EU wants fossil fuel sector to help pay to combat climate change

BRUSSELS – The European Union is set to call for the fossil fuel industry to help pay for fighting climate change in poorer countries under a United Nations target, a draft document shows, as nations prepare for talks in 2024 on a global finance goal.

The UN climate negotiations in Baku, Azerbaijan, in November 2024, are the deadline for countries to agree a new goal of how much wealthy, industrialised nations should pay poorer ones to adjust to the most severe impacts of a hotter world.

Given the spiralling costs of deadly heatwaves, droughts and rising sea levels, the new climate finance target is expected to be far larger than the existing UN commitment of rich countries to spend US$100 billion (S$133 billion) per year from 2020, a target they failed to meet on time.

A draft statement for a meeting of EU foreign ministers later in March showed the 27-nation country bloc will argue that the oil and gas sector should also contribute.

The draft EU statement, which sets out the bloc’s priorities for climate diplomacy in 2024, could change before foreign ministers are due to adopt it later in March.

“Recognising that public finance alone cannot provide the quantum necessary for the new goal, additional, new and innovative sources of finance from a wide variety of sources, including from the fossil fuel sector, should be identified and utilised,” the draft statement, seen by Reuters, said.

Countries must decide in Baku whether the new climate finance goal will comprise only public funding, or also pull in the private sector and international institutions, to try to reach developing nations’ fast-growing needs.

The Organisation for Economic Cooperation and Development has said poor nations’ actual climate investment needs could total US$1 trillion per year by 2025.

EU climate policy chief Wopke Hoekstra has said he will try to rally support for international fossil fuel taxes.

But the road to any such agreement is steep, given the broad support needed for a global measure.

Talks at the International Maritime Organisation (IMO) in 2023 on a carbon dioxide emissions levy for shipping were opposed by countries, including China. IMO negotiations will continue in March.

The draft document also said the EU will continue to demand that large emerging economies and those with high CO2 emissions and per-capita wealth – like China and Middle Eastern states – should pay towards the new UN climate finance goal.

Beijing has staunchly opposed this in past UN climate talks.

The question of which countries must pay is expected to be a core issue at the COP29 climate summit in 2024. REUTERS