It’s a quiet climate success story: over 40 countries and public finance institutions have cut their international public finance to fossil fuels by two-thirds over the past three years.  

At the COP 26 climate talks in Glasgow, UK, 39 countries and public finance institutions launched the Clean Energy Transition Partnership (CETP). They committed to end their overseas public support for fossil fuels and instead scale up their support for clean energy. Joined by Norway and Australia at COP 28, the partnership now numbers 41. 

Our research finds that countries are largely delivering on their promise. Signatories’ collective fossil fuel financing in 2023 amounted to $5.2 billion, a decrease of two-thirds from the pre-CETP baseline. This is a historic achievement. 

There are a few laggards, such as the United States, Italy, Switzerland and Germany, which either still need to change their policies or have passed substandard policies that leave large loopholes for fossil fuel financing. However, even among these signatories fossil fuel finance is falling. 

Clean energy for the rich?

Source: IISD report, August 2024: Out With the Old, Slow With the New

Source: IISD report, August 2024: Out With the Old, Slow With the New

This is symptomatic of a larger issue. In 2023, China and advanced economies accounted for 90% of new solar PV and wind capacity installations, and 85% of investment in renewable energy. The lack of clean energy investment going to emerging and developing economies (EMDEs) outside of China is a worrying trend. 

Crowding in private investment 

Public finance is critical to bridge the gap in clean energy investment. It can lower risk for other investors because it is often provided at preferential below-market rates and longer time horizons. This can crowd in much larger flows of private investment for proposed projects. 

The International Energy Agency estimates that for the world to stay on a 1.5°C pathway, annual concessional funding in EMDEs from developed economies and development finance institutions would need to reach $80-100 billion annually by 2030. 

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CETP signatories, and other high-income countries and public financial institutions, have an important role to play in scaling up concessional finance for the energy transition in EMDEs. They need to adopt ambitious and quantitative targets for rapidly scaling up good-quality public finance for clean energy. 

To meet the CETP’s clean energy commitment, signatories should, at the very least, aim to provide as much clean energy finance per year as their average pre-CETP fossil fuel support. Ideally, policies should stipulate much larger amounts. 

Avoiding more debt stress 

Policies should target low-income countries for finance to achieve universal energy access. The cost of capital is often higher in these countries due to a range of fiscal, socioeconomic and climate risks. But that should not be an excuse for public development finance institutions not to invest, since they are not driven by the profit motive. 

To be effective, financing needs to be high-quality. From 2020 to 2022, 83% of signatories’ international clean energy finance to low- and lower-middle-income countries was delivered through loans.  

Clean energy finance must not further burden Global South countries, which are spending almost half their budgets servicing debts. Policies must ensure a much larger portion will be delivered through grants and highly concessional instruments.  

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The story is not over in terms of shifting public money away from fossil fuels. China, Republic of Korea and Japan are not CETP members, and together they continue to provide an average of $21 billion annually in international public finance for fossil fuels. The next step is to bring these countries along with G20 countries and multilateral development banks on board with the CETP initiative. 

Domestic public finance for fossil fuels persists, as well as fossil fuel subsidies. Globally, fossil fuel subsidies alone exceeded $1.5 trillion in 2022. Ending these subsidies can free up even more public money to invest in solutions for people and planet. 

In the year of the new climate finance goal to be agreed at COP 29 in Baku, Azerbaijan, every penny counts.

The post Leaders are cutting fossil fuel finance – next comes unlocking clean energy for all appeared first on Climate Home News.

The irony that most will come by plane and leave a huge carbon footprint in their wake is not lost on anyone.

We should all be thoughtful about the amount we fly. But some of my civil society colleagues are calling for all climate conference attendees to amp up their commitment to low-carbon travel. They’ve suggested attendees to next year’s UN Climate Change Conference, likely to be held in Scotland, attend either through zero-emissions travel – like Greta Thunberg’s sailing journey to New York – or via videoconferencing.

I think this push is dangerous.

As a writer for IISD Reporting Services and previously a New Zealand youth delegate, I’ve been to several UN climate change conferences, also known as Cops. Before my first conference, I had an image of what it would be like: country delegates sitting in a huge, flag-filled room talking climate change. It quickly became clear that’s only what they look like at the very beginning and end.

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In between, talks splinter into 20 or 30 parallel workstreams, each discussing a different complex issue. At last year’s COP in Poland, I counted 27 different workstreams. There are usually five to 10 meetings happening at the same time in different rooms.

On top of these, there are the informal and private meetings: the one-on-one bilaterals with the Cop president or the executive secretary of the UN’s climate treaty body; the casual, unplanned chats in the cafeteria; the diplomats who huddle together, cross-legged, on hallway floors.

The outcomes of the Cops are highly informed by this fragmented, informal process. The most powerful nations – who have historically been the drivers of carbon emissions while enduring fewer impacts – bring large teams to the conferences. They can take advantage of a divided process by being in many places at once. The United States, for example, brought nearly 150 people to the Paris Cop in 2015.

Least developed countries and small island developing states, on the other hand, often arrive with two or three delegates. How do these countries, who endure the direct effects of climate change most intensely, advance their priorities in 27 different workstreams meeting in different rooms?

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They band together and pool resources to advance their common positions in the many different discussions. This kind of coordination is organized via face-to-face meetings and hallway huddles, where rapport and relationships are key.

