BARCELONA (THOMSON REUTERS FOUNDATION) - Pressure on wealthy governments to stop financing polluting coal projects in developing nations is getting results, with more countries expected to announce this week and in coming months that they will no longer provide money for coal.
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.
The United States is also preparing to announce restrictions, possibly at the Leaders Summit on Climate organised by US President Joe Biden on Thursday (April 22) and Friday.
South Korea, Japan and Canada could soon join them, and a handful of European nations, in pledging to phase out overseas aid for coal, climate finance experts said ahead of Biden's virtual gathering.
US environmentalists, however, are less hopeful about US action than in January when climate envoy John Kerry told the World Economic Forum the Biden administration would produce a plan to end international financing for fossil fuel projects.
Last week, 57 US green groups wrote to 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 US 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, told the Thomson Reuters Foundation Kerry's comments were "jarring" and suggested the United States planned to continue providing funding for gas projects in places like sub-Saharan Africa.
"I think they are taking a very conservative approach which is just 10 steps back from what they had ... laid out in January," she said.
She and other campaigners say the details are crucial on commitments on overseas fossil fuel funding and that donors must spell out clearly which fuels and state agencies are covered by their promises, as well as setting near-term deadlines.
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, which put an end to virtually all new export finance for fossil fuels last month," 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.
On Wednesday, Mozambique President Filipe Nyusi told an energy conference the government foresees "direct benefits" of more than US$100 billion (S$132.8 billion) from the gas projects, which are expected to generate 70,000 formal jobs over 20 years from 2022.
Clean energy advocates disagreed, saying such projects could result in "stranded" assets and job losses as the world moves away from fossil fuels to curb climate change.
In Britain, Friends of the Earth has applied for a judicial review of the UK decision to provide about US$1 billion of taxpayer money to support development of the Temane LNG plant in Mozambique.
That decision was made on "the incorrect basis" that the project was consistent with commitments by Britain and Mozambique under the 2015 Paris Agreement to curb global warming, the green group said in a statement.
It added that construction of the project would increase the African nation's greenhouse gas emissions by up to 10 per cent by 2022, while annual emissions from using and burning the gas produced would equal the total from the EU aviation sector.
"This huge gas project will fuel the climate emergency and deal yet another devastating blow to the UK government's credibility as it prepares to host this year's crucial climate talks," said Will Rundle, head of legal at Friends of the Earth.
While London's new policy would prevent it from funding such projects on climate grounds in future, the British government confirmed to the Thomson Reuters Foundation that the policy would not apply retrospectively to the Mozambique financing.
According to a government source, Mozambique considers gas from the project an important part of its transition to cleaner energy in line with its national climate action plan and its Paris Agreement commitments.
Boost for renewables
Export finance and development agencies on both sides of the Atlantic, meanwhile, are keen to stress their backing to expand renewable energy in poor countries.
UK Export Finance, the government's export credit agency, said this week it provided over £2.4 billion (S$4.45 billion) of financial support to "sustainable projects" in 2020, including hospitals, clean energy and critical infrastructure in developing nations.
And the US International Development Finance Corporation recently invited private companies to apply for public financing to help them expand their businesses in small-scale renewable energy, with plans to invest US$100 million in such firms in a year.
But campaigners say the amount of government money available for the fossil fuel industry still dwarfs that for clean energy.
According to Oil Change International and Friends of the Earth, which track such funding, G-20 countries from 2016 to 2018 provided an average of US$77 billion per year in public finance for fossil fuels through export credit agencies and development banks, compared with US$24 billion a year for clean energy.
Laurie van der Burg, an Oil Change International campaigner, urged the G-7 club of the richest nations to set an example and clearly state at their June summit they will no longer finance coal and will develop plans to shift away from oil and gas.
"I do think that 2021 has the potential to become the year in which, for the first time, we see the balance of public finance tip from fossil fuels to clean energy, because right now it's still mostly fossil fuels," she said.