The EU Wants Fossil Fuel Firms To Contribute To Climate Fund

March 7th, 2024

Awake Goy

Authored by Charles Kennedy via OilPrice.com,

Oil and gas companies could be a source of additional funding for a UN climate financing to help developing economies cope with the consequences of climate change, according to a draft EU document seen by Reuters.

After failing so far to establish a clear-cut framework of how much wealthy developed nations should contribute to a fund to help developing economies, the next COP summit in Azerbaijan at the end of this year is seen as the deadline for reaching some kind of a deal.

The COP29 climate conference in Baku, Azerbaijan, is expected to decide in November if the climate finance goal should include only public funding, or raise funds from the private sector and international institutions, too.

The EU, which aims for carbon neutrality by 2050, is looking at the fossil fuels sector for potential additional contributions to these funds.

“Recognising that public finance alone cannot provide the quantum necessary for the new goal, additional, new and innovative sources of finance from a wide variety of sources, including from the fossil fuel sector, should be identified and utilised,” according to the draft EU statement which Reuters has seen and which has been prepared for a meeting of the foreign ministers of the bloc later in March.

Developed economies need to provide at least $1 trillion per year to climate finance for developing countries to meet the national and global climate targets, one of the biggest developing economies and a major carbon polluter, India, said in a proposal to the United Nations last month.

Developed countries have pledged to support developing economies with funding to address climate change and reduce emissions. Developing countries have been arguing for years that they cannot meet climate goals without substantial international mobilization of finance. In addition, the worst effects of climate change are being felt in many developing and very poor countries that don’t have the financial means to recover and build resilience amid extreme weather events and natural disasters.

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