Fossil fuel financing reductions by CETP nations, yet persistent gaps in clean energy budget persist
In the lead-up to COP29, a major international conference on climate change, concerns about fossil fuel subsidies and the financing of the energy transition in the Global South are at the forefront of discussions.
The International Energy Agency (IEA) has issued a warning that traditional frameworks for ensuring electricity security will not be sufficient amid rapidly growing demand for electricity. This sentiment is echoed in a report by the International Institute for Sustainable Development (IISD), which encourages leaders to scale up investment in clean energy for all, including targeted support for the countries that need it most.
The report, co-authored by Adam McGibbon of Oil Change International, calls for the U.S., Italy, Germany, and Switzerland to honor their commitments made in Glasgow or face increasing international pressure. Notably, these countries have reduced their support for the oil and gas sector by two-thirds since 2021, down to $5.2bn in 2023. However, they have not eliminated support for coal, oil, and gas, a fact that the report highlights.
The issue of fossil fuel subsidies is expected to be a key sticking point at COP29. According to the International Monetary Fund, global fossil fuel subsidies increased to $7.1trn in 2022 and could exceed $8trn by 2030. Most of this funding is directed towards developed countries, with only a small portion reaching lower- and middle-income countries.
Research by the campaign group Debt Relief International supports this claim. Most funding for these countries has been provided as loans, exacerbating the debt crisis in the global South. Debt servicing costs in these regions are consuming 41.5% of budget revenues and nearly half of government spending.
The IISD report advocates for providing finance to the Global South on fairer terms to prevent further escalation of the debt crisis. This is particularly important considering that at COP26 in 2021, over 100 countries committed to reducing methane emissions from the oil and gas sectors. However, by 2023, funding for oil and gas globally had decreased by two-thirds, while support for clean energy increased by only 16%.
The IISD sees this reduction as a sign that the pact is working. Yet, the topic of fossil fuel subsidies was largely excluded from the official agenda at COP28, raising concerns that it may be marginalized again at COP29, which is to be held in another oil-producing nation.
The IEA predicts that renewable energy could account for up to 45% of all electricity generation worldwide by 2040. To achieve this, it is crucial that the international community addresses the issue of fossil fuel subsidies and ensures fair and equitable financing for the energy transition in the Global South.
Natalie Jones, the lead author of the IISD report and a policy advisor at the IISD, encourages leaders to seize this opportunity at COP29 to make significant strides towards a cleaner, more sustainable future for all.
Read also:
- Understanding Hemorrhagic Gastroenteritis: Key Facts
- Stopping Osteoporosis Treatment: Timeline Considerations
- Tobacco industry's suggested changes on a legislative modification are disregarded by health journalists
- Expanded Community Health Involvement by CK Birla Hospitals, Jaipur, Maintained Through Consistent Outreach Programs Across Rajasthan
