Overseas Development Assistance: Fossil Fuel Subsidies

Lord Purvis of Tweed Excerpts

Tuesday 15th May 2018 Lords Chamber

[Lord Bates]

Energy is critical. I want to make absolutely sure that I got out the last words in my previous answer. As I sat down, I referred to fossil fuel subsidies, which the overseas development assistance system does not deal with. The noble Lord is absolutely right: power is incredible. You cannot have economic development at the pace we want to see or, often, the healthcare systems that people need without access to energy. That is why the CDC is right to invest heavily in bringing extra power plants on line. Some 5,000 megawatts that the CDC has invested in is currently under construction or coming online. Overwhelmingly, it is in favour of renewable energy because we believe that, in terms of economic benefits and costs, it provides the best opportunity for developing countries in the future.

[Lord Purvis of Tweed (LD)]

My Lords, the UK’s shareholding in the Asia Infrastructure Investment Bank is scored from overseas development assistance funding from DfID. While the bank itself has a strategy of being lean, clean and green, it still invests in fossil fuel projects; granted, not coal, but nevertheless fossil fuels. What is the UK’s position in multilateral organisations that it directly supports where there could well be projects in which, as part of the finance mechanism, there is a subsidy element?

[Lord Bates]

It is a good point. The noble Lord points to the Asia Infrastructure Investment Bank, but there are some tremendous examples. For example, the African Development Bank lent 100% to renewables in 2017. Progress is being made. There is general agreement in the international community that we need to move away from fossil fuels to renewables because that is what the STGs call for—STG7 is about clean and sustainable energy available to all—and what the Paris climate accord calls for.