The International Institute for Sustainable Development has recently published Turning Pledges Into Action. Glasgow Statement signatories made a commitment to end new international public finance for fossil fuels by the end of 2022 and fully shift their focus toward financing clean energy. Now, it’s time to turn those pledges into action. This report analyses the opportunities and challenges of implementation.
At the global UN climate conference (COP26) in Glasgow in November 2021, 34 countries and five public finance institutions signed a joint commitment to end international public finance (IPF) for fossil fuels and instead prioritize public finance for clean energy by the end of 2022.1 This is the first international political commitment that addresses not only public finance for coal but also for oil and gas. With some of the largest providers of energy finance joining the commitment—including Canada, the United States, Italy, and Germany—the initiative sets a potentially transformative precedent. With the 2022 deadline fast approaching, it is critical that signatories take urgent action to meet their commitments.
This report identifies key opportunities and challenges for signatories to meet their commitments on time and in line with the agreed 1.5°C warming limit:
- The Glasgow Statement could directly shift USD 28 billion in IPF 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 IPF for fossil fuels are in place in Denmark and the United Kingdom, as well as at Swedfund, the French Development Agency, the FMO, and the EIB.
- 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.