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The EU Wants Fossil Fuel Firms to Contribute to Climate Fund

Oil and gas companies could be a source of additional funding for a UN climate financing to help developing economies cope with the consequences of climate change, according to a draft EU document seen by Reuters.

After failing so far to establish a clear-cut framework of how much wealthy developed nations should contribute to a fund to help developing economies, the next COP summit in Azerbaijan at the end of this year is seen as the deadline for reaching some kind of a deal.   

The COP29 climate conference in Baku, Azerbaijan, is expected to decide in November if the climate finance goal should include only public funding, or raise funds from the private sector and international institutions, too.  

The EU, which aims for carbon neutrality by 2050, is looking at the fossil fuels sector for potential additional contributions to these funds. 

“Recognising that public finance alone cannot provide the quantum necessary for the new goal, additional, new and innovative sources of finance from a wide variety of sources, including from the fossil fuel sector, should be identified and utilised,” according to the draft EU statement which Reuters has seen and which has been prepared for a meeting of the foreign ministers of the bloc later in March.  

Developed economies need to provide at least $1 trillion per year to climate finance for developing countries to meet the national and global climate targets, one of the biggest developing economies and a major carbon polluter, India, said in a proposal to the United Nations last month.

Developed countries have pledged to support developing economies with funding to address climate change and reduce emissions. Developing countries have been arguing for years that they cannot meet climate goals without substantial international mobilization of finance. In addition, the worst effects of climate change are being felt in many developing and very poor countries that don’t have the financial means to recover and build resilience amid extreme weather events and natural disasters.

By Charles Kennedy for Oilprice.com

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  • Mamdouh Salameh on March 04 2024 said:
    For many years developed countries have been promising to contribute funds to help developing countries cope with the consequences of climate change but they never delivered on their promises.

    Now they want fossil fuel producers to contribute funds to help developing countries in what could be interpreted either as a blatant attempt to reduce their own contribution and having the fossil fuel producers provide the balance or as a tax to be paid by them. Either way, it won't pass.

    But since the developed countries are responsible for most of the emissions compared with a very small contribution by developing countries, a better and fairer deal is for the developed countries to pay $1.0 trillion needed to help the developing countries with fossil fuel exporting countries committing themselves to invest heavily in the latest carbon-catching technology.

    Any Western countries imposing taxes on oil and gas exports would be refused any delivery of of both. Nobody should expect fossil fuel exporting countries to contribute part of their livelihood to help Western countries pay for their emissions.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert




    Developed economies need to provide at least $1 trillion per year to climate finance for developing countries to meet the national and global climate targets, one of the biggest developing economies and a major carbon polluter, India, said in a proposal to the United Nations last month.

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