Good morning and welcome to The Climate 202! Today we’re reading about why a warming world is costing us sleep. 🥱
“ Biden and other world leaders vowed to stop funding fossil fuels overseas. That isn’t happening, activists say.”
Maxine Joselow
with research by Vanessa Montalbano
Good morning and welcome to The Climate 202! Today we’re reading about why a warming world is costing us sleep. 🥱
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Below, we’ll explore how wild weather in California is related to the debt ceiling drama. But first:
Biden and other world leaders vowed to stop funding fossil fuels overseas. That isn’t happening, activists say.
President Biden in Japan on Sunday. (Kiyoshi Ota/Bloomberg News/AP)
In 2021, President Biden directed federal agencies to stop using U.S. taxpayer dollars to fund fossil fuel projects in other countries. And last year, leaders of the Group of Seven industralized nations vowed to follow suit.
In theory, these climate pledges should steer billions of dollars away from coal plants and other polluting projects around the globe. But in practice, Biden and other leaders of the world’s wealthiest economies are failing to follow through on this commitment, climate activists say.
The leaders are “in direct breach of that commitment,” Louise Burrows, energy finance lead at the climate think tank E3G, said in a statement Saturday after the G-7 meeting in Hiroshima, Japan.
Biden administration officials, however, strongly reject the notion that the president has violated his policy on ending overseas fossil fuel finance, pointing to exemptions for independent agencies and projects with compelling national security concerns. (More on that below.)
A ‘DEEP BETRAYAL'
In December 2021, shortly after the United Nations climate summit in Glasgow, Scotland, Biden ordered federal agencies to halt financing for coal plants and other carbon-intensive projects abroad.
But the United States recently broke this promise, climate activists say, when leaders of America’s Export-Import Bank agreed to lend nearly $100 million for the expansion of an oil refinery in Indonesia.
At a closed meeting this month, the bank’s board of directors voted to approve a $99.7 million loan for a project that will help Indonesia’s national oil company increase production.
The company hopes to boost gasoline production by 101,000 barrels per day at its refinery in Balikpapan.
“It was really a deep betrayal,” Collin Rees, U.S. program manager at Oil Change International, told The Climate 202. “It’s absolutely against both the spirit and the letter of Biden’s fossil fuel finance commitments.”
Jeff Ordower, North America director at 350.org, agreed. "In direct contradiction to his posturing and climate finance commitments, President Joe Biden continues to provide loans for fossil fuel extraction abroad, while ramping up its expansion domestically — this is not the behavior of a climate president," he said in a statement.
But Adam Hodge, a spokesman for the National Security Council, told The Climate 202 that the loan “does not reflect administration policy" because the bank is an independent agency that operates under its own statutory charter.
“The administration stands by its commitment to end new direct public support for the international unabated fossil fuel energy sector,” Hodge said in an email.
A spokesperson for the bank was not immediately available for comment.
THE G-7 AND GAS
Besides the United States, other G-7 members have also provided public financing for overseas fossil fuel projects in the past year. For instance, the Japanese export credit agency recently provided $393 million for a gas-fired power plant in Uzbekistan.
Meanwhile, G-7 leaders released a final communiqué Saturday that supports some new investments in natural gas infrastructure abroad.
The nonbinding communiqué states that “publicly supported investment in the gas sector can be appropriate as a temporary response” to the global energy crisis spurred by Russia’s invasion of Ukraine.
But it cautions that gas investments must be “implemented in a manner consistent with our climate objectives,” including the goals of the 2015 Paris agreement.
Rees said this language runs afoul of the G-7's earlier pledge to end overseas fossil fuel finance, adding that new gas infrastructure “will be operating for decades,” despite warnings from leading scientists about the need to eliminate global greenhouse gas emissions by 2050.
A Biden administration official, who spoke on the condition of anonymity because they were not authorized to comment publicly, pushed back on this assessment. The official said this language is “consistent” with Biden’s policy, which contains exemptions for projects with compelling national security concerns, as long as those projects are aligned with the goals of the Paris accord.
Ultimately, the debate over fossil fuel finance is just ramping up. Diplomats and activists will continue tussling over the topic at the next U.N. climate summit in the United Arab Emirates this fall.