UK Becomes First Major Economy to Ban Public Finance for Overseas Fossil Projects
Climate campaigners were parsing language and awaiting details Friday after the United Kingdom announced it would become the first major world economy to promise an end to public financing of overseas fossil projects.
“I’m pleased to say today that the UK will end taxpayer support for fossil fuel projects overseas as soon as possible,” Prime Minister Boris Johnson said in a statement, just a day before taking the chair at the United Nations Climate Ambition Summit Saturday. “By taking ambitious and decisive action today, we will create the jobs of the future, drive the recovery from coronavirus and protect our beautiful planet for generations to come,” he added.
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“Britain, which is co-hosting the virtual summit ahead of climate negotiations in Glasgow next year, has faced accusations of hypocrisy from campaigners for continuing to finance climate-warming oil and natural gas projects abroad,” Reuters notes. “Johnson had faced particular criticism from campaigners for [the UK Export Finance agency]’s role in backing French major Total’s planned US$20-billion liquefied natural gas project in Mozambique.”
Agence France-Presse notes that UKEF has supported UK fossil exports worth £21 billion/US$28 billion over the last four years, earning criticism from watchdogs and campaigners. Last year, the UK’s Environmental Audit Committee deemed the country’s fossil export financing “unacceptably high” in developing countries, totalling £2.6 billion between 2013 and 2018, compared to just £104 million for renewable energy projects.
On Friday, Johnson said the new policy would come into effect “as soon as possible” and cut off taxpayer support for oil, natural gas or coal projects overseas, including development aid, export finance, and trade promotion. The statement from his office said the policy would allow “very limited exceptions” for fossil gas plants within “strict parameters” that align with the 2015 Paris Agreement.
“This policy shift sets a new gold standard for what serious climate action looks like,” E3G policy advisor Louise Burrows told Reuters. “Britain now has a mandate to mobilize other countries to follow suit.”
Oil Change International used precisely the same descriptor, but a bit more cautiously.
“This is a powerful signal that the era of governments propping up deadly fossil fuels with public money is coming to an end,” said Senior Campaigner Laurie van der Berg. “But the devil is in the detail, and it is too early to say if the UK’s end to fossil fuel finance will set a gold standard for other countries to follow. That would require an immediate end to all new finance for oil, gas, and coal and an end to domestic fossil fuel subsidies estimated at over US$14 billion per year. Nevertheless, this announcement sets the direction of travel and is a win for UK campaigners and activists who have fought for this for years.”
Pete Moorey, head of campaigns and UK advocacy at Christian Aid, told AFP that 80% of known fossil fuel reserves will have to stay in the ground to get climate change under control. “The UK government is right to heed this warning and end support for fossil fuels overseas,” he said. But after that, “developing countries need investment to leapfrog the dirty energy that has led us into this crisis and access the clean renewables that can both accelerate their development and tackle the climate emergency.”