A coalition of more than 175 civil society organisations from over 45 countries has released a joint position urging world leaders to end OECD export finance, including from Export Credit Agencies (ECAs), for new oil and gas infrastructure.
The proposal calls on OECD members that “consider themselves climate leaders” to table such a proposal during OECD discussions on aligning export finance with international climate goals scheduled for next week (6–9 March), in Paris, France. According to the International Energy Agency, there must be no new oil and gas field development for a good chance of limiting global temperature rise to 1.5°C.
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At COP26, 19 out of 38 OECD members signed an agreement to end international financing of fossil fuels by the end of 2022, but many have so far failed to do so. The coalition argues that signatories must now uphold this commitment, which also includes an explicit directive to encourage others to align their frameworks with Paris Agreement goals.
Governed by the OECD, ECAs provide more public finance for fossil fuel projects than any other type of public finance institution including the Multilateral Development Banks. Between 2019 and 2021, ECAs provided $34bn of financing annually to companies developing fossil fuel projects through government-backed loans, guarantees, credits and insurance – more than seven times their support for clean energy.
The civil society groups propose that OECD members address oil and gas to build on existing restrictions that prohibit ECA financing for unabated coal power, which led to a decrease in G20 public finance support for coal projects of $2.7bn between 2019 and 2022.
Aryampa Brighton, CEO for Uganda-based non-profit Youth for Green Communities, said in a press statement: “Governments all over the world should and must stop funding fossil fuels at home and abroad. They have power to stop banks that are financing these dirty projects, such as the dangerous EACOP [East African Crude Oil Pipeline] project in Uganda and Tanzania. The banks together with oil companies should look at supporting Uganda, Tanzania and Africa at large to be leaders of the 21st century transition to clean renewable energy.”
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By GlobalDataKate DeAngelis, international finance programme manager at Friends of the Earth United States, added: “The world is waiting for the US to fulfill its pledges as a leader on climate, particularly through the US Export-Import Bank. Biden cannot promote a renewable energy transition at home while bankrolling fossil fuels abroad.”
