G7 Props Up Fossil Fuel Industry With 'No-Strings' Cash During Pandemic: Report
Despite pledges to “build back better,” these countries have reinforced a status quo of pollution.
As leaders of G7 countries gather in the United Kingdom for their annual summit June 11, they’ll discuss how they can “build back better” to advance climate action in the aftermath of the COVID-19 pandemic.
But an analysis of COVID-19 relief funds has found that countries have already hampered this goal by heavily supporting the fossil fuel industry over the past year when they could have invested in a just transition away from fossil fuels, according to a report by the think tanks the International Institute for Sustainable Development and the Overseas Development Institute and the nonprofit Tearfund.
In fact, members of the G7 — Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States — have spent $187 billion to support coal, oil and gas, compared to $147 billion spent to support clean sources of energy like wind and solar since the pandemic began. An estimated $8 out of every $10 sent to fossil fuels have come with “no strings attached,” meaning recipients could spend the money however they saw fit, when emissions reductions and other measures could have easily been imposed.
"Investing in renewable energy and energy efficiency should be a top priority to decarbonize the G7 economies,” said Lucile Dufour, senior policy adviser at IISD, in a statement. “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, toward a just and fossil free recovery."
G7 countries hold immense political power and have the ability to shape the course of global events through investments, agreements, and collective action. What happened during the COVID-19 pandemic is a good example of this potential. G7 countries pledged $4.3 billion to secure vaccines for low-income countries, but at the same time refused to relax vaccine patents that would have done far more to ensure vaccine equity.
This sort of inconsistency occurs in G7 climate policies as well. While making bold pledges to achieve net-zero emissions, G7 countries continue to cause disproportionate harm to the planet. The report notes how G7 countries account for around 10% of the global population, yet release a quarter of the greenhouse gas emissions responsible for global warming. G7 countries also have some of the highest resource consumption and waste generation rates in the world.
The COVID-19 pandemic presented G7 countries with an opportunity to break from this model, but they largely failed to, according to the report.
“G7 countries’ failure to green their COVID-19 recovery is a major missed opportunity, both in terms of achieving a fast decarbonization of their economies and creating jobs,” Angela Picciariello, senior research officer at ODI, said in a statement. “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.”
The report argues that countries could have used relief funds to pressure the fossil fuel industry to reduce emissions, invest in renewable energy, and engage in a just transition.
Instead, G7 countries only directed around 10% of relief funds to “green” activities. More money was spent bailing out transportation companies and the fossil fuel industry. The US and Canada, in particular, directed the most funds to coal, oil, and fracked gas companies.
The upcoming G7 summit presents countries with another opportunity to phase out fossil fuels and invest in clean energy.
The researchers encourage countries to spend at least 40% of COVID-19 recovery money going forward on “green policies and measures,” up from the current figure of 22%, while also easing and erasing the debt of developing countries to allow them to invest in green recoveries as well.
“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,” Paul Cook, head of advocacy at Tearfund, said in a statement. “Choices made now by the G7 countries will either accelerate the transition toward a climate-safe future for all, or jeopardize efforts to date to tackle the climate crisis.”