Significant financial support for fossil fuel expansion continues, even in the face of global climate change commitments. Major banks, including some of the largest in the world, collectively finance the industry to the tune of hundreds of billions of dollars annually. Since the Paris Agreement in 2015, these financial institutions have poured over $1.8 trillion into fossil fuel projects, with a notable portion earmarked for expansion efforts like new pipelines, drilling operations, and liquefied natural gas terminals. Individual banks have funneled tens of billions each year into these ventures, often outpacing their competitors in supporting companies driving fossil fuel growth.
Governments, too, remain deeply entangled in this expansion. Through extensive subsidy programs, they seek to offset rising energy costs for consumers while inadvertently encouraging continued reliance on oil, gas, and coal. Global fossil fuel subsidies have remained in the hundreds of billions annually, with some years reaching over a trillion dollars. These subsidies not only create a financial cushion for fossil fuel industries but also burden national budgets and undermine environmental goals. When accounting for the hidden costs, including environmental degradation and public health impacts, the true financial toll is staggering, running into several trillions of dollars annually.
The dual forces of private financial institutions and governmental policies create a robust system of support for fossil fuel projects, complicating the transition to renewable energy. Despite public declarations of climate responsibility, the sheer volume of funding directed toward fossil fuel expansion illustrates the tension between economic interests and environmental imperatives.