March, 15 2023, 08:30am EDT
For Immediate Release
Contact:
- Nicole Rodel – nicole[at]priceofoil.org
- Adam McGibbon – adam.mcgibbon[at]priceofoil.org
- Bronwen Tucker – bronwen[at]priceofoil.org
New report: Commitment to end international finance for fossil fuels is shifting billions, but key countries breaking promises missing in action
New research shows Glasgow Statement commitment forged at the 2021 UN climate summit is already shifting an estimated USD 5.7 billion per year out of fossil fuels and into clean energy
Promise Breakers, a report released today by Oil Change International, reveals that the Glasgow Statement, a joint commitment forged at the 2021 UN climate summit (COP26), is already shifting an estimated USD 5.7 billion per year out of fossil fuels and into clean energy, with the potential of a further 13.7 billion per year if all Glasgow Statement signatories fulfill their commitments.
At COP26 in Glasgow, 39 countries and institutions pledged to end international public finance for fossil fuels by the end of 2022 and shift this money to clean energy. This report is the first international assessment of signatories’ implementation of the commitment since the passing of the end of 2022 deadline.
The report reveals that while some high-income countries have kept their Glasgow commitment, a group of major providers of international public finance have broken their promise, including Germany, Italy, and the United States.
The report’s key findings include that out of sixteen high-income signatories that provide significant levels of international public finance:
- Eight have adopted policies that broadly meet the promise they made in Glasgow (Canada, the European Investment Bank, the United Kingdom, France, Finland, Sweden, Denmark, and New Zealand), shifting an estimated USD 5.7 billion per year out of fossil fuels and showing that the Glasgow Statement is having a real-world impact;
- Four signatories (Belgium, Switzerland, the Netherlands, and Spain) have new policies that further restrict fossil fuel support but leave major loopholes and/or do not meet the end of 2022 deadline;
- Four signatories (Germany, Italy, Portugal, and the United States) have yet to publish new or updated policies. The United States has reportedly adopted a policy, but is refusing to publish it. Ongoing policy debates in Germany and Italy suggest that these countries are likely to introduce loopholes in any forthcoming policies that allow continued fossil fuel financing;
- Just days after this report was finalized, it appears Canada’s export credit agency, Export Development Canada is already in breach of their policy by approving four international oil and gas transactions totaling at least USD 5.5 million in 2023.
The report contains a detailed report card on each signatories’ policies, with recommendations for improvement. It highlights key opportunities for signatories to increase their clean energy finance levels, work together to reiterate and strengthen their commitment to end international finance for fossil fuels at the Japan-led G7 in May and negotiate oil and gas export finance restrictions at the OECD.
The International Energy Agency (IEA) has repeatedly stated that clean energy, not fossil fuels, are the solution for energy affordability, security and climate and development goals. Unless countries meet and expand their commitments to end international public finance for fossil fuels in 2023, climate, development and security goals will be pushed further beyond reach.
Previous Oil Change International research shows that international public finance still heavily favors fossil fuels. Oil Change International’s Public Finance for Energy Database shows that from 2016 – the year after the Paris Agreement was signed – until 2021, USD 422 billion in international public finance has gone to fossil fuels compared to just USD 173 billion for clean energy.
Adam McGibbon, a lead author and Public Finance Strategist at Oil Change International, said: “Our research shows that while the Glasgow Statement is a success story that’s having a real-world impact in shifting finance away from fossil fuels, some countries like the US, Germany and Italy have broken their promise.
These countries must immediately implement policies to keep the promise they made in Glasgow, phasing out international public finance for fossil fuels, or face growing international scrutiny as promise-breakers on climate policy.”
Regine Richter, Senior Energy and Finance campaigner at Urgewald said: “Continuously supporting the fossil fuel industry with public money will obstruct the ecological transition that Chancellor Scholz otherwise declares as most important for the country. He needs to choose his camp: promoting the transition or hampering it.”
Kate DeAngelis, International Finance Program Manager at Friends of the Earth U.S., said: “The United States has long claimed to be a world leader in climate action, yet fails to back this up with meaningful action or policy. U.S. agencies like the U.S. Export-Import Bank and U.S. International Development Finance Corporation continue to be piggy banks for fossil fuel projects from Mexico to South Africa to Indonesia, as these nations suffer from climate change.