Now imagine a scenario where delegates can only take the train or sail to attend a negotiation, as demanded by some in civil society. Who would show up? Who could afford to commit diplomats, heads of state or critical ministers to travel for weeks at a time? European nations can reach Scotland by train. Canada and the United States may be able to consider an ocean voyage. Perhaps China could put a delegation on a train for a month. Maybe some other richer countries, like Mexico, Japan or Brazil, could think about participating.

Who wouldn’t be in the room? Least developed countries. Small island developing states. Kiribati. The Marshall Islands. Chad.

Teleconferencing seems a more workable option, but this relies on fast, dependable internet, which many countries lack. Ask any government official from a small island developing country about connectivity and they’ll tell you.

Teleconferencing also wouldn’t allow for those not in the room to participate in the informal element of the negotiations. If powerful nations are the only ones physically in the room, they’ll have unique access to those meaningful, informal chats, those hallway huddles, those chances at collaboration.

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I’ve watched the process for six years. This is how it works.

By all means, let’s ask European delegates to take the train to the Cop in Glasgow and celebrate individual examples – like Greta’s sea voyage to New York – as powerful symbols. But demanding low-carbon travel for all will only further disadvantage the most vulnerable.

There are many problems with the UN climate talks: corporate influences and the fossil fuel lobby continue to co-opt agreements and water down ambition as global temperatures rise. I hope voices like the Extinction Rebellion movement continue to criticize the process and take action at the next climate Cop.

I hope they act in service and in consultation with the most vulnerable. A global flotilla of ships and videoconferencing paid for by wealthy nations sounds idyllic but insisting on sustainable travel will only reinforce the exclusion of the global south.

Natalie Jones is a writer for the Earth Negotiations Bulletin and doing a PhD in international environmental law at Cambridge University

The post Ban flying to UN climate talks? That’s a dangerous idea appeared first on Climate Home News.

The plans countries have submitted to the deal set emissions reduction targets and scale up renewable energy. But a remarkable number fail to address a vitally important piece of the climate puzzle: fossil fuel production.

The international climate community is in Abu Dhabi this weekend to prepare for the landmark UN Climate Action Summit this September. Spearheaded by the UN Secretary-General, the summit will mobilise political leaders, the private sector, and civil society to give a much-needed boost to collective climate ambition.

Already, the UN has signalled some 80 countries may be increasing their international climate pledges as part of this effort. But if the past is any guide, these country pledges will fail to include their production of the fuels that drive global warming.

New research from SEI shows that a third of fossil-fuel-producing countries make no mention of extraction in their current nationally determined contributions (NDCs). And not a single country has mapped a path away from coal, oil, or gas extraction.

It’s time to change that, if we are to have any chance of meeting the Paris Agreement’s goals.

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Countries are right to address fossil fuel consumption. But they must also address production to ensure deeper emission reductions, broader buy-in, and better planned transitions.

Calls are growing for countries to take action to wind down fossil fuel production. Over 500 NGOs have signed the Lofoten Declaration, which calls for an end to fossil fuel development and a managed decline of existing production. The leaders of the Pacific islands similarly called for an international moratorium in the Suva Declaration. And fossil fuel supply-side policies are beginning to gain ground globally: from bans on oil exploration in Costa Rica, France and Belize; to the shuttering of outdated coal mines in China; and increased taxation of coal production in India.

This momentum can build within the international climate process. The Paris Agreement creates various new opportunities for countries to address fossil fuel supply. For example, countries could include targets, pathways and policy measures to wind down fossil fuel production within their NDCs and their long-term low greenhouse gas emission development strategies (LEDS). They could also include plans for economic diversification and a just transition for fossil-fuel dependent workers and communities.

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Due to the bottom-up nature of these plans, countries can include these supply-side approaches without agreement among all parties. In the short term, at least, this renders it a more politically feasible strategy than supply-side measures that require consensus. This approach could nevertheless help socialise supply-side action at the UN level, and generate a virtuous cycle that encourages countries to take more ambitious supply-side action.

So far, countries have not taken advantage of this potential. Only two nations – India and Nigeria – have included measures in their NDCs to financially disincentivise, or address public support for, fossil fuel production.

When countries’ climate plans do discuss fossil fuels, this is mainly in the context of reducing the emissions associated with their extraction and delivery. While important, such efforts would, at their fullest potential, contribute just a few percent to global emissions reductions, and do not obviate the need to scale down overall production. Some plans also highlight the need for a just transition and economic diversification away from fossil fuel production; however, they tend to lack concrete measures to make such visions a reality.

A handful of countries also express an intention to continue or ramp up their fossil fuel production. Though every country does not need to curb extraction at the same pace, it is important for countries to grapple with the question of whose carbon is burnable in a climate-constrained world. When referencing fossil fuel production, countries should therefore explain why their plans are fair and ambitious.

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Countries are expected to “demonstrate a leap in collective national political ambition” when they meet at the Climate Action Summit in September. By addressing fossil fuel production in their NDCs and LEDS, countries would take a key step in bringing this bold – but necessary – vision within reach.

To date, we’ve tried tackling the climate crisis almost exclusively through demand-focused policies. It’s time to change the status quo, and take the road less taken – one that prioritises reducing both the use and the production of fossil fuels.

Cleo Verkuijl is a research fellow and Natalie Jones is a policy intern at the Stockholm Environment Institute. Their recent research on NDCs and LEDS is detailed in the working paper, Untapped ambition: addressing fossil fuel production through NDCs and LEDS.

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