The Albanese government has drawn internal criticism at the UN climate talks in Egypt for resisting a global push to end international public subsidies for fossil fuels, with the Labor party’s grassroots environment wing calling the decision “disappointing” and asking for an explanation.
Australia chose not to sign an agreement known as the statement on international public support for the clean energy transition partnership at a public event held at Cop27 in Sharm el-Sheikh on Tuesday. The partnership, created in Glasgow last year, is backed by 36 countries and five public finance institutions that have committed to direct export credit support towards clean energy and away from “unabated fossil fuels”.
Felicity Wade, the national co-convener of the Labor Environment Action Network (Lean), said it made little sense for the government to not join the agreement on export finance given the climate change minister, Chris Bowen, had used a major speech at the conference to call out multilateral development banks, particularly the World Bank, for not doing enough to drive the clean energy transition in the developing world.
Wade said joining the partnership was “important machinery of change” and joining would allow Australia to help build a consensus across the OECD on shifting public finance away from fossil fuels.
“It’s disappointing that the Australian government has decided against joining the clean energy transition partnership,” she said. “While it is great that Chris Bowen has called for reform of multilateral financial institutions to better deliver decarbonisation, it begs the question why Australia hasn’t signed up to ensuring our own international public investments are aligned with shifting from fossil fuels.”
Lean’s call, which is backed by Australian and international climate activists, comes as the Albanese government has signed up to other global commitments to cut methane emissions and end the loss of forests. Bowen announced on Tuesday that Australia had also joined a global offshore wind alliance, which aims to build 380GW of offshore wind capacity by 2030.
Signing the clean energy partnership would probably require the government to rewrite rules that govern Export Finance Australia, which provides public support for overseas developments. It made an initial change to the agency in September when it passed climate change legislation that introduced a requirement that it consider the national emissions reduction target – a 43% cut by 2030 compared with 2005 – in investment decisions.
Australia is not a major player in export credit support for fossil fuels, providing $78m a year, the third lowest in the G20. But campaigners said if the country joined it would build momentum for change within the OECD, increasing the level of support within the organisation to well beyond 50% of members.
Laurie van der Burg, global public finance campaign co-manager at Oil Change International, said she understood Australia’s message had been “not necessarily a no, but a ‘not now’”.
“It’s obviously quite disappointing that they didn’t sign at this event,” she said. “We’re really hoping that Australia might still join during Cop, but this is clearly a missed opportunity.
Van der Burg said in addition to driving the shift to renewable energy, signing the agreement would be a chance for the new Australian government to strengthen its climate change diplomacy as it lobbied to co-host a climate conference with Pacific countries in 2026. Pacific Elders’ Voice, a group of former Pacific leaders, has urged Australia and other countries to commit at Cop27 to ending fossil fuel subsidies.
Bowen did not say directly why Australia had not signed up to the partnership, or whether it might in future, but said it was “proud to have increased its climate and energy transformation ambitions and to have been warmly welcomed by other nations at Cop27 for doing so”.
“Australia is also proud to have announced support for multiple additional international pledges where they support our national and international interests,” he said.
If the current signatories, including the UK, US, Germany, Canada, France and the East African Development Bank, followed through on their offshore finance commitment activists estimate it would shift $US28bn a year out of fossil fuel projects and into clean energy. The pledge applies only to offshore financing, and not domestic fossil subsidies.
