European Investment Bank criticised for `hypocrisy` of fossil fuel lending

12 December 2011, Environmental Expert

The world’s biggest lender to energy and climate action projects almost doubled the funds given to fossil fuels between 2007 and 2010, a new report (PDF) published on Thursday reveals.

The European Investment Bank (EIB), a bigger lender than the World Bank, also tripled the lending to renewable energy according to the campaign group behind the report, Bankwatch. But the group said that overall, the bank is failing in its responsibility to further the goals of the European Union, including cutting carbon emissions by at least 20 per cent by 2020.

‘Our study highlights once more the secret hypocrisy at the heart of EU climate action,’ said Piotr Trzaskowski, Bankwatch energy co-ordinator. ‘While the EU appears to be the world’s most progressive actor in the global struggle against climate change, the financial arm of the union is putting billions of euros of public money into energy infrastructure that will lock in countries into a fossil-fuel dependent path for four or five decades. Considering what we are hearing from [the UN climate talks in] Durban this week, if even the EU acts this way, we are tragically on a sure road to disaster.’

The EIB offers loans subsidised by government guarantees, but at the UN climate change negotiations in South Africa on Wednesday, Nicholas Stern told delegates that rich nations were wasting money and disadvantaging renewable energy by giving away tax breaks, loans and other subsidies to the fossil fuel industry. In November, the International Energy Agency warned that on current trends, the world will have built enough fossil fuel burning plants by 2016 to break the 2C limit deemed ‘safe’ by scientists.