Environmental and energy ministers from the world’s largest economies agreed to stop funding any overseas fossil fuel development by the end of 2022. This will cut off investment in high carbon pollution programs that threaten the world from meeting its climate targets.
The G7 countries include Japan, the UK, the US, France, Italy, Canada, and Germany, this year’s host country.
Leading the way to a renewable future?
This agreement would end the countries’ taxpayer money from funding oil, gas, and coal projects overseas. Analysts say that this plan could redirect approximately $33 billion from fossil fuels to renewable energy projects.
Alok Sharma, the British president of the 2021 United Nations Climate Change Conference (Cop26) emphasized the importance of this decision with the fallout from the War in Ukraine.
“We are united in the view that climate and environment security are absolutely synonymous with energy and national security and I cannot overstate that. Solving the global energy crisis and the chronic climate crisis requires the same solution – it’s about reducing our dependence on fossil fuels as part of a managed transition.”
“The G7 committing to end public finance for fossil fuels and shift it to clean [energy] is a massive win. This is a timely reconfirmation [amid the Ukraine war] that the most viable pathway to energy security is prioritizing public finance for clean energy. These promises should now urgently be turned into action,” said Laurie van der Burg, a campaign co-manager at the green group Oil Change International.
According to research from The Guardian, however, there are many fossil fuel programs already funded and underway that could risk the world’s climate goals. These “carbon bombs” are likely funded by private funding or sources outside the G7. There are also dangerous loopholes in some laws on the books, like the UK’s latest tax on fuel companies.
While these leading economies have made individual commitments to end overseas fossil fuel financing, this is the first time the whole G7 has agreed on the issue. Perhaps, with the G7 leading the way, this could lead to sweeping international restrictions.
