EU looks to fossil fuel sector for climate funds
• Draft document casts wide net in search for contributions to poor nations
The EU is set to call for the fossil fuel industry to help pay for fighting climate change in poor countries under a UN target, a draft document shows, as nations prepare for talks later in 2024 on a global finance goal.
This year’s UN climate negotiations in Baku, Azerbaijan, in November, are the deadline for countries to agree on a new goal of how much wealthy, industrialised nations should pay poorer ones to adjust to the most severe effects of a hotter world.
Given the spiralling costs of deadly heat waves, droughts and rising sea levels, the new climate finance target is expected to be far larger than the existing UN commitment of rich countries to spend $100bn a year from 2020, a target they have failed to meet on time.
A draft statement for a meeting of EU foreign ministers later in March shows the 27-nation bloc will argue that the oil and gas sector should also contribute. The draft EU statement, which sets out the bloc’s priorities for climate diplomacy this year, could change before foreign ministers are due to adopt it later in March.
“Recognising that public finance alone cannot provide the quantum necessary for the new goal, additional … innovative sources of finance from a wide variety of sources, including from the fossil fuel sector, should be identified and utilised,” the draft statement reads.
Countries must decide in Baku whether the new climate finance goal will comprise only public funding or also pull in the private sector and international institutions to try to reach developing nations’ fast-growing needs.
The Organisation for Economic Co-operation and Development has said poor nations’ climate investment needs could reach $1-trillion a year by 2025.
EU climate policy chief Wopke Hoekstra has said he would try to rally support for international fossil fuel taxes. But the road to any such agreement is steep, given the broad support needed for a global measure.
Talks at the International Maritime Organisation last year on a CO2 emissions levy for shipping were opposed by countries including China. The negotiations will continue this month.
The draft document also said the EU would continue to demand that large emerging economies and those with high CO2 emissions and per capita wealth — such as China and Middle Eastern states — should pay towards the new UN climate finance goal.
Beijing has staunchly opposed this in past UN climate talks. The question of which countries must pay is expected to be a core issue at this year’s climate summit.