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Press release: G7 nation inject US$190 billion into fossil fuels despite leaders' pledges for a green recovery

New report finds G7 nations have been pumping more money into fossil fuels than clean energy between January 2020 and March 2021, despite pledges to “build back better”

● Coal, oil and gas received US$189 billion in support, compared to $147 billion for clean forms of energy, since the start of the pandemic

● More than 8 in every 10 dollars committed to fossil fuels came with no ‘green strings’ attached: they benefited the dirtiest sectors with no requirements for reducing pollution

● Only 1 in every 10 dollars committed to the Covid-19 response benefited the ‘cleanest’ energies measures, like renewables or energy efficiency

As the UK prepares to host the G7 Summit, a new report by ODI, IISD and Tearfund reveals how G7 nations have - so far - missed major opportunities to green their response to Covid-19. The analysis finds that G7 countries’ energy-intensive investments since the start of the pandemic are at odds with the G7’s own net-zero targets, and with the steep decline in emissions needed to limit global warming to 1.5°C.

The UK’s recent track record highlights the tension between the government’s green ambitions and the Treasury’s actual spending decisions: it made the highest per capita commitments to fossil fuels of the G7, with only 4 per cent of this support having any ‘green strings’ attached. However, the UK has also made several world-leading policy changes since the start of the pandemic, including ending public support for fossil fuel projects overseas and issuing a 2030 ban on new petrol and diesel cars.

The report, Cleaning up their act? G7 fossil fuel investments in a time of green recovery has been published by international relief and development agency Tearfund in collaboration with ODI and IISD, who worked with research organisations in each country to analyse 517 policies approved since the start of the pandemic.

While countries are still battling against Covid-19, Boris Johnson and other G7 leaders have committed to ‘build back better’, using the economic recovery to create a fairer, greener world.

Angela Picciariello, Senior Research Officer at ODI said:

“G7 countries’ failure to green their Covid-19 recovery is a major missed opportunity, both in terms of achieving a fast decarbonisation of their economies and creating jobs. Investments with no ‘green strings’ attached are highly problematic, as they end up benefiting fossil-fuel intensive activities without requirements for any climate targets or reductions in pollution.”

Lucile Dufour, Senior Policy Advisor at IISD said:

"Investing in renewable energy and energy efficiency should be a top priority to decarbonise the G7 economies. But it will not pay off as long as G7 countries continue propping up the fossil fuel industry. At the G7 summit, all countries must shift international as well as domestic support away from fossil fuels, towards a just and fossil free recovery."

Recent signals show that there is hope: Eight out of 11 countries attending the G7 Leaders’ Summit– including Australia, India, Republic of Korea and South Africa – have substantially improved the greenness of their plans over the last year. Yet more progress is required: only four (Canada, France, Germany and the UK) have so far approved plans that will cause more environmental good than harm.

Paul Cook, Head of Advocacy at Tearfund said:

“Every day, Tearfund witnesses the worsening consequences of the climate crisis for communities around the world - farmers’ crops failing; floods and fires engulfing towns and villages; families facing an uncertain future. Choices made now by the G7 countries will either accelerate the transition towards a climate-safe future for all, or jeopardise efforts to date to tackle the climate crisis.”

“The G7 nations rank among the most polluting countries in the world, representing only a tenth of the global population but almost a quarter of CO2 emissions. Their actions can set the scene for success or failure at the UN Climate talks being hosted by the UK in November.”

The report recommends that the G7:

● Adopt a ‘do-no-harm’ principle by ending any support to the production of fossil fuels and by attaching significant ‘green strings’ to any remaining support to fossil fuel intensive sectors

● Dedicate a minimum of 40 per cent of total Covid-19 recovery spending to green policies and measures (the current figure is 22%, according to the Global Recovery Observatory)

● Enable a green recovery for all by continuing to ease the debt burden faced by a rising number of low- and middle-income countries, by doubling climate finance pledges, ending overseas finance to fossil fuels, and by using the G7’s influence on multilateral development banks to align their activities with the Paris Climate Agreement

ENDS