Not only is such funding not aligned with Britain’s efforts to reduce greenhouse gases and carries risks for taxpayers but also as a result of stricter emission reduction targets, and as renewable energy becomes cheaper, companies could be left with stranded assets.
On Monday, a report by lawmakers have called on Britain to stop financing fossil fuel projects abroad by 2021, since such funding essentially undermine its efforts to combat climate change.
The report, which targets financial support provided by the UK Export Finance (UKEF) agency, was published as Britain debates plans to set tougher climate goals and move towards a net zero emissions target by 2050.
“The government claims that the UK is a world leader on tackling climate change,” said Mary Creagh, chair of the Environment Audit Committee. “But behind the scenes the UK’s export finance schemes are handing out billions of pounds of taxpayers money to develop fossil fuel projects in poorer countries”.
According to the report, between April 2013 to 2019, the UKEF had allocated $3.2 billion (2.5 billion pounds), to support fossil fuel projects.
This funding was not aligned with Britain’s efforts to reduce greenhouse gases and carries risks for taxpayers.
Companies could be left with stranded assets as tougher emission reduction targets discourage fossil fuel use and as renewable energy becomes cheaper.
The Paris climate agreement, adopted by almost 200 nations in 2015, set a long-term goal to limit global warming to “well below” a rise of 2 degrees Celsius above pre-industrial times while striving towards a tougher goal of just 1.5 degrees.