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New Report Details How G20 Nations Spend $77 Billion a Year to Finance Fossil Fuels

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New Report Details How G20 Nations Spend $77 Billion a Year to Finance Fossil Fuels
"Most of this fossil fuel finance flowed to wealthier countries," the report says, noting that China (pictured), Canada, Japan, and Korea provided the most public finance for dirty energy projects from 2016 to 2018.
Kevin Frayer / Stringer / Getty Images

By Jessica Corbett

Even after the world's largest economies adopted the landmark Paris agreement to tackle the climate crisis in late 2015, governments continued to pour $77 billion a year in public finance into propping up the fossil fuel industry, according to a report released Wednesday.


The new report, from Oil Change International and Friends of the Earth (FOE) U.S., focuses on financing for oil, gas, and coal projects from members of the Group of 20 (G20), which comprises governments and central bank governors from 19 countries and the European Union.

Although U.S. President Donald Trump began the one-year withdrawal process for ditching the Paris accord in November 2019 after years of threats, other G20 nations remain committed to the agreement, which aims to keep global temperature rise well below 2°C (35.6 F) and further limit it to 1.5°C (34.7 F) by 2100.

Despite their public commitments to the Paris agreement, "G20 countries continue to subsidize the fossil fuel industry even as it makes bad business decisions that hurt people and the planet," FOE U.S. senior international policy analyst Kate DeAngelis said in a statement.

"Our planet is hurtling towards climate catastrophe and these countries are pouring gasoline on the fire to the tune of billions," she said. "We must hold G20 governments accountable for their promises to move countries toward clean energy. They have an opportunity to reflect and change their financing so that it supports clean energy solutions that will not exacerbate bad health outcomes and put workers at greater risk."

The new report—Still Digging: G20 Governments Continue to Finance the Climate Crisis (pdf)—warns that "with the health and livelihoods of billions at immediate risk from Covid-19, governments around the world are preparing public spending packages of a magnitude they previously deemed unthinkable."

In normal times, development finance institutions (DFIs), export credit agencies (ECAs), and multilateral development banks (MDBs) already had an outsized impact on the overall energy landscape and more capacity than their private sector peers to act on the climate crisis. In the current moment, their potential influence has multiplied, and it is imperative that they change course. The fossil fuel sector was showing long-term signs of systemic decline before Covid-19 and has been quick to seize on this crisis with requests for massive subsidies and bailouts. We cannot afford for the wave of public finance that is being prepared for relief and recovery efforts to prop up the fossil fuel industry as it has in the past. Business as usual would exacerbate the next crisis—the climate crisis—that is already on our doorstep.

As Oil Change International research analyst Bronwen Tucker put it: "Fossil fuel corporations know their days are numbered. Their lobbyists are using the Covid-19 crisis as cover to try to secure the massive new government handouts they need to survive."

Echoing recent calls from climate campaigners, advocacy groups, progressive policymakers, and healthcare professionals, the report urges G20 governments and multilateral development banks to support a global, just recovery to the coronavirus pandemic.

"Government money must instead support a just transition from fossil fuels that protects workers, communities, and the climate—both at home and beyond their borders," said Tucker. "Instead of bankrolling another major crisis—climate change—our governments should invest in a resilient future."

Based on information from Oil Change International's Shift the Subsidies database, the report details financing from public institutions controlled by G20 governments—DFIs, ECAs, and MDBs. Key findings include that support for the fossil fuel industry has "stayed steady" since the Paris agreement and ECAs are "the worst public finance actors."

"Most of this fossil fuel finance flowed to wealthier countries," the report says, noting that China, Canada, Japan, and Korea provided the most public finance for dirty energy projects from 2016 to 2018.

 

Still Digging examines just one way these nations support planet-wrecking oil, gas, and coal projects, acknowledging that "unlike the 2017 version of this report, Talk is Cheap, it does not include public finance directly from G20 government departments due to a gross lack of transparency."

The report also doesn't cover "majority government-owned banks without a clear policy mandate, sovereign wealth funds, or public finance institutions with subnational governance," or "subsidies to fossil fuel production at the national level in G20 state budgets, which previous analysis has indicated may provide an additional $80 billion per year in support to fossil fuel production."

However, Still Digging suggests that G20 public finance institutions—as entities owned by governments party to the Paris accord—could be catalysts for more climate-friendly financing decisions "due to their economic and political power."

"Private and public financial investors alike will need to shift rapidly," the report says, "but the role of public institutions is unique because of both their outsized influence on energy finance and their capacity and mandate to lead on climate action."

 

More than 30 groups from across the globe endorsed the report—including Justica Ambiental, or FOE Mozambique, which has worked to raise alarm about international public finance supporting the expansion of liquefied natural gas (LNG) in southern African country.

"It is unacceptable that such a high investment, which will provide billions of profits for foreign companies like Total, is contributing to the impoverishment and oppression of already vulnerable local communities," said Justica Ambiental director Anabela Lemos.

"Peasant and fishing families have lost their livelihoods for a lifetime," Lemos added. "The discovery of gas has stolen their identity and failed to provide them with the conditions stipulated in the so-called community consultation processes."

Reposted with permission from Common Dreams.

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The world-famous wildlife broadcaster and his royal sidekick appear to have played an active role in the prize's inception, and media coverage has focused largely on them as the faces of the campaign.

