A report by Members of Parliament has urged Britain to stop financing fossil fuel projects abroad by 2021 as it undermines the nation’s efforts to combat climate change.
The report, which targets financial support provided by the UK Export Finance (UKEF) agency, was published as Britain debates plans to set tougher climate goals and move toward a net zero emissions target by 2050.
“The government claims that the UK is a world leader on tackling climate change,” said Mary Creagh, chair of the Environment Audit Committee, commenting on the report published by the committee and reported by Reuters Newsagency.
“But behind the scenes the UK’s export finance schemes are handing out billions of pounds of taxpayers money to develop fossil fuel projects in poorer countries,” she said.
UKEF, which aims to help British businesses win contracts abroad, allocated 96 per cent of its energy sector support, or US$3.2 billion, to support fossil fuel projects in five years from April 2013, the report said.
The Committee said UKEF’s activities in support of fossil fuels were the “elephant in the room” undermining the UK’s climate and development objectives.
It added that UK funding risked locking developing countries into high carbon dependency for decades to come.
“The UK government fully recognises the importance of tackling climate change and the need for a mix of energy sources and technologies as the world transitions to a low carbon economy,” a UKEF representative said.
The committee said the support was incompatible with Britain’s efforts to reduce greenhouse gases and also carried risks for taxpayers.
Companies could be left with stranded assets as tougher emission reduction targets discouraged fossil fuel use and as renewable energy becomes cheaper.
The report follows a landmark study from the Committee on Climate Change in May which recommended the UK set a net zero greenhouse gas reduction target in law for 2050.
The CCC highlighted UKEF as an area that “needs further progress”, arguing it is currently “not aligned with climate goals, and often supports high carbon investments”.
The United Nations sponsored Paris Agreement on climate change, adopted by almost 200 nations in 2015, set a long-term goal to limit global warming to “well below” a rise of two degrees Celsius above pre-industrial times while striving toward a tougher goal of just 1.5°C.
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