US backs out of promise to end gas investment

CLIMATE WIRE | Dozens of countries rallied around phasing out fossil fuel financing at global climate talks seven months ago. Yesterday, these efforts were undermined by the world’s most powerful economies.

This change illustrates how the fear of losing access to energy imports – due to Russia’s war against Ukraine – is testing the commitment of countries that have been among the staunchest defenders of fight against climate change.

The leaders of the Group of Seven countries – the United States, the United Kingdom, Canada, Germany, Italy, France and Japan – agreed to support public investments in the natural gas sector ” as a temporary response” to the abrupt shortage of global gas supply created by Russia’s fossil fuel pariah status.

The decision announced yesterday at the end of the G-7 summit in Germany threatens to undermine commitments announced by the United States and more than 30 other countries at the climate talks in Glasgow, Scotland, to stop spending energy. public money in international fossil fuel projects at the end of this year (climate wireNovember 4, 2021).

A statement issued by G-7 leaders sought to alleviate those concerns by saying its support for continued gas investment would be “implemented in a manner consistent with our climate goals and without creating ripple effects. lockdown”.

“On the one hand, there is a strong affirmation of the objectives of the Paris agreement and the [climate] ambitions, but those ambitions threaten to be undermined by continued support for gas investments,” said Luca Bergamaschi, executive director of ECCO, an Italian climate change think tank.

Gas projects can take years to build, he added, a timeline that raises questions about the emissions impacts of building liquefied natural gas facilities or pipelines that could be in use for decades.

It may not matter to G-7 leaders if investments are directed beyond their borders, as it would not challenge their commitments to largely decarbonize their transport and electricity systems from by 2030 and 2035, respectively.

“We are in an unprecedented situation,” said Domien Vangenechten, policy adviser at E3G in Brussels, who pointed to increased coal use in parts of Europe as leaders seek to deprive Russia fossil fuel revenues. “But at the same time, they haven’t watered down their longer-term strategy. [climate] path.”

G-7 leaders also reiterated their collective commitment to cut emissions of methane – a potent greenhouse gas associated with oil and gas operations – by 30% by 2030. But that commitment, made in Glasgow, is linked to emissions produced domestically, which means that Germany’s investments in a potential gas project in Senegal would not affect Germany’s ability to reduce its methane pollution within its borders.

Climate advocates warn that watering down commitments to end gas funding is hypocrisy and could make it harder for rich countries to tell poorer countries, especially those that need better access to energy, to reduce their dependence on polluting energy sources.

“The question really is who benefits and what is the best investment for this country, looking to the future,” Bergamaschi said. “And do we as Europeans invest in gas in Africa for us or for them? Or for whom?

The G-7 has been more consistent in its messaging on the so-called Just Energy Transition, which aims to provide financing for emerging coal-intensive economies to transition to clean energy. A statement from the leaders of the G-7 and other countries likely to benefit from these partnerships – including India, Indonesia, South Africa and Senegal – refers to “phasing down coal while increasing the share of renewable energies in the energy mix“. It does not mention gas.

“This is very consistent with the climate goals of developed countries and supporting developing countries as well in their transition,” said ECCO’s Bergamaschi.

“Lasting Legacy”?

Six of the G-7 countries, minus Japan, pledged to end international funding for fossil fuels during last year’s climate talks. They all backed that position in a statement from their climate and energy ministers in May.

But rising energy prices and a major supply crisis have made energy security a higher priority than fixing the climate. This is especially true for Germany, which until recently depended on Russia for more than half of its gas supplies.

Its leaders have warned of economic dislocation if gas supplies fall too quickly. Recent shortages have led the country to raise its emergency gas plan to the alarm stage and restart old coal-fired power plants.

But an ECCO report found Europe could cut its gas demand by 40% by 2030 if the European Union passes legislation to cut emissions alongside a bloc-wide plan to wean itself off. Russian energy.

The International Energy Agency, in a report released last year, said no new oil and gas should be developed if the world hopes to prevent global temperatures from rising to levels where storm impacts , increasingly violent heat waves and floods would be irreversible.

A separate report on Africa’s energy outlook notes that industrialization in Africa will depend in part on expanding the use of natural gas, but that would not significantly increase the continent’s share of global emissions. Climate advocates point out that investments in natural gas are often for export to rich countries.

Kaushal Ramesh, an analyst at Rystad Energy, said gas can advance climate goals if used to accelerate coal phase-out and prepare grids for increased renewables.

“However, this must be done with proper emissions accounting and mitigation measures,” including around flaring and fugitive methane emissions, he said in an email.

Yesterday’s declaration to allow continued investment in fossil fuels deviates from what wealthy nations committed to at climate talks, said David Waskow, director of the International Climate Initiative at the World Resources Institute.

“The question is do they mean it when they say there is no lockdown,” he said. “Is this something that creates a lasting legacy for gas in Africa, for example, or is it something else? But it is unclear how the other thing would be achieved.

A Climate Action Tracker analysis published last month found that a rush to build natural gas infrastructure in response to soaring energy prices and Russia’s war in Ukraine would threaten global climate goals. (climate wireJune 8).

That could hurt efforts in the United States and other countries to decarbonize if it means expanding their reliance on fossil fuels. It could also divert money from investments in renewable energy or energy efficiency.

Glasgow’s promise to end international investment in fossil fuels would have freed up $15 billion a year for clean energy, according to a preliminary report.

Reprinted from E&E News with permission from POLITICO, LLC. Copyright 2022. E&E News provides essential information for energy and environmental professionals.

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