More than 20 countries and institutions have committed to ending international public finance for unabated coal, oil and gas by the end of 2022.
The deal, announced at the COP26 climate talks in Glasgow this morning, could shift US$15bn of government-backed support out of fossil fuels into clean energy.
The signatories include some of the biggest historical providers of public finance for fossil fuels, including Canada, the US, UK, Italy, European Union and the European Investment Bank.
But major investors, Japan, South Korea and China, are missing, as is Spain.
The UK energy minister, Greg Hands, introducing the agreement, said the launch event was the first at COP to shift public support out of fossil fuels and into clean energy
He said there had been “significant progress” on ending international coal finance, with commitments through the groups of industrial nations, the G7 and 20 . But he said:
“Ending international finance for all abated fossil fuels is the next critical frontier we must deliver on if we are to keep 1.5C within reach. “
Launching the joint statement on international public support for the clean energy transition, he said:
“We must put public finance on the right side of history.
Signatories have agreed to end support for the international fossil fuel energy sector, including the unabated fossil fuel power sector, by the end of 2022 and prioritise support for the clean energy transition. Mr Hands said:
“This is a comprehensive and ambitious near-term commitment.”
Mr Hands was asked by plans for a new coalmine in Cumbria. He said the decision was a quasi-judicial process by the levelling-up minister.
Friends of the Earth welcomed the announcement but said there were caveats and loopholes.
Many rich polluting countries, like Japan and South Korea, were missing from the list. Countries on the list, such the UK and US, must stop expanding fossil fuel extraction at home, Friends of the Earth said.
“As two of the biggest historical polluters, they must, along with everyone else, urgently commit to ending fossil fuels in their own countries.”
A response by civil society organisations including Climate Action Network International and Oil Change International also welcomed the announcement as “the first international political commitment that also addresses public finance for oil and gas”:
“Shifting public finance for energy out of all fossil fuels and into clean energy is an urgent task,” it says. “The International Energy Agency (IEA) says that to limit global warming to 1.5°C, 2021 needs to mark the end of new investments in not just coal, but also new oil and gas supply.”
Research by Oil Change International and Friends of the Earth US shows that the G20 group of leading industrialised nations and Multilateral Development Banks invested $188 billion in fossil fuels abroad from 2018-2020. This was 2.5 times more than they invested in renewable energy.
The International Energy Agency has said annual public and private investment in clean energy should reach nearly $4 trillion by 2030.
DrillOrDrop’s reporting from COP26 has been made possible by donations from individual readers