Leading banks have resisted agreeing to end financing of all new oil, gas and coal exploration this year, despite the International Energy Association (IEA) saying that a ban on such projects is necessary to reach net-zero emissions by 2050.
The IEA’s World Energy Outlook report, published today, warns that progress towards the clean energy transition is currently too slow to put global emissions into a sustained decline, and “new oil and gas fields and coal mines are not compatible with limiting warming to 1.5ºC”.
Negotiators with the Glasgow Financial Alliance for Net Zero (GFANZ), an initiative led by former Bank of England governor Mark Carney, have been trying to secure commitments from financial institutions that would bring them into line with the IEA’s analysis. But leaked messages (£) suggest that the signatories are pushing for a less ambitious agreement.
The alliance was formed in April and has so far attracted support from nearly 300 financial institutions with assets of $90tn. It has come under criticism for membership criteria that some campaigners deem too lax, with climate groups accusing it last week of granting membership to some of the “world’s top backers of fossil fuels”.
As well as calling for an end to new fossil fuel exploration, today’s IEA report says spending on clean energy must triple in order to reach net-zero emissions. It stresses the role of private finance in this effort, calling for the mobilisation of funding from banks and the “enormous pools of capital in financial markets”.
“Transition‐related spending is gradually picking up, but remains far short of what is required to meet rising demand for energy services in a sustainable way,” the report says.
Earlier this week, GFANZ made a series of recommendations to G20 governments on achieving net-zero emissions, including reform of global financial regulations to support the net-zero transition, introducing mandatory climate reporting and “unlocking the trillions of climate finance required to support developing countries”.
This page was last updated October 13, 2021
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