But the pair are only the frontmen of a much larger movement which has been in development for several years. In addition to a panel of experts who will decide on the winners, the prize's formation took advice from the World Wildlife Fund, Greenpeace and the Jack Ma Foundation.

With more and more global attention on the climate crisis, celebrity endorsement of environmental causes has become more common. But why do environmental causes recruit famous faces for their campaigns? And what difference can it make?

'Count Me In'

"We need celebrities to reach those people who we cannot reach ourselves," says Sarah Marchildon from the United Nations Climate Change secretariat (UNFCCC) in Bonn, Germany.

Marchildon is a proponent of the use of celebrities to raise awareness of environmental causes. In addition to promoting a selection of climate ambassadors who represent the UN on sustainability issues, Marchildon's team has produced videos with well-known narrators from the entertainment world: among them, Morgan Freeman and Mark Ruffalo.

"We choose celebrities who have a lifestyle where they are already talking about these issues," Marchildon explains.

"Sometimes they reach out to us themselves, as David Attenborough did recently. And then they can promote the videos on their own social channels which reach more people than we do — for example, if they have 20 million followers and we have 750,000."

Environmental groups focused on their own domestic markets are also taking this approach. One Germany-based organization that uses celebrities in campaigns is the German Zero NGO. Set up in 2019, it advocates for a climate-neutral Germany by 2035.

German Zero produced a video in March 2020 introducing the campaign with "66 celebrities" that supported the campaign, among them Deutschland 83 actor Jonas Nay and former professional footballer Andre Schürrle. They solicit support as well as financial contributions from viewers.

"Count me in," they say, pointing toward the camera. "You too?"

"We are incredibly grateful for the VIPs in our videos," says German Zero spokeswoman Eva-Maria McCormack.

Assessing Success Is Complex

But quantifying the effectiveness of celebrity endorsement of campaigns is not a straightforward process.

"In order to measure effectiveness, first of all you need to define what is meant by success," says Alegria Olmedo, a researcher at the Zoology Department at the University of Oxford.

Olmedo is the author of a study looking at a range of campaigns concerning pangolin consumption, fronted by local and Western celebrities, in Vietnam and China. But she says her biggest stumbling block was knowing how to measure a campaign's success.

"You need a clear theory of change," explains Olmedo. "Have the celebrities actually helped in achieving the campaign's goals? And how do you quantify these goals? Maybe it is increased donations or higher engagement with a cause."

A popular campaign in China in recent years saw famous chefs Zhao Danian and Shu Yi pledge to abstain from cooking endangered wildlife. While the pledge achieved widespread recognition, both Olmedo and Marchildon say it's difficult to know whether it made any difference to people's actions.

"In life we see a thousand messages every day, and it is very hard to pinpoint whether one campaign has actually made a difference in people's behavior," she explains.

Awareness Is Not Enough

Many campaigns that feature celebrities focus on raising awareness rather than on concrete action — which, for researcher Olmedo, raises a further problem in identifying effectiveness.

"Reach should never be a success outcome," she says. "Many campaigns say they reached a certain number of people on social media. But there has been a lot of research that shows that simply giving people information does not mean they are actually going to remember it or act upon it."

But anecdotal evidence from campaigns may suggest reach can make an active difference.

"Our VIP video is by far the most watched on our social media channels," McCormack from German Zero says. "People respond to it very directly. A lot of volunteers of all ages heard about us through that video."

However, some marketing studies have shown that celebrity endorsement of a cause or product can distract from the issue itself, as people only remember the person, not the content of what they were saying.

Choosing the Right Celebrity

Celebrity choice is also very important. Campaigns that use famous faces are often aiming to appeal to members of the public who do not necessarily follow green issues.

For certain campaigns with clear target audiences, choosing a climate scientist or well-known environmentalist rather than a celebrity could be more appealing — Attenborough is a classic example. For others, images and videos involving cute animals may be more likely to get a message heard than attaching a famous face.

"We choose celebrities who have a lifestyle where they are already talking about these issues," says Marchildon from the UN. "You need figures with credibility."

McCormack cites the example of Katharine Hayhoe, an environmental scientist who is also an evangelical Christian. In the southern United States, Hayhoe has become a celebrity in her own right, appealing to an audience that might not normally be interested in the messages of climate scientists.

But as soon as you get a celebrity involved, campaigns also put themselves at risk of the whims of that celebrity. Prince William and younger members of the royal family have come under fire in recent years for alleged hypocrisy for their backing of environmental campaigns while simultaneously using private jets to fly around the world.

But Does It Really Work?

While environmental campaigns hope that endorsement from well-known figures can boost a campaign, there is little research to back this up.

"The biggest finding [from my study] was that we were unable to produce any evidence that shows that celebrity endorsement of environmental causes makes any difference," says Olmedo.

This will come as a blow to many campaigns that have invested time and effort into relationships with celebrity ambassadors. But for many, the personal message that many celebrities offer in videos like that produced by German Zero and campaigns like the Earthshot Prize are what counts.

The research may not prove this conclusively — but if the public believes a person they respect deeply personally cares about an important issue, they are perhaps more likely to care too.

"I personally believe in the power this can have," says Marchildon. "And if having a celebrity involved can get a single 16-year-old future leader thinking about environmentalist issues — that is enough."

Reposted with permission from DW.

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