Canada’s pledge to stop funding fossil fuel development doesn’t go far enough, environmentalists say

OTTAWA – Canada’s promise to stop funding fossil fuel projects abroad doesn’t go far enough because it could still allow the government to support oil and gas production in other countries, environmentalists say.

Canada is one of 24 countries that has so far signed a joint pledge at the ongoing climate summit in Scotland to end “new direct support” for the fossil fuel sector outside its borders by the end of 2022. The pledge was applauded by climate activists who have lobbied governments to stop using public dollars to support the production of heavy oil, gas and coal, energy sources that have fueled the climate crisis that is now gripping the world.

But some environmentalists say the declaration has shortcomings, including that it only commits signatories to cut support for fossil fuel production “incessantly.” That word represents a “loophole” that could allow public dollars to continue to flow into projects that offset emissions through carbon capture and storage technology, said Julia Levin, the organization’s senior manager of climate and energy programs. Environmental Defense.

Many environmentalists are wary of carbon sequestration for oil and gas production because they argue that it would allow continued extraction from high-emitting energy sources, even as leading scientists warn that deep and rapid reductions in annual emissions are needed to restrict energy. global warming to less damage. levels.

“We don’t want this to be a loophole for large amounts of money to go into carbon sequestration projects that we know are bogus solutions that will keep us dependent on oil and gas,” Levin said.

The statement does not define what “without ceasing” means. An Environment Canada spokesman told the Star by email on Tuesday that the government is working on its own definition, but noted that a similar international initiative to phase out coal-fired power used the term “incessantly” to refer to plants. They don’t have mechanisms to capture or store emissions.

The spokesperson also said that the government still does not know how much money will be cut for the fulfillment of this promise.

Catherine Abreu, founder and CEO of the nonprofit Destination Zero, said the statement has the potential to be “a game changer” because it shows that Canada and other wealthy countries like Germany, the United Kingdom and the United States are starting to take action. divert the flow of public dollars from the fossil fuel sector.

At the same time, however, he agreed that the use of the term “incessantly” in the pledge leaves room for Canada and other countries to continue funding foreign fossil fuel projects that use technologies such as carbon capture. This, he said, would be like “moving from one problem to another,” since the government could continue to use public money to support the extraction of fossil fuels in other countries that would generate emissions that warm the planet when they finally burn.

TO report published last month by groups such as the United Nations Environment Program, for example, concluded that the fossil fuel production expected by governments in the coming years would cause global warming this century to exceed an increase of 1, 5 C, the target of the 2015 Paris Agreement to which Canada is a signatory.

Another problem with the declaration is that it is restricted to foreign fossil fuel projects, while most of the billions of dollars in Canadian financing for oil and gas goes to domestic production, Abreu said. Export Development Canada (EDC), for example, provided $ 8.1 billion in support to the oil and gas sector last year. About $ 800 million of that was direct financing to international fossil fuel companies and projects, the agency confirmed by email Tuesday.

“Countries are still missing a big piece of the puzzle,” Abreu said.

Canadian public financing of fossil fuels was a political issue in this summer’s federal elections, when the New Democratic Party attacked the Liberals for failing to eliminate subsidies for fossil fuel companies during their time in government. Ahead of this month’s COP, a report by a group called Oil Change International concluded that G20 countries provided more than twice as much public money for fossil fuel projects as renewable energy from 2018 to 2020, and Canada provided more funding to companies. oil and gas companies than any other. other country in the report.

Most of that financing was through EDC, which is mandated to provide credit and commercial support to companies seeking to grow in the international market. But the EDC says it is reducing its annual funding for oil and gas companies, which dropped from $ 12.5 billion in 2018 to $ 8.1 billion last year. Figures provided by the agency show that it provided $ 62 billion to the oil and gas sector from 2015 to 2020.

In a statement last week, the agency said it supports the government’s decision to sign the declaration and would stop “new direct” financing for international fossil fuel companies and their production. Yet at the same time, the agency said it will “continue to support” Canadian companies working to help reduce emissions from foreign fossil fuel companies.

Environment Minister Steven Guilbeault told the Star last month that the government would work out a timeline to eliminate funding from Crown corporations like EDC, an agency that has provided $ 62 billion in support of companies in the United States. oil and gas since 2015. The government has also committed to eliminating all “inefficient” subsidies for oil and gas production by 2023.