Letter: CSO expectations for implementing Glasgow statement on public finance

30.11.2021

During COP26 in Glasgow, 35 countries and four public finance institutions signed a joint statement led by the UK pledging to end international public finance for unabated oil, gas, and coal by the end of 2022 and instead prioritize support for the clean energy transition. Ahead of the first meeting of this group of signatories expected today, a group of 57 civil society organizations from every continent sent a letter to the UK government with recommendations for how to ensure the commitment is effective. If implemented well, it has the potential to immediately shift the more than USD $24 billion a year in oil, gas, and coal from signatory countries, and to grow its membership to end a much larger amount of fossil fuel support.

After congratulating signatories, the letter states, “The real work starts now. To live up to high expectations, the statement must be implemented with integrity. Signatories must deliver on schedule, promote gold standard practices and build momentum towards COP27, including by adding new signatories. This is particularly important as large financiers, including Japan, Korea and China, which collectively are responsible for 46% of G20 public finance for international fossil fuel projects, have not yet signed the statement.”

It continues, “The large and growing group of signatories increases the potential impact, but also means that ensuring strong implementation will be a serious task. If just a few signatories use a broad interpretation of the statement to justify continued financing for fossil fuel projects, the credibility and effectiveness of this initiative will be undermined.”

The CSOs made the following recommendations, detailed further in the full letter:

  • Define the term “unabated” to avoid any misuse or continued support for fossil fuels
  • Clarify the “limited and clearly defined exceptions”
  • Clarify how clean energy investments will be scaled up
  • Avoid an increase in direct support for fossil fuel projects before the 2022 deadline
  • Undertake efforts to extend the commitment to bar indirect support for fossil fuels
  • Work with fellow signatories to secure a growing number of signatories to the statement
  • Establish a robust governance framework to ensure sufficient capacity for implementation and for maintaining political momentum towards COP27
  • Cement the commitments made in the statement in existing international policy processes

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Notes:

  • The joint statement was launched at the UK pavilion at 10.30 GMT 4 November 2021.
  • The countries and the institutions that have signed the joint statement to date are: Agence Française de Développement (AFD), Albania, Canada, Costa Rica, Denmark, Banco de Desenvolvimento de Minas Gerais (BDMG), The East African Development Bank (EADB), El Salvador, Ethiopia, Fiji, Finland, Financierings-Maatschappij voor Ontwikkelingslanden N.V. (FMO), France, Germany, Mali, Marshall Islands, New Zealand, Moldova, Portugal, Slovenia, South Sudan, Spain, Sri Lanka, Switzerland, the European Investment Bank, The Gambia, The United Kingdom, The United States and Zambia.
  • The estimate of a direct USD $24.1 billion shift is based on annual average international public finance for fossil fuels from the participating countries and institutions from 2016-2020. Data for Germany, Italy, AFD, Canada, EIB, the United Kingdom and the United States are from Oil Change International’s Shift the Subsidies Database. Data for Denmark, Finland and Sweden is taken directly from government reporting. No data was available for other donor signatories. Due to incomplete reporting, this is likely an underestimate.
  • Past Last Call” is OCI and Friends of the Earth US’s latest briefing analyzing G20 public finance figures and trends. It shows that between 2018 and 2020 G20 governments and public finance institutions provided at least USD 188 billion in public finance for fossil fuels.
  • In September 2021, 200+ CSOs launched a statement calling on world leaders to end public finance for fossil fuels in 2021 and launch a joint commitment to do so at COP26.
  • In June 2021, 100+ Economists called on the G7 to put an end to not only coal finance, but also oil and gas finance in 2021.
  • 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.
  • A comment piece by Harro van Asselt, professor at University of Eastern-Finland Law School and affiliated researcher at Stockholm Environment Institute, and Gita Parihar, an environmental advocate and in-house consultant for environmental NGOs and the UN, and a board member of the Climate Justice Fund, suggests that the ruling in the Shell court case should be a wake-up call for governments to end fossil fuel support.
  • In October in the lead up to COP26, a global group of campaigners organized Climate Debt Justice Days of Action calling on governments and lenders to take decisive action to address the debt problem in the global south and to provide grants, not loans in order to free up resources to enable countries to respond to the climate crisis.