Civil society organizations welcome clean energy pledge following countries’ success in cutting international fossil fuel finance

FOR IMMEDIATE RELEASE

November 13, 2024
Nicole Rodel, Oil Change International (in Baku) – [email protected] / +27842570627

Valentina Stackl, Oil Change International (ET – remote) – [email protected] +17342766260

Civil society organizations welcome clean energy pledge following countries’ success in cutting international fossil fuel finance

Baku, Azerbaijan – Today, The UK-led Clean Energy Transition Partnership (CETP) will launch its Clean Energy Action Plan at COP29 in Baku. 

What: 

Launch of the Clean Energy Transition Partnership’s (CETP) Clean Energy Action Plan, announcing new commitments for international public finance for clean energy, with a focus on Emerging Markets and Developing Economies (EMDEs). 

When/where:

• At the UK Pavilion in Baku today at 13:00 AZT (9AM UK, 10AM CET).
• Webcast here. 
• The text of the plan will be published ahead of the event on the CETP website.

Who:

• Rachel Kyte, UK Climate Envoy.
• Representatives from CETP signatory countries including the US, Canada, Australia, Norway, and EU member states.

Background:

The Clean Energy Transition Partnership (CETP) was launched by the UK at the 2021 COP26 Glasgow climate conference. The initiative has 41 signatories including the US, Canada, Australia, Norway, and many EU states, who have all pledged to end their government-backed international public finance for fossil fuels, and instead provide public finance for clean energy.

Over the last few years, CETP signatories have successfully cut their international public finance for fossil fuels by up to two-thirds (a drop of USD 15 billion per year). While the CETP has been successful in bringing down international fossil fuel finance – an effort that is essential to meet the COP28 commitment to transition away from fossil fuels and free up public money for climate action – this progress has not been matched by a similar increase in good quality renewable energy finance. While CETP signatories’ fossil fuel finance has been cut by two-thirds, clean energy finance has only increased by $3 billion (16%).

Civil society organizations are welcoming today’s action plan, under which signatories commit to provide targeted and accessible international public support for clean energy, including by developing a joint target for such support for Emerging Markets and Developing Economies (EMDEs). Civil society organisations note that for true leadership signatories should also step up to support agreement on an ambitious global climate finance target (NCQG) at COP29 that delivers $1 trillion in grant-based climate finance including $300 billion for a just energy transition and other mitigation goals. 

In the ongoing NCQG negotiations, rich countries suggest that private finance can largely cover energy transition finance needs. However, the track record shows that this approach is unlikely to deliver the needed funds or reach the countries or sectors that most need this finance, while it adds to the record-breaking debt crisis in the Global South. 

The CETP clean energy action plan can make a difference by providing grants, not loans and prioritizing the sectors that need this finance most, such as grids and distributed renewables for energy access. It should also offer finance focused specifically on supporting a fair fossil fuel phase-out in fossil-fuel dependent countries and communities.

Statements: 

Bronwen Tucker, Public Finance Lead at Oil Change International, said: 

“The CETP has made substantial progress in phasing out international finance for fossil fuels, and with signatories now committing to this Clean Energy Action Plan, it’s time to step up work to scale up grants and highly concessional renewable energy finance. Today’s Action Plan sends an important signal that countries must go further, and agree on an ambitious wider NCQG here in Baku.”

Natalie Jones, Policy Advisor at International Institute for Sustainable Development,  said: “This Clean Energy Action Plan is a major step forwards for fulfilling the CETP’s original pledge to prioritise international public finance for clean energy. We look forward to seeing signatories’ clean energy plans and will be watching them closely for quality as well as quantity of finance. Grants and highly concessional loans are critical for not further indebting recipient countries.”

Louise Burrows, Head of Government Affairs at the Global Renewables Alliance, said: “The Global Renewables Alliance welcomes the CETP’s push for renewable energy finance, but the gap is clear: while fossil fuel funding dropped by $15 billion, renewables rose by only $3 billion. Public finance is crucial to unlock private investment from the renewables sector, especially in Emerging Markets, where targeted support can dive economic growth, jobs and scale energy access. We are ready to work with CETP signatories to act boldly and bridge this investment gap.”