The Sierra Club’s Fossil Free Finance campaign is dedicated to divesting institutional portfolios, the U.S. government…
and governments around the world from fossil fuels. We already know that these fossil fuels are impacting our families, our communities, our climate, our air, our water, and our planet. It has to stop, and the time is now.
We strive to ensure that public institutions phase out all fossil fuel subsidies while simultaneously increasing public investment in transformational clean energy and energy efficiency projects, especially those designed to achieve sustainable energy for all. As such, we call for governments and public institutions worldwide to eliminate all fossil fuel subsidies by 2020.
As we speak, more than $5.3 trillion is being used to subsidize dirty, dangerous, and unnecessary coal, oil, and gas industries around the globe each year. These projects not only exacerbate the climate crisis and cause severe health problems for millions of people, but they are increasingly uneconomical in the face of the booming clean energy sector.
It’s time we move beyond outdated fossil fuels and instead invest in cutting-edge clean energy technology, like the solar and wind industries. Massive fossil fuel interests throughout the world are hell bent on preserving their profits and wasteful subsidies at the expense of our families, communities, and climate.
Together, we can shift the trillions used to prop up dirty, inefficient industries to actually power billions of people with clean, sustainable energy for all.
There is already incredible international momentum for limiting fossil fuel subsidies. In June 2013, as part of the U.S. Climate Action Plan, President Obama committed to strictly limit public financing for new coal projects abroad. Since then, and due in part to our advocacy, all U.S. government and many multilateral institutions now have coal financing restrictions. Last year, the Organisation for Economic Co-operation and Development (OECD) agreed to common standards for export credit agency (ECA) support for coal plants, that will make more than 80 percent of the global coal pipeline negligible for ECA support. And in a joint statement with President Obama, President Xi of China announced that China would “strictly control public investment flowing into projects with high pollution and carbon emissions both domestically and internationally.”
Finally, in December 2015, the 195 member countries of the UNFCCC adopted the Paris Agreement, which establishes the objective of “making finance flows consistent with a pathway towards low greenhouse gas emissions and climate-resilient development.” This put an expiration date on fossil fuels by the end of this century, moving us forward toward tackling the climate crisis, protecting all communities and families from toxic air and water pollution, and providing sustainable, effective energy solutions to power the 1.2 billion people currently living beyond the reach of the inefficient, fossil fuel-centric grid. To date, over 175 nations have signed the Paris Agreement, and governments are rapidly following through on their commitments by presenting their instruments of ratification.
The progress on restricting coal financing internationally is impressive, but must be expanded to close existing loopholes and limit financing for other fossil fuels. Subsidies from governments and public international financial institutions continues to flow to fossil fuel projects, including oil and gas exploration and fossil-fueled power generation.
These projects not only have the potential to destroy the climate, they also have failed the 1.2 billion people living in energy poverty. Large fossil fuel projects are expensive, and operators prefer to sell to existing users and industry, which can afford to pay more and don’t need costly extensions to access the grid. However, the falling price of renewables and advances in off-grid and mini-grid technology offer a new model for energy development that can electrify rural areas today, without waiting for major infrastructure and without polluting our air, water, or climate.
