The gulf between Biden’s domestic commitments and his promises abroad has many environmentalists saying the White House’s first international climate finance plan, unveiled on April 22 during Biden’s climate summit, is underwhelming.
In the plan, Biden commits to double U.S. climate finance to developing countries by 2024 and to triple funding to help poorer nations adapt to climate damages, compared with funding levels during the Obama administration.
However, that doubling of overseas climate funding has already been achieved by countries in Europe and by China in the last four years while the Trump administration sat on the sidelines of global climate finance discussions, said Joe Thwaites, an associate in the World Resources Institute’s Sustainable Finance Center.
Biden’s plan also doesn’t fully close the door on financing for fossil fuels overseas, instead simply encouraging agencies to scale back investments in “carbon intensive” fossil fuel projects in favor of clean energy. The United Kingdom, meanwhile, has already pledged to end all overseas fossil fuel financing.
In addition, Biden’s plan skips directives to one of the U.S. government’s most prominent funders of fossil fuels overseas, the Export-Import Bank.
“It’s one tiny step when we need 10 leaps forward,” said Kate DeAngelis, a senior international policy analyst at Friends of the Earth. “If we don’t see a lot more action to follow up on this, especially announcements from these other agencies, then I think it’s going to be barely different than business as usual.”
DeAngelis said she wants to see concrete commitments to exit fossil fuels from the Ex-Im Bank and development entities such as the U.S. Trade and Development Agency and the Millennium Challenge Corporation.
Currently, Biden’s plan focuses mainly on the U.S. International Development Finance Corporation, which has set a goal to shift its portfolio to net-zero emissions by 2040. Beginning in the next fiscal year, the DFC will ensure one-third of its new investments are climate-focused, the agency said.
The DFC, formerly the Overseas Private Investment Corporation until 2019, has already been scaling up renewable energy investments. During the Obama administration, its renewable energy investments reached more than $1 billion on average per year, DeAngelis said, adding she expects that amount to continue to increase under Biden.
Ultimately, multilateral development banks such as the DFC and others find themselves in a similar situation as big U.S. corporate banks at which renewable energy investments make better business sense than fossil fuel investments, said Steven Rothstein, managing director…
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