Stop funding climate change and investing in fossil fuel projects overseas – Ban Ki-moon, the Former UN secretary-general, has urged Britain. He also said that it would serve as a testimony of the commitment of the British Prime Minister towards action on climate change.
UK’s export credit agency invested billions of pounds supporting the businesses dealing in oil and gas schemes around the world in recent years. It is a matter of grave concern for the former UN secretary-general.
According to Ban “These figures and policies are hard to reconcile with the UK’s commitments under the Paris agreement,” as per the international climate deal he forged as UN chief in 2015.
In a comment piece for the Guardian, he wrote:
The time has come for the UK to change course, in the interests of the whole world.
Mark Carney, the Governor, Bank of England, already warned that climate change would lead to financial crises and the funding was at odds with the warning as per Ban.
Ban rarely makes any comment on the policies of individual countries related to specific climate change and believed that the UK could continue to lead on the issue.
However, he said: “The UK now faces a crucial opportunity to live up to the prime minister’s words [on climate action] and prove it is serious about phasing out the use of fossil fuels worldwide, and not only on its own territory.”
UK’s export credit agency helps companies doing business overseas by providing lines of credit and insurance. It is for the first time that the former South Korean diplomat comments on UK Export Finance (UKEF) and singled out a country’s credit export agency. He said, “There is now a growing consensus that fossil fuels should not be funded in any way by export finance organisations.”
Ban who is known as the Elders, being a part of a group of former world leaders cited the policy of World Bank on oil and gas financing and the Swedish equivalent of UKEF’s decision of bringing funding fossil fuel companies to a halt.
Mary Creagh, chair of a committee of MPs investigating the scale and impact of UKEF funding for oil and gas schemes, said: “Mr Ban is right that UKEF’s support for fossil fuel projects overseas is incompatible with the UK’s leading role in the fight against climate change.”
As per the Environmental Audit Committee, UKEF was estimated to have given support of £551m to fossil fuel production between 2014 and 2016. Between 2010 and 2014, despite the pledge of the coalition government to bring an end to funding such “dirty” projects, it invested more than 99% of its budget for energy to fossil fuels.
Following the agency’s “overwhelming” support for fossil fuel projects, Labour stated that if it came to power, it would redirect UKEF towards the low carbon energy projects.
While opportunities are growing in Asia and South America, UKEF’s exposure to the oil sector has increased according to its current annual report. In 2017, the export credit agency allocated £1.5bn which was more than one-tenth of its budget, for the oil and gas sector.
The agency is also ready to support more overseas projects dealing with fossil fuel. It said, “There is a pipeline of new business in both the oil and gas and petrochemical sectors given the strong credentials of UK exporters in these areas.”
Recently there are many projects that the UK supports including oil and gas fields off the coast of Ghana, software for an oil firm in Argentina, and a major gas pipeline in Oman.
A UKEF spokesperson said: “The UK government’s priority, at home and abroad, is to encourage international opportunities for UK businesses – ensuring they can build fruitful relationships with overseas partners and contribute to economic growth around the world.
“We are committed to high standards of environmental, social and human rights risk management,” the spokesperson added.