COP26 climate summit: 20 countries agree to stop funding fossil fuel projects abroad

Image courtesy: Reuters

Glasgow: In a historic breakthrough, 20 countries on Thursday (local time) agreed to stop funding fossil fuel projects abroad at the COP26 climate summit. Several countries had already agreed to phase out fossil fuels by ending international financing for coal, but this agreement is the first of its kind to include oil and gas projects as well, reported CNN.

"This is a historic breakthrough that would not have been possible just a few years ago," Iskander Erzini Vernoit, a climate finance expert at think tank E3G, told CNN. "This leadership group of countries shows how quickly norms on energy are changing."

Jake Schmidt, a senior strategic director at the Natural Resources Defense Council, said the deal "will help drive the transition to renewable energy," but also noted that President Joe Biden still has work to do to make sure the US is fully on board. The strength of the agreement will depend on how many countries ultimately sign up to it, and whether it can get some of the world`s biggest fossil fuel financier nations on board, reported CNN.

The US, UK, Canada, Italy, Switzerland and New Zealand, among others, were party to the agreement, which commits to "end new direct public support for the international unabated fossil fuel energy sector by the end of 2022, except in limited and clearly defined circumstances that are consistent with a 1.5°C warming limit and the goals of the Paris Agreement.

"Environmental groups praised the commitments to end financing for fossil fuel projects abroad, some of the biggest greenhouse gas emitters have so far declined to phase out the use of coal, one of the most important steps to tackle the climate crisis.

COP26 President Alok Sharma said that an agreement on coal phaseout is one of the top goals of the summit, reported CNN.

The UK government announced 23 new countries made commitments Thursday to phase out coal power. But China, India and the US did not sign on to the Global Coal to Clean Power Transition Statement. 

The new commitments take the total number of signatories to 46. Though some big coal users -- including Indonesia, Ukraine and South Korea -- were on the list, the targets fall short of what experts, including the International Energy Agency, say is required to achieve net-zero emissions by 2050.

The statement commits signatories to phase out coal power by the 2030s for major economies and the 2040s for the rest of the world. 
The countries also agreed to end all financing in new coal power generation domestically and internationally, reported CNN.

In October, the UN Environment Programme`s annual "production gap" report found the world will produce roughly 110 per cent more coal, oil, and gas in 2030 than what would be necessary to limit warming to 1.5 degrees Celsius above pre-industrial levels -- and 45 per cent more than what would be consistent with 2 degrees.

A recent study published in the journal Nature found that a vast majority of the planet`s remaining oil, natural gas, and coal reserves must remain in the ground by 2050 to avoid the worst consequences of climate change. 

Most regions around the world, according to the authors, must reach peak fossil fuel production now or within the next decade to limit the critical climate threshold, reported CNN.

And the latest outlook by the International Energy Agency said that more aggressive climate action is needed from world leaders, even as the shift to clean energy leads to a decline in the oil industry.