Canada Delivers on Glasgow Statement Pledge With Policy Guidelines to End International Public Finance for Fossil Fuels
In an important step forward for the global energy transition, the Government of Canada has released new policy guidelines to end international public financing for fossil fuels and reprioritize support for clean energy by the end of 2022.
The guidelines come in response to Canada’s COP 26 commitment in The Glasgow Statement on International Public Support for the Clean Energy Transition. Signed by 34 countries and five public finance institutions, the Glasgow Statement was the first multilateral commitment to address public finance for oil and gas.
With today’s announcement, Canada is turning its Glasgow Statement pledge into action. IISD is pleased to congratulate the Government of Canada on a robust measure that will end public financing for all unabated fossil fuel projects abroad involving exploration, production, transportation, storage, and refinement by the end of 2022. These measures will apply regardless of where the project owner is located. The guidelines include certain exemptions, including for natural gas power generation and decarbonization of fossil fuel projects (such as carbon capture, utilization, and storage). That said, the guidelines outline robust conditions for such projects to ensure alignment with a 1.5°C pathway. IISD urges the stringent application of these conditions so that taxpayer dollars are directed to climate solutions.
This policy change is critically important, given that Canada has been one of the largest international fossil fuel financers in the world, providing an average of USD 11 billion per year from 2018 to 2020 through Export Development Canada. According to policy pathways modelled by the Intergovernmental Panel on Climate Change, no new oil and gas fields can be developed, and no new oil and gas exploration can be carried out if the world is to limit global warming to 1.5ºC.
With the creation of this policy, Canada joins other Glasgow Statement signatories with robust fossil fuel exclusion policies, such as Denmark, the United Kingdom, Swedfund, the French Development Agency, the Dutch Development Bank FMO, and the European Investment Bank.
On the heels of COP 27, IISD applauds this progress and looks to the federal government to further align its financial flows with its climate commitments. In the 2021 mandate letters, Canada’s federal government committed to ending both domestic and international public financing for the fossil fuel sector. Canada must take timely action to end domestic subsidies and public financing for fossil fuels within the next year.
For more information on Canada’s international public finance and the Glasgow Statement, see our recent report Turning Pledges Into Action.
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