Report: ECAs must embed climate in their COVID-19 responses
WASHINGTON – A new report details how export credit agencies are responding to the COVID-19 crisis. ECAs (institutions that finance the international operations of corporations from their home country) are the largest public financiers of fossil fuel projects, spending 14 times as much on fossil fuels as clean energy. Government responses to the pandemic will have a major impact on climate action, and ECAs have an opportunity to support a just and sustainable recovery.
The report outlines how ECA financing has changed since the pandemic hit, making it easier for corporations to seek financial support. Many of these measures could prop up the fossil fuel industry. For example, the U.S. Export-Import Bank just approved $82.9 million in support for YPF S.A., an Argentinian fossil fuel company, for oil and gas exploration and refining equipment that will most likely be used for the disastrous fracking projects in Vaca Muerta. ECAs have an opportunity to invest in a sustainable recovery that delivers long-term jobs, economic stability, and resilience to future crises. To do so the report makes the following recommendations to ECAs:
- Embed climate in their COVID-19 responses in line with the Paris Agreement’s 1.5-degree Celsius target and the Sustainable Development Goals;
- Continue progress on climate policies and protections, including explicitly excluding support for fossil fuel related projects;
- Promote transparency by providing detailed and timely public information on all support provided; and
- Uphold all standards on social and environmental due diligence.
“Export Credit Agencies have literally funded the destruction of our planet by financing dirty fossil fuels to the tune of $40 billion per year,” said Kate DeAngelis, senior international policy analyst at Friends of the Earth U.S. “The fossil fuel industry does not need more financial assistance and ECAs should not use the coronavirus crisis to further prop up oil, coal and gas. ECAs must reform their business and move towards the clean energy transition that is necessary for the future of our planet and its people.”
“Support for companies like Argentina’s YPF from export credit agencies will tend to sustain and deepen the extractivist development model for Argentina, where fossil fuels are not the exception,” said Maria Marta Di Paola of Fundación Ambiente y Recursos Naturales. “ECAs are wasting the opportunity to propose and debate an energy transition – clean, just and inclusive.”
“ECAs have been bankrolling the gas development in Mozambique despite the risks of climate change, violence, and COVID19, as well as the negative impacts on local communities,” said Anabela Lemos, director of Justicia Ambiental. “ECAs should use the current global health crisis to shift their funding away from fossil fuels in Mozambique and elsewhere.”
The report, entitled “ECAs, COVID-19 and Climate: Recommendations to Ensure that Economic Support Protects People and the Planet,” can be found here. In addition to the authoring organizations, the report has also been endorsed by 14 organizations: Abibiman Foundation (Ghana), AbibiNsroma Foundation (Ghana), Alliance for Empowering Rural Communities (Ghana), Both ENDS (Netherlands), E3G (Europe), Environment Governance Institute Uganda, Friends of the Earth Japan, Friends of the Earth United States, Greenpeace, Les Amis de la Terre France, Milieudefensie (Friends of the Earth Netherlands), Oil Change International, and Solutions for Our Climate (South Korea).