COP Deal to Stop Foreign Fossil Fuel Funding Has Key Holdouts
(Bloomberg) -- The U.K. has corralled about 20 nations in a pledge to stop funding foreign fossil fuel projects, though the diplomatic win is tempered by the omission of China and Japan.
A one-page statement will be unveiled on Thursday at the COP26 climate talks, according to people familiar with the matter.
It isn’t binding and would still allow limited support for foreign fossil fuel ventures. But it marks a further tightening of the flow of money from public development banks to oil, gas and coal.
The win for the U.K. hosts of the climate talks is only a partial one as the deal is set to exclude some of the biggest funders of foreign fossil-fuel projects, including Japan, South Korea and China. And the pact would only apply to new, direct public support for unabated fossil fuel energy projects -- with exceptions in “limited and clearly defined circumstances,” as long as they are consistent with keeping warming to 1.5-degrees Celsius.
The countries and four financial institutions signing the statement are set to include Canada, the U.S. and Denmark -- which announced a similar plan on its own on Wednesday. Deliberations continue.
Both the G-7 and G-20 have already agreed to stop financing overseas coal projects. The U.K., U.S. and the European Union have announced restrictions on foreign fossil fuel finance.
The new statement would force many to go further: the U.S. for example, would have to block funding from regional development banks such as the U.S. Export-Import Bank and U.S. International Development Finance Corp., one of the people said.
International public finance now is lopsided in favor of fossil projects. In 2020, the Group of 20 nations alone contributed nearly $600 billion to oil, gas and coal projects, according to BloombergNEF estimates.
The COP unit didn’t immediately respond to a request for comment.
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