LONDON (Reuters) - Britain must stop financing fossil fuel projects abroad by 2021 as it undermines the nation’s efforts to combat climate change, a report by lawmakers said on Monday.
The report, which targets financial support provided by the UK Export Finance (UKEF) agency, was published as Britain debates plans to set tougher climate goals and move toward a net zero emissions target by 2050.
“The government claims that the UK is a world leader on tackling climate change,” said Mary Creagh, chair of the Environment Audit Committee, commenting on the report published by the committee.
“But behind the scenes the UK’s export finance schemes are handing out billions of pounds of taxpayers money to develop fossil fuel projects in poorer countries,” she said.
UKEF, which aims to help British businesses win contracts abroad, allocated 96% of its energy sector support, or 2.5 billion pounds ($3.2 billion), to support fossil fuel projects in five years from April 2013, the report said.
“The UK government fully recognizes the importance of tackling climate change and the need for a mix of energy sources and technologies as the world transitions to a low carbon economy,” a UKEF representative said.
The committee said the support was incompatible with Britain’s efforts to reduce greenhouse gases and also carried risks for taxpayers.
Companies could be left with stranded assets as tougher emission reduction targets discouraged fossil fuel use and as renewable energy becomes cheaper.
The Paris climate agreement, adopted by almost 200 nations in 2015, set a long-term goal to limit global warming to “well below” a rise of 2 degrees Celsius above pre-industrial times while striving toward a tougher goal of just 1.5 degrees.
Reporting by Susanna Twidale; Editing by Emdund Blair