Analysis Outlines How Export Credit Agencies Can Stop Bankrolling Fossil Fuels, Pursue U.S. Climate Pledges
WASHINGTON – The U.S. is failing to pursue an end for overseas oil and gas financing through the Organization for Economic Cooperation and Development Arrangement on Officially Supported Export Credits, according to a new analysis led by Friends of the Earth and Oil Change International with over 175 civil society signers. This analysis, a proposal for future funding allocation, comes one week before the OECD’s upcoming negotiations, March 6 through 9.
Ending funding for fossil fuel projects abroad was a pledge Biden made in his first year of office and which he committed to in Glasgow at COP26, yet two years later the Biden administration has yet to take meaningful action and has failed to be a leader on the international stage. Additionally, Biden’s influence over leadership at global development and financial institutions seem to prioritize private sector interests rather than meaningful climate action.
Meanwhile, export credit agencies continue to spend billions to bankroll oil and gas projects around the globe at the expense of renewable energy development, and to the detriment of local communities.
The new proposal, supported by over 175 organizations, shows how OECD Export Credit Arrangement can end its support for oil and gas and shift its focus and money toward renewable energy projects. The analysis reflects Biden’s climate pledges and the U.S.’s expected role as a climate leader at the OECD – without whom any significant climate progress is unlikely.
According to the funding proposal, Biden’s leadership at the OECD could:
- End OECD Export Credit Agencies oil and gas financing. ECAs are currently the world’s largest public financiers of fossil fuels, from supporting an average of $33.5 billion per year of public money to coal, oil and fossil gas projects.
- Shift ECA energy finance away from oil and gas, which currently constitutes over 90% of ECA energy finance, toward renewables.
- Create a prohibition on oil and gas export finance, which would dramatically alter energy finance flows away from dangerous fossil fuels.
- Allow the world to achieve its international climate goals of 1.5 degrees Celsius warming limit, which will otherwise be impossible, because ECAs shape the future of our energy systems through derisking large energy projects.
“The world is waiting for the U.S. to fulfill its pledges as a leader on climate, particularly through the U.S. Export-Import Bank,” said Kate DeAngelis, International Finance Program Manager for Friends of the Earth U.S. “Biden cannot promote a renewable energy transition at home while bankrolling fossil fuels abroad. It’s time to take our global responsibility seriously and fund an equitable, renewable energy future.”
“Export credit agencies’ continued support for oil and gas projects completely undermines global climate goals under the Paris Agreements, keeping a 1.5 C global warming trajectory far out of reach,” said Nina Pušić, Export Finance Strategist at Oil Change International. “Powerful OECD negotiating countries like the U.S. must implement their international climate promises to end all international public finance for fossil fuels, and take this commitment to the OECD level, to ensure ECAs do not continue to stand as a major roadblock to the energy transition.”
Contact: Shaye Skiff, [email protected], 202-222-0723