President Biden must make his administration’s policy public, which would catalyze other countries to stop providing billions of dollars to polluting projects all over the world. True leaders do not blink when faced with a global climate crisis.”
Simone Ogno, Climate and Finance campaigner at ReCommon, said: “Italy is already three months late for implementing the Glasgow Statement. Through its export credit agency SACE, Italy has become the 1st European fossil fuel financier, enabling the development of strategic oil & gas projects for the Russian Federation, not to mention LNG projects in Mozambique and oil refineries in Egypt.
On top of that, we’re forced to endure SACE chairing even the OECD Working Party on Export Credit and Credit Guarantees, the entity entitled to discuss the restrictions on export credit support for oil & gas. The time has come for Italy and SACE to end this tragic record once and for all.”
Constantin Zerger, Head of Energy and Climate Protection at the Deutsche Umwelthilfe, said: “Instead of providing gigantic sums of public funds for fossil fuel projects that are incompatible with the Paris Agreement, we urge German Chancellor Olaf Scholz to ensure that the Kreditanstalt für Wiederaufbau adheres to the Glasgow Statement. The government-owned development bank needs to officially commit that it will end its support for financial fossil fuel projects abroad and in Germany. Chancellor Scholz, it is time to become a real climate leader!”
Notes:
- In addition to the authoring organizations, the report has also been endorsed by 49 other organizations from across the world.
- The Glasgow Statement was launched at the UN climate talks in Glasgow (COP26). The 39 signatories aim to “end new direct public support for the international unabated fossil fuel energy sector by the end of 2022” and instead “prioritise our support fully towards the clean energy transition.”
- The Glasgow Statement has 39 signatories. This includes 19 high-income countries (Belgium, Canada, Denmark, Finland, France, Germany, Republic of Ireland, The Holy See [Vatican City State], Iceland, Italy, the Netherlands, New Zealand, Portugal, Slovenia, Spain, Sweden, Switzerland, United Kingdom, United States), 15 low- and middle-income countries (Albania, Burkina Faso, Costa Rica, El Salvador, Ethiopia, Fiji, Gabon, The Gambia, Jordan, Mali, Marshall Islands, Moldova, South Sudan, Sri Lanka, Zambia), and 5 public finance institutions (Agence Française de Développement [AFD], Banco de Desenvolvimento de Minas Gerais, the East African Development Bank, the European Investment Bank [EIB], and Financierings-Maatschappij voor Ontwikkelingslanden N.V. [FMO])
- In its latest report, the IPCC highlighted public finance for fossil fuels as ‘severely misaligned’ with reaching the Paris goals, but that if shifted, it would play a critical role in closing the mitigation finance gap, enabling emission reductions and a just transition. More background on the role international public finance plays in shaping energy systems is available in this Oil Change International briefing.
- A legal opinion by Professor Jorge E Viñuales from the University of Cambridge and Barrister Kate Cook of Matrix Chambers argues that governments and public finance institutions that continue to finance fossil fuel infrastructure are potentially at risk of climate litigation.
- The report urges signatories to table and back a proposal for oil and gas export finance restrictions at the OECD as soon as possible. A proposal to end export finance support for oil and gas has been endorsed by over 175 organizations.
Oil Change International is a research, communications, and advocacy organization focused on exposing the true costs of fossil fuels and facilitating the ongoing transition to clean energy.
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'This Scam Is a Non-Starter': Dems Blast McCarthy's Latest Call for Painful Cuts
"Unsurprisingly, House Republicans want to make it harder for poor Americans to get food and medical care while making it easier for rich people to cheat on their taxes," said Sen. Ron Wyden.
Mar 29, 2023
Congressional Democrats reiterated their opposition to steep federal spending cuts on Tuesday after Republican House Speaker Kevin McCarthy issued a vague outline of his caucus' demands, which include more punitive work requirements for aid recipients and steep cuts to non-military spending.
The GOP leader laid out the broad demands in a Tuesday letter to President Joe Biden as progress toward an agreement to raise the debt ceiling and prevent a default remains nonexistent.
