Turning Pledges Into Action

At the 26th Conference of the Parties (COP 26) of the United Nations Framework Convention on Climate Change, 39 governments and public finance institutions joined the Statement on International Public Support for the Clean Energy Transition, a joint commitment to end international public finance for fossil fuels and instead prioritize public finance for clean energy.

The war in Ukraine and the compounding debt, climate, and energy price crises mean that now more than ever, public finance needs to be prioritized for the energy efficiency and clean energy solutions that can accelerate the transition toward a more secure, sustainable, and peaceful future away from fossil fuel dependence.

This report highlights key opportunities and challenges for signatories to the Glasgow Statement to meet their commitments to end international public finance for fossil fuels by the end of 2022 and instead prioritize public finance for clean energy. It identifies good practices for policies that exclude international public finance for fossil fuels, assesses the current status of implementation of the Glasgow Statement, and gauges the efforts required to implement the statement in line with the 1.5°C global warming limit. The report contains detailed case studies on Ethiopia and Sri Lanka, examining how the Glasgow Statement can play an important role in accelerating a clean and just energy transition in low- and middle-income countries.

This report explores the unprecedented potential and the challenges of implementing the statement. It finds that:

• The Glasgow Statement could directly shift USD 28 billion in international public finance for fossil fuels toward a clean and just energy transition each year.
• Most countries and institutions have yet to publicize Glasgow-aligned policies. Export credit agencies’ pre-existing policies lag behind most and need to be significantly improved.
• The main implementation risks that signatories must avoid are introducing large exemptions for gas support and the lack of concrete strategies to increase transformative clean energy support.
• Good practices exist: robust policies excluding international public finance for fossil fuels are in place in Denmark and the United Kingdom, as well as at Swedfund, the French Development Agency, Financierings-Maatschappij voor Ontwikkelingslanden, and the European Investment Bank.
• Case studies on Ethiopia and Sri Lanka show that the Glasgow Statement can play an important role in avoiding fossil fuel lock-in and accelerating a clean and just energy transition in low- and middle-income countries.

The report recommends that high-income signatories that provide international energy finance should aim to develop and publish updated policies for ending international public finance for fossil fuels and advancing a clean and just energy transition by COP 27. These policies should match the existing best-in-class policies, aligning with the 1.5°C goal. In addition, signatories should use the statement as an opportunity to shift the wider international public finance landscape and work together to secure new signatories to join the statement by COP 27, notably by using their voices and votes as MDB shareholders against new financing for fossil fuel projects and ensuring that regional coalitions or associations align with the Glasgow Statement.