20 Countries & Institutions Pledge to Stop Overseas Fossil Fuel Funding
At least 20 countries and financial institutions are expected to pledge today to stop all public financing for fossil fuel projects overseas by the end of 2022. Countries including the UK, US, and Denmark, as well as the European Investment Bank and the East African Development Bank are reportedly part of the effort. Funds that would have gone into polluting power plants and pipelines will be spent on green energy instead. The pledge, however, has no bearing on oil, gas, and other fossil fuel development on a country's home soil. China, one of the biggest funders of coal development worldwide, does not plan to sign on, the Guardian reports. But President Xi, earlier in the year, already signaled at the United Nations General Assembly that China may stop financing new coal plants overseas.
The pledge is a boost to a key issue in Envoy Kerry's agenda, as he spent the last year pressing the world to wean off of coal and follow the International Energy Agency's (IEA) findings that the world needs no new fossil fuel development at all (especially coal).
Why This Matters
To have any shot of keeping global temperature rise to 1.5 degrees Celsius above pre-industrial levels, new fossil fuel development must come to a screeching halt this year, as the IEA noted earlier in 2021. This pledge is expected to divert billions of dollars from fossil fuel projects into clean energy ones -- not only stopping the construction of the most carbon-intensive energy systems but also helping build green ones for the future.
"This is a massive step forward," Collin Rees, the program manager at the Oil Change International campaign group told the Guardian. "This represents a serious chunk of the current international public finance for fossil fuels."
Limits to Pledge
While the pledge would stop the flow of public money to projects, it doesn't apply to private funds and doesn't cover developments within the signatory countries. The US, for example, has at least 24 overseas fossil fuel projects pending that it won't be allowed to build abroad but plans to continue at home. And the UK is carrying on with developing new oil and gas fields in the North Sea. Like many climate promises and pledges, this one is not binding. Any actual impact will come from countries sticking to their word and transforming which energy projects they fund abroad.