McCarthy (R-Calif.) called for another meeting with the president to discuss the debt ceiling standoff, which is a result of the House GOP majority's insistence on painful budget cuts as a necessary condition for any borrowing limit increase. The Congressional Budget Office has projected that the U.S. will default on its debt this summer unless Congress acts.
McCarthy wrote that House Republicans' demands include "but are not limited to" cuts to "excessive non-defense government spending" and stronger "work requirements for those without dependents who can work."
On the latter point, the California Republican favorably cited former President Bill Clinton's 1996 welfare reform law that doubled extreme poverty. Biden supported the law as a senator.
As president, Biden has demanded a debt ceiling increase without any accompanying spending cuts. In response to McCarthy's letter, Biden pushed House Republicans to release a detailed budget plan but stressed that spending talks "must be separate from prompt action on Congress' basic obligation to pay the nation's bills and avoid economic catastrophe."
Bloombergreported last week that House Republicans are in the process of "finalizing" a budget offer that's expected to propose capping spending "at 1% growth annually for a decade" and imposing more strict work requirements on food aid recipients. One recent analysis estimated that more than 10 million people could lose federal nutrition assistance if the GOP gets what it wants on work requirements.
Republicans are also pushing for legislation that would ease the permitting process for oil and gas projects.
In a Tuesday appearance on CNBC, McCarthy said he is prepared to recommend $4 trillion in total spending cuts—but he didn't provide specifics on which programs would be cut and by how much, drawing mockery from Democratic lawmakers.
"If he comes to the president's office with no specific plan, no specific details about what the Republicans want to cut, what are they going to talk about? The weather?" asked Senate Majority Leader Chuck Schumer (D-N.Y.).
Sen. Ron Wyden (D-Ore.), the chair of the Senate Finance Committee, tweeted in response to McCarthy's letter that "this scam is a non-starter in the Senate."
"Unsurprisingly, House Republicans want to make it harder for poor Americans to get food and medical care while making it easier for rich people to cheat on their taxes," Wyden wrote.
\u201cUnsurprisingly, House Republicans want to make it harder for poor Americans to get food and medical care while making it easier for rich people to cheat on their taxes. This scam is a non-starter in the Senate.\u201d— Ron Wyden (@Ron Wyden) 1680030424
Last week, Rep. Rosa DeLauro (D-Conn.) released warnings from federal agencies that would likely be targeted by the GOP's austerity spree in an effort to highlight the far-reaching impacts of spending cuts the party has floated thus far.
"The draconian cuts would take away the opportunity for 80,000 people to attend college and impact all 6.6 million students who rely on Pell Grants," DeLauro said, citing agency estimates. "If implemented, 200,000 children will lose access to Head Start, and 100,000 children will lose access to childcare, undermining early education and parents' ability to go to work."
DeLauro wrote Tuesday that "Republican calls to cut government funding put everything from child care to opioid treatment and mental health services to nutrition assistance at risk for millions."
Sharon Parrott, president of the Center on Budget and Policy, echoed concerns about the potentially devastating effects of the House GOP's plans.
"The recent turmoil in the banking system pales in comparison to the chaos and harm that could ensue if House Rs force a debt-limit impasse and default: recession, lost jobs, and critical payments to seniors, veterans, businesses, families, and states unpaid," Parrott wrote Tuesday following the release of McCarthy's letter.
"A letter isn't a budget," Parrott continued, "so it conveniently allows House Rs to hide that these cuts—in basic food assistance, healthcare, and programs that fund child care, schools, and more—would go to cover some of the cost of more tax cuts for the wealthy rather than to reduce the deficit."
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After Bank Collapses, US Regulators Urged to Impose Rules on Climate-Related Financial Risk
"If management at a wide swath of banks failed to properly address a well-understood risk, they cannot be trusted to independently address other complex emerging risks," argued 50 green groups.
Mar 28, 2023
In the wake of recent bank collapses and protests across the United States demanding financial institutions end fossil fuel financing, 50 climate, environmental justice, and Indigenous rights groups on Tuesday advocated for new regulations.
