary to halt investments in oil, coal or gas supply projects for the world to reach global net zero emissions by 2050 – which , according to scientists, is crucial to prevent the average global temperature from rising more than 1.5 degrees Celsius beyond. pre-industrial levels. Beyond this threshold, global warming could trigger catastrophic and irreversible impacts.

Huge investments in green technologies are needed for this task. Bernstein analysts estimate the required low-carbon investments at around $ 2 trillion per year through 2050.

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

Our Standards: The Thomson Reuters Trust Principles.

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