A new “dash for gas” directed nearly US$16 billion per year into gas projects in low- and middle-income countries between 2017 and 2019, setting wealthy countries up to break their climate promises while devoting nearly four times more international public finance to a fossil fuel than they did to wind and solar, according to new research by the International Institute for Sustainable Development.
While “leading economies and international financial institutions have promised to help others make the transition away from fossil fuels,” The Guardian reports, the IISD study “shows many of their funding decisions remain stuck in the past,” with 48% of public funding for gas in developing countries coming from the United States, Japan, and China and another 12% from the World Bank.
The report lands just days before the G7 summit begins in Cornwall, UK, with advocates setting expectations for the world’s wealthiest economies on actual, urgent funding priorities like COVID-19 vaccines and international climate finance.
The IISD report “notes that new gas projects are inconsistent with the Paris climate agreement,” The Guardian notes—and, more recently, with last month’s 1.5°C scenario from the International Energy Agency, which shows global gas demand falling 55% by mid-century. “The petrochemical industry has long claimed gas is a ‘bridge fuel’ that is less damaging to the climate than oil or coal. But IISD experts say these arguments have been undermined by growing evidence of the damage caused by methane leaks, the urgency of curbing emissions, and the falling price of renewables.”
“As countries like Australia and the United States massively expand their liquefied natural gas exports, the public money supporting new gas infrastructure looks more geared to serving powerful interests than helping southern countries meet their needs,” said lead author Greg Muttitt.
The IISD research casts gas as a product that is rapidly running out of new markets—and wealthy countries as lavishing subsidies on the industry for no good reason.
“The majority of this finance is going to power generation, where gas is least needed,” even though “renewable-based alternatives for most of its uses are either already cheaper or are expected to be within a few years,” the Winnipeg-based institute writes. “This investment risks driving a new dash for gas that locks countries into a high-carbon pathway, imperilling their economic future and the global climate.”
The global gas industry “increasingly sees its future growth potential in the Global South,” the report adds. But The Guardian says many of those projects “are likely to become stranded assets before the end of their 30-year terms because the International Energy Agency said last month that no new oil, gas, or coal fields should be tapped if the world is to stay within 1.5°C of warming above pre-industrial levels.”