Public finance for fossil fuels
The Australian government continues to support the expansion of the fossil fuel industry by using public funds to finance fossil fuel companies and projects.
This is partly done through the Export Finance and Insurance Corporation (EFIC) – our national export credit agency (ECA) – while further public financing is provided to fossil fuels through our role in a number of international finance institutions (IFIs). Read more about each of these by clicking the headings below.
The information and figures quoted on this page have been partly guided by a report from Oil Change International and the Overseas Development Institute: Empty promises: G20 subsidies to oil, gas and coal production, released in November 2015.
Dragging our heals on climate progress
Finance ministers from the OECD group of wealthy nations met in Paris in mid-November, reaching an agreement to stop financing the highest polluting new coal power plants.
Originally proposed by Japan and the US, the deal ensures that all new coal plants will only be eligible for OECD government finance if they have the latest technology and lowest emissions possible, and if cleaner alternatives are unviable.
However, Australia had to be dragged kicking and screaming into the deal, only agreeing after watering it down to allow some small, higher emissions plants to be built in developing countries. It seems the Turnbull government is struggling to throw off Tony Abbott’s pro-coal ideology. Read more about the OECD deal here.
As our close neighbours in Asia continue their period of rapid development over the coming years, we need to ensure that their rising energy demands are met with clean, renewable sources. This deal goes some of the way to ensuring that, but falls short of what is truly needed – a clear plan to completely phase out all government subsidies to fossil fuels in the very near future.
Australia’s recalcitrance on fossil fuel subsidies was again on display at the Paris climate negotiations, where our government officials refused to sign an agreement to phase out fossil fuel subsidies, once again putting the interests of big polluters ahead of our environment, climate and health.