At the close of the first week of the United Nation’s (UN) climate negotiations, the Green Climate Fund (GCF) reached $9.95 billion with Norway’s most recent pledge. At the same time, the Oil Change International and Overseas Development Institute (OCI) released a new report. The report calls for a short stopped applaud on the GCF announcement, as the analysis shines a new light on the disparity between finance pledged and support for the exploration of new fossil fuel extraction.
The briefing finds that while these “climate finance pledges have been met with some enthusiasm” developed countries are still providing nearly three times more money for fossil fuel exploration alone. Supporting the search for more oil, gas, and coal, then they have pledged for the GCF. As the most recent Intergovernmental Panel on Climate Change (IPCC) synthesis report reiterates that the majority of the proven fossil fuel reserves need to stay in the ground, G-20 governments’ are spending tens of billions of tax dollars each year on subsidies for fossil fuel exploration and development.
The report shows support for fossil fuel exploration by Annex II governments totals $26.6 billion per year, nearly three times the current amount that these countries have pledged in climate finance to the GCF. For example, the United States (U.S.), whose $3 billion pledge is the largest commitment of the GCF thus far, provides more than twice the amount—$6.5 billion—in annual government support for fossil fuel exploration. A 45 percent increase in U.S. fossil subsidies since 2009, with President Obama’s “All the Above” energy policy alone.
Recognizing this deficiency, Parties are contemplating a firm decision to scale down fossil fuel subsidies and high-carbon investments. The option appears in the finance section Article 34.1(d) of the draft text complied by the Ad Hoc Working Group on the Durban Platform for Enhanced Action. “So it’s in there, but it’s [only] an option—we need to make it a decision. Unless we defend it very strongly, there’s a high chance it may be left out,” said Climate Action International policy officer Alix Mazounie.
A provision to phase out fossil fuel subsides and investments should form a key part of the Paris agreement, Mozounie said. Especially, given that fossil fuel subsidies completely undermine climate action and contradict the UN climate negotiations aims, said Mozounie.