As world leaders prepare to convene in Hamburg, Germany later this week for the annual G20 summit, it is clear that climate is set to be a key issue. But with the Paris Agreement at the forefront of the world’s stage, how do the energy investments of the G20 countries align with their international climate commitments?
The short answer: Countries need to transition their financing away from outdated fossil fuels toward the clean energy economy.
Even if we were to stop mining all coal worldwide right now, burning the remaining oil and gas reserves that are already operating would push climate disruption above 1.5°C. Exploiting all the reserves in existing fossil fuel fields and mines, without ever opening new ones, would cause global temperatures to rise well above 2°C. Yet despite signing the Paris Agreement and committing to the intention of keeping global temperatures below 1.5°C, a new report from the Sierra Club, Oil Change International, Friends of the Earth U.S., and WWF European Policy Office -- Talk is Cheap: How G20 Governments are Financing Climate Disaster -- shows that G20 countries continue to provide $71.8 billion in public finance to support overseas fossil fuels. These corporate handouts include sweetheart loans, guarantees, and other forms of preferential financing. This is number only represents a piece of their support for dirty energy and does not include domestic fossil fuel subsidies.
The report found that G20 governments are providing nearly four times more public finance for fossil fuels than clean energy. With the G20 summit set to kick off later this week and Trump recently announcing plans to renege on its climate commitment, it is imperative that the remaining G20 nations step up and meet their pledge to avert the climate crisis by moving all public finance out of fossil fuels once and for all.
Using public money to support fossil fuels instead of clean energy isn’t just bad for the climate, it’s disastrous for the economy. The International Renewable Energy Agency (IRENA) estimates that the growing clean energy sector employed 8.1 million people worldwide in 2015, a 5 percent increase from the previous year. Here in the U.S., analysis of U.S. Department of Energy jobs data shows that clean energy jobs outnumber all fossil fuel jobs by more than 2.5 to 1, and they outnumber all jobs in coal and gas by 5 to 1.
If governments want to support jobs, they needs to invest in clean energy, not fossil fuels.
Clean energy is the future. Nowhere is that more apparent than in India, where solar is already underbidding coal. As the cost of renewables continues to plummet, clean energy will continue to push outdated fossil fuel technology to the side. However, instead of financing the clean energy revolution, the U.S. is wasting around $6 billion annually in public finance to prop up coal, oil, and gas, compared to a paltry $1.3 billion annually for clean energy.
But on the other hand, among G20 countries, Japan -- long known as a laggard on climate -- is the number one public financier of fossil fuels, dumping $16.5 billion into dirty, outdated energy every year. But, as we’re seeing more and more, countries are showing that a different path is possible. Both France and Mexico, for example, devote more public finance to clean energy than fossil fuels.
By abandoning its responsibilities and commitments on climate, the U.S. government under Donald Trump has lost its credibility on the international stage. But Trump does not have final say on the Paris Agreement or the planet. The economic drivers that are slashing the cost of renewables and making clean energy the clear choice for both the economy and the climate will only accelerate. When G20 leaders convene in Hamburg, they must look to the future and recommit not only to the Paris Agreement but to making their public finance decisions match their climate ambitions. It will then be up to the U.S. to catch up or be left behind.