Decarbonising aid: why the UK must end its overseas fossil fuel financing before COP26
Under the terms of the Paris Agreement, signed April 2016, the UK government committed to making global financial flows “consistent with a pathway towards low greenhouse gas emissions and climate-resilient development”. Despite this, the UK continues to provide high amounts of finance for fossil fuel infrastructure overseas using the international development budget and UK Export Finance (UKEF) credits to UK businesses and exporters.
These investments severely contradict the UK’s government claims to be showing “climate leadership” and undermine other areas of government policy designed to tackle the climate emergency and reduce global poverty.
With the postponed COP26 talks now rescheduled for November 2021, and with the UK’s development bank CDC Group about to announce a new climate change strategy, now is the perfect opportunity for civil society to call on government to end all fossil fuel finance overseas and to begin significantly stepping up finance for a just energy transition in the global south.
In this briefing, we have provided an analysis of the UK’s overseas fossil fuel investments via CDC and other channels. Our analysis shows that:
- The UK has given £3.9 billion to fossil fuel infrastructre overseas since the Paris Agreement was signed. £568 million of this was invested using the international development budget.
- CDC Group alone has given £520 million to fossil fuel projects in the past decade.
- £213 million of CDC’s current investments are in projects that run on the most polluting fuels including heavy fuel oil and diesel.