The world’s biggest lender to energy and climate action projects almost doubled the funds given to fossil fuels between 2007 and last year, a report released yesterday said.
The European Investment Bank (EIB), a bigger lender than the World Bank, also tripled its lending to renewable energy according to the campaign group behind the report, Bankwatch. However, the group said that overall, the bank is failing in its responsibility to further EU goals, including cutting carbon emissions by at least 20 percent by 2020.
“Our study highlights once more the secret hypocrisy at the heart of EU climate action,” Bankwatch energy co-ordinator Piotr Trzaskowski said.
“While the EU appears to be the world’s most progressive actor in the global struggle against climate change, the financial arm of the union is putting billions of euros of public money into energy infrastructure that will lock in countries into a fossil-fuel dependent path for four or five decades. Considering what we are hearing from [the UN climate talks in] Durban this week, if even the EU acts this way, we are tragically on a sure road to disaster,” Trzaskowski said.
The EIB offers loans subsidized by government guarantees, but at the UN climate change negotiations in South Africa on Wednesday, climate change expert Nicholas Stern told delegates that rich nations were wasting money and disadvantaging renewable energy by giving away tax breaks, loans and other subsidies to the fossil fuel industry. Last month, the International Energy Agency said that on current trends, the world will have built enough fossil-fuel burning plants by 2016 to break the 2oC limit deemed “safe” by scientists.
The Bankwatch report shows EIB fossil-fuel lending rose from 2.8 billion euros (US$3.7 billion) in 2007 to 5 billion euros, while renewable energy loans rose from 1.7 billion euros to 5.8 billion euros. Funding for power transmission infrastructure rose over fourfold over the period, from 1.1 billion euros to 4.6 billion euros. Loans for nuclear power fell from 200 million euros to zero last year.
Bankwatch also criticized the EIB for allotting less than 5 percent of the 49 billion euros over the four years to energy efficiency projects: fossil fuels got seven times more.
“It is imperative that the EIB revises its energy policy in line with climate science, as well as with EU 2050 climate objectives,” Bankwatch EIB co-ordinator Anna Roggenbuck said.
“The EIB should immediately stop lending to coal, the most carbon intensive type of energy generation, and develop and implement a plan to phase out lending to other fossil fuels and prioritize energy efficiency as the most important area of intervention,” she said.
A spokesman for the EIB said energy efficiency is the greenest form of energy there is and that the bank was committed to supporting key investment in projects that support the fight against climate change.
“The EIB adopted a new energy lending policy in 2007 which is based on the two priority areas of climate action and energy security. This new approach ensures a selective approach to coal and lignite-fueled power stations,” the spokesman said.