Moral and economic madness

Not to put too fine a point on it, but U.N. Secretary-General António Guterres gets it exactly right when he says that investing in new fossil fuel infrastructure is moral and economic madness.” Fortunately, there is finally something we can do to help stop it.

Last week, the world’s wealthiest nations met to decide the future of fossil fuel fundingwith the U.S. holding the power to make or break the deal.

At the heart of these discussions within the Organisation for Economic Co-operation and Development (OECD) is a “gentleman’s agreement” led by the European Union. The aim? To halt the flow of export credit funds into new fossil fuel ventures.

“Every dollar that we put of public finance into fossil fuels is putting money into the problem, as opposed to putting the trillions needed into the solutions,” explains Nina Pušić of Oil Change International. “As long as export credit agencies keep putting money into the problem and not the solution, they’re just making the crisis, which is already very bad, worse.”

If this agreement passes, it could squash a major source of financing for fossil fuel projects, potentially transforming the global energy landscape. As a leader in international finance, the U.S. has outsized influence on this decision.

“All eyes are on the U.S.,” says Kate DeAngelis from Friends of the Earth. “Without U.S. commitment, other key players like Japan and Korea might not align, leading to a potential failure in global leadership.” Additionally, U.S. backing often signals to private investors that it’s safe to follow suit, making fossil fuel projects seem less risky and more viable, which hinders renewable energy investments worldwide.

The current level of U.S. support for fossil fuels is substantial. As one of the top fossil fuel subsidizers, American taxpayers contribute $20 billion annually to bail out the fossil fuel industry, not counting hundreds of billions more to recover from climate disasters caused by global warming. Redirecting these funds could accelerate the transition to clean energy, reduce emissions, and spur innovation in sustainable technologies.

Fortunately, there’s already majority bipartisan support among voters for ending fossil fuel subsidies in the U.S., and we’ve taken similar steps before. In 2021, the OECD, with U.S. support, agreed to end export credits for unabated coal-fired power plants. Expanding this ban to include oil and gas under the current proposal is the logical next step.

The proposal on the table isn’t just a financial decision—it’s a commitment to a sustainable future. The U.S. must rise to the challenge and steer the world toward a cleaner, greener path.

Let’s insist our leaders make the right choice.