"We the undersigned strongly urge financial regulators and Congress to learn from the collapse and bailout of Silicon Valley Bank (SVB) and rapidly implement new regulations to mitigate against climate-related financial risk," the coalition wrote.
"Climate-related risks are moving us toward a financial crisis. But regulators have not taken adequate steps to actually mitigate those risks."
The groups' letter was sent to key leaders at the U.S. Treasury Department, Federal Reserve, Federal Deposit Insurance Corporation (FDIC), National Economic Council, and relevant U.S. House and Senate committees.
After explaining how the SVB collapse is partly the result of poor management enabled by regulatory rollbacks under the Trump administration, the letter states that "this is only the latest example of a bank being wholly unprepared for a large and obvious financial risk."
The letter continues:
It is a stark reminder of the chaos that can unfold when a financial institution has high exposure to a risky industry, and of the fact that the leaders of major financial institutions are frequently far more concerned with their short-term gains than with robust risk management measures that ensure their safety and the safety and soundness of the financial system. As a reminder of the latter, senior managers at SVB paid themselves millions in bonuses hours before their bank failed and the federal government financially backstopped it. Here again, stronger rules—including the Dodd-Frank executive compensation rules that remain unfinished—could have incentivized greater bank attention to risks.
To prevent any potential for a cascade of bank runs after SVB's collapse, federal regulators have now effectively set a precedent of guaranteeing all bank deposits in all banking institutions nationwide, to be backstopped by the Federal Deposit Insurance Fund and then taxpayer dollars. Moreover, the Federal Reserve has begun lending at extraordinarily generous terms to any other banks with assets whose real value has been curbed by interest rate hikes—in effect, the Fed is offering a first-of-its-kind, get-out-of-bank-failure-free card to any firms that made the same foreseeable mistake as SVB. Regulators justified this extraordinary shift in the structures of American finance by relying on emergency rules in place to prevent systemic risk to the financial system. In effect, regulators argued that SVB's inability to mitigate one of the most obvious forms of financial risk—the potential for rising interest rates amid high inflation—constituted a grave risk to the whole financial system, and, thereby, the whole economy.
"If management at a wide swath of banks failed to properly address a well-understood risk, they cannot be trusted to independently address other complex emerging risks," the groups argued. "Regulators must intervene to protect the financial system from risks associated with climate change and the ongoing transition to a green economy."
The letter notes recent remarks from Treasury Secretary Janet Yellen about the economic and financial impact of the climate emergency as well as how, as it worsens, "banks of all sizes holding mortgage-backed bonds will see their assets drop in value" while "banks invested in the fossil fuel industry will eventually be saddled with stranded assets."
"Climate-related risks are moving us toward a financial crisis. But regulators have not taken adequate steps to actually mitigate those risks," the coalition warned, calling on U.S. policymakers to:
- Move with urgency and speed to implement proposed guidance for banks and financial institutions related to preparation for climate-related financial risks and to follow up with more detailed guidance;
- Rapidly move forward on rigorous exams for banking institutions, including for medium-sized banks, regardless of industry pressure for light-touch supervision of climate-related risks; and
- Please also see previous coalition letters recommending action on the Federal Reserve's and the Treasury Department's climate guidance.
"Banks cannot be trusted to independently evaluate and protect against the systemic risks of the climate crisis in real-time. They also cannot be trusted to avoid creating risks for other institutions and the financial system through their support for fossil assets and greenhouse gas emissions," the letter says. "This process requires regulators to set clear rules and ensure banks and financial institutions do not engage in unsafe behavior and do not create undue risks and costs for the financial system and the economy."
Signatories include Greenpeace USA, Lakota People's Law Project, Sierra Club, and Third Act—who came together earlier this month for a "Stop Dirty Banks" national day of action, the first elderly-led mass climate demonstration in U.S. history.
"Today is a major drive to take the cash out of carbon," declared Third Act's Bill McKibben. "We want JPMorgan Chase, Citi, Wells Fargo, and Bank of America to hear the voices of the older generation which has the money and structural power to face down their empty, weasel words on climate. We will not go to our graves quietly knowing that the financial institutions in our own communities continue to fund the climate crisis."
