27 June 2019

Net-zero Britain should stop subsidising fossil fuels abroad


The UK made headlines this week, becoming the first major economy to commit to reduce its climate harming emissions to net zero by 2050. Although well received by business and the national farmers union, some critics have raised concerns about what would happen if the rest of the world doesn’t follow suit.

Thankfully those fears already appear to be misplaced. Emmanuel Macron is said to be miffed that the UK beat France to the 2050 net zero target and will be introducing one shortly. New Zealand, Ireland and Spain have announced plans to also cut emissions to net zero by 2050 and Germany has now backed the adoption of an EU-wide 2050 target. Norway and Sweden already have net zero targets in law for 2030 and 2045 respectively.

However, while the UK is ushering in a net zero future that will help to tackle climate change, the Government is subsidising the entrenchment of fossil fuels in other countries.

Earlier this month MPs on the Environment Audit Committee reported that UK Export Finance had spent £2.5 billion financing fossil fuel projects around the world, potentially locking countries into dirty energy infrastructure which undermines our own carbon-cutting efforts at home.

Not only does it not make sense from a climate perspective, it’s also economic folly. If the UK and other developed nations are successful in encouraging countries to follow its lead and legislate to reduce their emissions, many of these fossil fuel projects will become stranded assets. Only 4 per cent of UKEF’s energy funding went to support renewable projects abroad, despite the fact much of the developing world has abundant wind, solar and geothermal resources just waiting to be exploited.

The Government should be rightly proud of its world-leading international aid budget, as former DFID Secretary Andrew Mitchell wrote on CapX recently. But building polluting fossil fuel infrastructure, often with devastating local health impacts, undermines the progress we’ve made on climate change as well as international development. Writing in the Asia Times last year, Nguy Thi Khanh, pointed out that Vietnam’s coal-choked capital city of Hanoi only had 38 days of clean air in 2017 according to the World Health Organisation. She wrote: “Vietnam needs foreign investment, but we do not need to prop up a dying industry.”

There are good reasons why Britain is no longer a smoke-filled land of belching coal stacks. An episode of the Netflix series The Crown documented the appalling conditions of smog-filled London which killed 12,000 people in 1952. The filthy conditions in some UK cities from the last century are thankfully a thing of the past, but we’re in danger of exporting these problems to other countries through UK Government subsidies. In February the former UN Secretary General, Ban Ki-moon, took the rare step of singling out the UK, calling on it to stop funding fossil fuel projects abroad.

In order for climate change to be addressed, developing countries will need to leapfrog the dirty development path taken by the UK and other rich nations. In the same way Africa has bypassed landlines and moved straight to cell phones, a similar jump will be needed on energy. Thankfully renewable technology costs are falling rapidly and with the right support many countries are well placed to harness their natural resources of clean energy.

The UK’s net zero target has likely helped it secure the hosting rights to next year’s global climate summit, COP26, the year in which the Paris climate accord comes into force. As hosts, the UK will have a key role in urging all nations to increase their decarbonisation plans and follow its lead in accelerating the transition to a low carbon economy.

But the UK’s message of a clean, zero emissions future will appear confused and contradictory, if at the same time, it’s spending billions of pounds of taxpayer’s money to finance overseas fossil fuel projects.

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Joe Ware is Communications Manager at Christian Aid.