* More governments plan to end international coal financing
* Climate campaigners concerned about continued backing for gas
* Clean energy investment rising but far smaller than fossil fuels
(Updates with announcements at Biden’s Leaders Summit on Climate and approval for UK legal case)
By Megan Rowling
BARCELONA, April 22 (Thomson Reuters Foundation) – Pressure on wealthy governments to stop financing polluting coal projects in developing nations is getting results, with more countries announcing they will no longer make such investments.
But the battle is far from won – and is now shifting to include oil and gas finance, climate change campaigners say.
Britain has led the way among major donors, saying it would provide no new government financing for fossil fuel projects overseas from this month, with “very limited” exceptions.
During the Leaders Summit on Climate organised by U.S. President Joe Biden on Thursday, the United States said its departments and agencies will seek to end international backing for carbon-intensive fossil fuel-based energy projects.
They will work with other countries to promote the flow of capital toward “climate-aligned” investments and away from high-carbon investments, the White House said in a new international climate finance plan.
Under the plan, the U.S. International Development Finance Corporation (DFC) pledged to reach net-zero emissions in its investments by 2040 and to increase “climate-focused investment” to 33% of its new allocations starting in fiscal year 2023.
South Korea’s President Moon Jae-in, meanwhile, announced at the summit that his country would end all new financing for overseas coal projects in places like Indonesia and Vietnam.
Japan and Canada could also soon join a handful of European nations in pledging to phase out overseas aid for coal, climate finance experts said.
Green groups welcomed the announcements at the summit but pointed to potential loopholes in the U.S. plan that could enable continued funding for gas projects.
Last week, 57 U.S. green groups wrote to U.S. climate envoy John Kerry urging him to “unequivocally declare that gas is not part of the solution” and to immediately end all fossil fuel support internationally as well as U.S. exports of fossil fuels “as science and justice require”.
The move came after Kerry told a discussion with the head of the International Monetary Fund this month that “gas, to some degree, will be a bridge fuel“, meaning it could smooth the transition from the dirtiest energy sources – coal and oil – to renewables.
Kate DeAngelis, international finance programme manager for Friends of the Earth, said the DFC’s new net-zero target could allow it to continue providing support to gas projects, while reaching its emissions goal by using carbon offsets.
She also noted the new plan to phase out fossil fuel finance did not cover the U.S. Export-Import Bank, the largest source of U.S. government financing for fossil fuel projects abroad.
MOZAMBICAN GAS
This month, Denmark, France, Germany, the Netherlands, Spain, Sweden and Britain agreed to harness public export finance as “a key driver in the fight against climate change”.
Governments in the new Export Finance for Future (E3F) coalition endorsed principles including ending trade and export support for coal power that does not have technology to lower its emissions, reviewing finance for fossil fuels more broadly and assessing how to best phase that finance out.
But, in a statement, about 20 environmental organisations said the coalition had made no new commitments.
“To make a real difference, (E3F) needs to take decisive action to end all export finance for fossil fuels, following at least the level of ambition shown by the UK,” they said.
They also noted the Netherlands, France and Britain continued to provide support for gas extraction in violence-hit northern Mozambique, saying the investments had forced communities from their homes after losing their fishing areas and farmland.
