Fossil Fuel Projects (Hansard, 20 October 2003)

§ Mr. Hancock
To ask the Secretary of State for International Development what his policy is on the provision of(a) loans and (b) loan guarantees by multilateral development banks to fossil fuel projects overseas; and if he will make a statement. [132494]

§ Hilary Benn
The UK is a shareholder in a number of multilateral development banks which provide loans and loan guarantees for fossil fuel projects. The Government's policy is to ensure that these institutions comply with their own policies and procedures in all projects for which they provide finance. In considering whether to provide loans or loan guarantees this should include an assessment of the possible social and environmental impacts. In addition, our policy is to fully understand the developmental implications of fossil fuel projects. We are particularly concerned that the management of revenues from such projects occurs transparently and with a positive developmental impact. We hope that initiatives such as the Extractive Industries Transparency Initiative will help to achieve this.
363W

§ Dr. Vis
To ask the Secretary of State for International Development what his policy is towards the provision of(a) loans and (b) loan guarantees by multilateral development banks to fossil fuel projects overseas; and what amendments he has made to it because of concerns about climate change. [132501]

§ Hilary Benn
The UK is a shareholder in a number of multilateral development banks which provide loans and loan guarantees for fossil fuel projects. The Government's policy is to ensure that these institutions comply with their own policies and procedures in all projects for which they provide finance. In considering whether to provide loans or loan guarantees this should include an assessment of the possible social and environmental impacts such as climate change. In addition, our policy is to fully understand the developmental implications of fossil fuel projects. We are particularly concerned that the management of revenues from such projects occurs transparently and with a positive developmental impact. We hope that initiatives such as the Extractive Industries Transparency Initiative will help to achieve this.

§ Mr. Drew
To ask the Secretary of State for International Development whether his Department has carried out an analysis of the extent to which his Department's support for fossil fuel investment is consistent with(a) the United Kingdom's obligations under the Kyoto Protocol and (b) the Government's environmental aims. [133630]

§ Hilary Benn
The UK government are committed to taking a lead in meeting obligations under the Kyoto Protocol, including reductions of carbon dioxide emissions. At the same time, we recognise the rights of other sovereign states to fulfil their own legitimate development needs. In considering support for fossil fuel based investments, it is standard procedure for DFID to liaise with other relevant Government Departments to ensure balance arid consistency between these objectives. In addition, our policy is to ensure that lending institutions take account of possible social and environmental impacts such as climate change as part of their policies and procedures in assessing fossil fuel projects, before providing loans or loan guarantees.

§ Mr. Drew
To ask the Secretary of State for International Development what is the total value is of support given by his Department to overseas projects for(a) the extraction of fossil fuels and (b) the development of renewable energy in each of the last three years. [133631]

§ Hilary Benn
DFID has not been involved in the direct funding of fossil fuel extraction projects over the past three years, although we are occasionally asked to comment on the proposals of lending institutions. While recognising that countries are entitled to exploit their own natural resources, either for export purposes or to meet domestic energy requirements, full account should be taken of possible social and environmental impacts, including climate change. Our policy is to ensure that institutions providing loans or guarantees take such factors fully into account.
On the renewable energy issue, DFID has funded about £3.6 million of research projects over the past 10 years, about half of this over the past three years. We have about £500,000 of project work still in progress.
364W

§ Dr. Vis
To ask the Secretary of State for International Development what the total value of support is from his Department to overseas projects for(a) the extraction and transport of fossil fuels and (b) the development of renewable energy in 2003–04. [132502]

§ Hilary Benn
DFID has not been involved in the direct funding of fossil fuel extraction projects over the past three years, although we are occasionally asked to comment on the proposals of lending institutions. While recognising that countries are entitled to exploit their own natural resources, either for export purposes or to meet domestic energy requirements, full account should be taken of possible social and environmental impacts, including climate change. Our policy is to ensure that institutions providing loans or guarantees take such factors fully into account.
On the renewable energy issue, we have about £500,000 of research project work currently in progress, having funded about £3.6 million of such projects over the past 10 years.

§ Dr. Vis
To ask the Secretary of State, Department for International Development what assessment he has made of the extent to which his Department's support for fossil fuel investment is consistent with(a) the obligations under the Kyoto Protocol and (b) the goal of reducing UK carbon dioxide emissions by 2050. [132503]

§ Hilary Benn
The UK Government are committed to taking a lead in meeting obligations under the Kyoto Protocol, including reductions of carbon dioxide emissions. At the same time, we recognise the rights of other sovereign states to fulfil their own legitimate development needs. In considering support for fossil fuel based investments, it is standard procedure for DFID to liase with other relevant Government Departments to ensure balance and consistency between these objectives. In addition, our policy is to ensure that lending institutions take account of possible social and environmental impacts such as climate change as part of their policies and procedures in assessing fossil fuel projects, before providing loans or loan guarantees. I refer the hon. Member for Finchley and Golders Green to the reply to his question Hansard ref 132501 on this matter, at column 359W.
The UK Energy White Paper sets out four core objectives of UK Energy Policy: Tackling Climate Change, Energy Security, Cutting Fuel Poverty and Competitiveness. DFID is working closely with other Government Departments, notably FCO, DTI and DEFRA, to ensure a co-ordinated Whitehall approach to international energy issues.