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Bush, Pressley to Co-Chair New Congressional Equal Rights Amendment Caucus
"It has been 100 years since the Equal Rights Amendment was first drafted and introduced in Congress," noted Rep. Cori Bush. "That is far too long... and we refuse to wait any longer."
Mar 28, 2023
A coalition of Democratic U.S. lawmakers led by Reps. Cori Bush and Ayanna Pressley on Tuesday announced the launch of a new caucus aimed at realizing the centurylong goal of adding an Equal Rights Amendment to the Constitution.
"It has been 100 years since the Equal Rights Amendment was first drafted and introduced in Congress, and more than a half century since both chambers passed it," Bush (D-Mo.) said in a statement announcing the founding of the Congressional Equal Rights Amendment Caucus. "That is far too long for women, Black and Brown folks, LGBTQ+ people, and other marginalized groups to wait for constitutional gender equality—and we refuse to wait any longer."
Pressley (D-Mass.) said: "I am proud to launch the ERA Caucus with my sister-in-service Congresswoman Bush to affirm the Equal Rights Amendment as the 28th Amendment to the Constitution, establish gender equality as a national priority, and center our most vulnerable and marginalized communities, who stand to benefit the most."
\u201cToday, @AyannaPressley and I are launching the ERA Caucus \u2014 100 years after the Equal Rights Amendment was first introduced in Congress.\n\nWe are joining forces to make sure that equality becomes enshrined in the supreme law of our land.\n\nEquality is overdue.\u201d— Cori Bush (@Cori Bush) 1680030712
Caucus member Rep. Summer Lee (D-Penn.) said that "it's not shocking that when the Constitution was first drafted, women, Black, Brown, queer, and marginalized folks were intentionally written out. What is shocking is that in 2023, our Constitution still does not include equal rights regardless of sex—meaning our Constitution still does not reflect or protect all people."
"To the right-wing politicians and judges waging a full-on assault on the rights of women and queer youth, we're not afraid and we won't be silenced," Lee added. "We're organized and mobilized to make equal rights the law of the land."
After passing the House in 1971 and the Senate the following year, the ERA was submitted to the states for ratification. Congress set a March 1979 deadline for ratification; only 35 of the requisite 38 states approved the proposal by that time. Although the deadline was extended until 1982, no more states ratified the amendment and several state legislatures voted to rescind their ratifications.
\u201cThrilled to join @RepCori and @RepPressley today to found @ERACaucus and fight for gender equality. Women were deliberately left out of the Constitution, but with the #EqualRightsAmendment, we can guarantee equal rights for all people under the law.\u201d— Judy Chu (@Judy Chu) 1680029701
A 21st-century effort to revive the ERA saw Nevada, Illinois, and Virginia approve the measure in recent years. Supporters say 38 states have now backed the ERA, although there is uncertainty over the expired deadlines and rescinded ratifications.
Pressley's office said that in addition to affirming the ERA, the new congressional caucus will "raise awareness in Congress to establish constitutional gender equality as a national priority; partner with an inclusive intergenerational, multiracial coalition of advocates, activists, scholars, organizers, and public figures; and center the people who stand to benefit the most from gender equality, including Black and Brown women, LGBTQ+ people, people seeking abortion care, and other marginalized groups."
\u201cA century after the #EqualRightsAmendment was introduced, we\u2019re still waiting. \n\nAs a Vice Chair on the @DemWomenCaucus, I applaud @RepCori and @RepPressley for launching the @ERACaucus. \n\nLet\u2019s get it done. #ERANow\u201d— Rep. Teresa Leger Fern\u00e1ndez (@Rep. Teresa Leger Fern\u00e1ndez) 1680041462
In a Tuesday interview with The Hill, Pressley said she was "thinking a lot about my 14-year-old daughter, Cora, and how I do not want her to continue to live in a country in a world where we have so conflated and normalized the disparate treatment and outcomes and disparate access and the second-class status it is to be a woman in this society."
"I look forward to the day when calendars will say and on this day in history, the ERA caucus was established," she added, "but I really look forward to the day when our calendars will say on this day in history, the ERA was passed."
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