Norway Commits to End International Public Finance for Fossil Fuels

The Norwegian Prime Minister, Jonas Gahr Støre, has made a significant announcement at the UN COP28 climate summit in Dubai today, formally declaring Norway’s membership in the Clean Energy Transition Partnership (CETP), also known as the Glasgow Statement. With 40 signatories, including major players such as the United States, Canada, and several European countries, this partnership aims to shift billions of dollars annually from fossil fuels to clean energy.

The decision for Norway, a major oil and gas producer, to join this initiative is considered a pivotal moment in the global effort to establish new regulations at the Organisation for Economic Cooperation and Development (OECD) level to halt international fossil finance across the OECD. However, some nations, including the United States, still need to fulfil their commitments to cease international public finance for fossil fuels.

This decision comes shortly after Norway’s endorsement of the Clean Energy Transition Partnership at the 2021 UN climate summit along with 39 other countries and institutions. Their commitment includes discontinuing direct international public finance for fossil fuel projects by the end of 2022, potentially redirecting over USD 28 billion per year into renewable energy.

While this development is viewed as a positive step in addressing climate change, some remain sceptical, particularly regarding Prime Minister Jonas Gahr Støre’s position on new oil and gas licenses. Nevertheless, there is hope that Norway will honour its commitment and potentially go further by pledging to halt new oil and gas licensing and production, aligning with scientific requirements.

Dina Rui, Public Finance Programme Lead at the Nordic Center for Sustainable Finance, has expressed optimism about Norway’s move towards becoming an international climate leader, highlighting the potential for the commitment to result in a win for the climate and contribute to the creation of more domestic green jobs. Given its status as one of the world’s major carbon emissions exporters, Norway’s role in transitioning from fossil fuels to renewable energy is crucial.

Adam McGibbon, Campaign Strategist at Oil Change International, regards Norway’s decision to join CETP as a positive move, marking a significant shift away from using taxpayer-backed funds to support the fossil fuel industry. On a broader scale, this development strengthens an international campaign to establish new rules at the OECD aimed at ending export finance support for fossil fuels.

However, while many countries have upheld their CETP promise to cease international public finance for fossil fuels, others such as the United States, Italy, and Germany have not fully delivered on their commitments. With the US Export-Import Bank continuing to finance fossil fuels, it is evident that there is still work to be done to hold signatories accountable and motivate them to honour their pledges.

Launched at the 2021 UN COP26 Climate Conference in Glasgow, the Clean Energy Transition Partnership was a response to the significant misalignment of public finance for fossil fuels with the goals of the Paris Agreement. It is hoped that the implementation of this partnership will play a critical role in bridging the mitigation finance gap and facilitating emission reductions and a just transition.

In conclusion, Norway’s decision to join the Clean Energy Transition Partnership signifies a step in the right direction towards sustainable energy and climate action. However, it underscores the need for continued international cooperation and accountability to ensure that all signatories honour their commitments to transition away from fossil fuels and towards renewable energy sources.