BAKU, Azerbaijan, Jan.11
By Leman Zeynalova – Trend:
Government money going into fossil fuels is potentially drying up globally, Trend reports with reference to Westwood Global Energy Group.
“In 2009, 23 rich countries, including the United States, Japan and Germany, promised to pay developing nations $100 billion a year in climate change mitigation funding. More than a dozen years later, the developing nations are still waiting. It remains unclear if the money that was pledged will be delivered. However, climate-related donor finance is on an upward trend, increasing from $52.4 billion a year in 2013 to $79.6 billion in 2019,” reads a report released by Westwood Global Energy Group.
The company notes that perhaps more importantly for oil and gas companies, the government money going into fossil fuels is also potentially drying up.
“China notably pledged to stop funding foreign coal projects in September last year and in December the White House ordered US agencies to curb overseas engagements in fossil fuel schemes. Such international funding bans are a low-risk, high-reward move for headline-hungry leaders. While their true impact may be hard to gauge, they will undoubtedly make it harder to finance oil and gas projects,” the company analysts note.
Westwood Global Energy Group points out that national decarbonisation targets will get more ambitious.
“Arguably one of the main things to come out of the 2021 United Nations Climate Change Conference, or COP26, was an agreement on the need to return to the negotiating table this year. For national leaders, there is pressure from peers not to come away from COP27 with vague promises and watered-down targets,” said the report.
The company analysts note that while the outcome of any COP is hard to determine in advance, methane emissions emerged as a soft target last year and are likely to receive further focus this year.
‘Coal’s days are also numbered, after which attention is likely to move to the decarbonisation and future role of gas. The EU Taxonomy discussions now taking place illustrate how challenging it may be to get gas to be seen as a transition fuel. And then, of course, there will be new nationally determined contributions towards net zero.
What will emerge on this front is anyone’s guess, although research suggests China could be among the countries bringing carbon neutrality dates forward,” the report says.
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