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World leaders as well as citizen activists targeted financing
and taxation of fossil fuel projects at the Leaders Summit on
Climate the Biden administration is holding 22-23 April.
Fossil fuel burning by power businesses, homes, or factories, or
to fuel automobiles remains the largest source of GHG emissions.
These fuels, notably oil, coal, and natural gas, also remain an
integral part of the energy mix in most developed nations — and
certainly in developing countries, where they are cheaply
available.
Replacing their use remains a challenge because, until quite
recently, renewable power was not affordable.
On the first day of the summit, President Joe Biden, who
campaigned on weaning the country off fossil fuels, called for
changes in federal tax policy for fossil fuel production, while
announcing the release of the country's first-ever international climate financing
plan.
On the same day, the US House of Representatives Committee on
Oversight and Reform Subcommittee on the Environment held a hearing
on the same topic, indicating interest, at least among Democrats,
in large-scale reform of domestic taxation and incentives for the
fossil fuel industry.
Unlocking financing for vulnerable
countries
The Biden climate financing plan seeks to unlock funding for
countries that are most vulnerable to climate change and lack the
funds to transition to cheaper and cleaner sources of energy.
"Scaling back public investments in carbon-intensive fossil
fuel-based energy is the necessary corollary to increasing
investments in climate-friendly activities," the plan said.
The Department of the Treasury will take the lead on this
initiative by developing guidance on fossil fuel energy activities
at multilateral banks (MDB), which it will use as part of its
criteria when casting US votes on specific projects. These MDBs
include the African Development Bank, the Asian Infrastructure
Investment Bank, Islamic Development Bank, the International
Monetary Fund, and the World Bank.
The plan directs the US Agency for International Development to
develop a new climate strategy that will help countries "transition
away from fossil fuels and the integrity of the renewable energy
supply chain." This strategy is due for release in early November
to coincide with the upcoming United Nations COP26 climate
meeting.
Biden reiterated his pledge to double, by 2024, the US' share of
public climate financing to developing countries relative to the
average level the White House gave during the second half of the
Obama-Biden administration. He also pledged to triple the funding
for adaptation by the same period.
Total US international public climate financing averaged around
$2.8 billion a year during the period, with around $500 million
going toward adaptation, Leonardo Martinez-Diaz, an aide to Special
Presidential Envoy for Climate John Kerry, tweeted in response to a
question about the Obama funding.
To that end, Treasury Secretary Janet Yellen, who also spoke at
the summit, said the administration's fiscal year 2022 budget request -- for the
period beginning 1 October 2021 -- asked Congress for $1.2 billion
for the Green Climate Fund (GCF) as well as $485 million for other
multilateral initiatives and $100 million for adaptation. The GCF
was established under the 2015 Paris Agreement to help developing
countries reduce their GHG emissions and adapt to climate change
effects.
Even with Biden's funding request for the GCF, which the US
Congress has to approve, the US share still remains $1 billion
short of the $3 billion Obama pledged. Obama was only able to
provide $1 billion for the fund when he was in office.
The US is not the only country that pledged to move away from
fossil fuels during the climate summit. South Korea President Moon
Jae-In said the country would no longer finance coal-fired power
projects abroad and would stop issuing permits for domestic
coal-fired power plants as well.
Recognizing the difficulties that developing countries may face
in transitioning away from coal, Chinese President Xi Jinping urged
the participants, especially those in the developed world, to take
concrete steps to assist those countries' transition to a "green
and low-carbon economy."
Xi also said China would work with its partners to promote
"green" Belt and Road Initiative projects.
However, a report by Global Environment Monitor,
released earlier in April, found that China's new construction of
coal-fired power plants in 2020, at 38.5 GW of capacity, exceeded
all the coal power plant shutdowns across the entire world, at 37.8
GW.
On the second day of the climate summit, Poland's Prime Minister
Andrzej Duda spoke about his country's plans to shift from current
reliance on coal for about 70% of its power to coal-free power by
2050 or earlier. Already, he said, Poland "is a European leader in
production of lithium-ion batteries," which indicates how it is
participating in the energy transition.
Also on board with Biden was Kristalina Georgieva, who heads the
International Monetary Fund. She said phasing out fossil fuel tax
breaks provides "a critical market signal" to producers as well as
consumers. She said such a step has also been proven to advance
investment in renewable energy and other clean energy
technologies.
Impassioned appeal
Perhaps the day's most impassioned appeal for an end to fossil
fuel financing came from Xiye Bastida, a Mexican-Chilean youth
activist with the nonprofit Fridays for Future, who said world
leaders "need to accept that the era of fossil fuels is over."
Fridays for the Future is a global youth movement that began in
August 2018 with a strike staged in front of the Swedish parliament
by then 15-year old Greta Thunberg, who jolted the conscience of
world leaders for climate action when she appeared before the
United Nations.
Speaking before the House subcommittee's 22 April on fossil fuel
subsidies, Thunberg didn't mince her words. "… the fact that we are
still having this discussion and we are still subsidizing fossil
fuels directly or indirectly using taxpayer money is a disgrace….
It is clear proof we have not understood the climate emergency at
all," Thunberg said.
Like Thunberg, Bastida, who is a member of the indigenous
Mexican Otomi-Toltec nation, was equally vocal in reminding the
summit participants that "green economy with business as usual will
severely affect black, brown and indigenous communities."
She demanded that leaders transition immediately to renewable
energy worldwide and "we demand you end fossil fuel subsidies."
Posted 22 April 2021 by Amena Saiyid, Senior Climate and Energy Research Analyst and
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