The Biden administration has slapped a ban on financial and diplomatic support for new fossil fuel projects, in what Bloomberg News describes as a “major policy shift designed to fight climate change and accelerate renewable energy worldwide.”
The U.S. government communicated the policy shift in a cable to overseas embassies earlier this month, the news agency reports. “The wide-ranging directive for the first time bars U.S. government backing for future ventures, potentially affecting billions of dollars in annual funding as well as diplomatic and technical assistance.”
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While the policy contains “significant exemptions”, Bloomberg adds, “the policy shift could affect a significant number of potential foreign projects, including terminals in eastern Europe and the Caribbean to receive shipments of U.S. natural gas. It also goes beyond constraining financial aid and rules out other, softer forms of government support, including diplomatic and technical assistance that benefits developers of pipelines, liquefied natural gas terminals and other projects overseas.
But the U.S. will withhold direct support from new projects, it won’t stop fossil fuel companies from pursuing them.
“As long as there is demand for fossil energy products, technologies, and services in global markets, the U.S. government will not stand in the way of U.S. companies that are ready and able to meet those needs,” the cable stated. “The U.S. government will continue to help U.S. energy companies, especially small- and medium-sized businesses, achieve their commercial objectives without compromising global climate ambitions.”
The announcement received mixed reviews from climate policy and campaign groups.
“If this guidance is implemented well and loopholes are minimized, this is a major step forward to align our overseas spending with climate goals,” said Collin Rees, U.S. campaign manager at Oil Change International. After seeing the U.S. spend US$11 billion in public funds on overseas fossil projects since the Paris climate agreement was signed, the new order “shows the Biden administration is taking seriously the joint commitment it signed onto at COP 26 to end international support for fossil fuels.”
“Details matter and we are still missing some fine print,” added Bronwen Tucker, co-manager of Oil Change’s Global Public Finance Campaign. If the exemptions are implemented in good faith, this guidance would end almost all U.S. international finance for fossil fuels.”
But Friends of the Earth U.S. said the guidance was too weak to be useful, with International Finance Program Manager Kate DeAngelis saying it “looks like it was written a decade ago when climate change’s severity was less understood. Despite the Biden administration’s big talk on climate, their overseas fossil fuel finance policies are like they were written by anti-vaxxers and anti-maskers, bereft of necessary protections despite high risks and compelling science.”
350.org U.S. Campaign Manager Brooke Harper called the decision “a major victory for the movement to end fossil fuel finance,” but called on Biden to curtail funding for domestic projects as well as international ones.
