Unequal Greening: A Study on Export Credit Agency Finance Disparities
Key Ideas
- Study finds ECA energy finance in lower-income countries dropped to below 30% in 2022-23 from 47% in 2013-15, with investments mainly flowing to higher-income countries.
- Share of ECA renewables commitments, particularly offshore wind and green hydrogen, rose to around 40% in 2022-23 from under 10% in 2013.
- OECD countries urged to introduce stricter climate policies and renew international cooperation, especially with non-OECD countries like China, to foster a rapid energy transition.
- Researchers emphasize the need for ECAs to shift towards renewable energy and broaden mandates to support lower-income regions for a just energy transition.
A recent study conducted by researchers from HEC Lausanne, ETH Zurich, and HEC Paris highlighted disparities in the greening of Export Credit Agency (ECA) finance. The study revealed that investments in lower-income countries have decreased significantly, with more funds directed towards higher-income nations. The share of ECA renewables commitments, including offshore wind and green hydrogen, has shown a notable increase. Despite this shift, the complete phasing out of fossil fuel financing remains a distant prospect. The study also pointed out that the direction of ECA energy investments lacks transparency when compared to multilateral development banks. Countries like China, Canada, South Korea, Japan, and China have maintained substantial levels of oil and gas lending, contrasting with European countries committed to aligning with the Paris climate agreement. The researchers suggested that OECD countries should implement stricter climate policies and enhance international collaboration to support a just energy transition. Additionally, they proposed broadening ECA mandates to better assist lower-income regions. The study advocates for ECAs to accelerate the transition to renewable energy through well-designed policies and international partnerships to facilitate a rapid and equitable energy shift.
Topics
Green Hydrogen
Renewable Energy
Energy Transition
International Cooperation
OECD
Climate Finance
Finance Disparities
Fossil Fuel Exclusion
ECA Mandates
Latest News