Perspectives Climate Research developed a tailor-made methodology to assess and compare export credit agencies (ECAs) and their governments regarding alignment with the Paris Agreement. In this case study, this assessment methodology was applied to the Canadian ECA Export Development Canada (EDC).
This study demonstrates that despite important commitments made at and after COP26 in Glasgow, officially supported export finance in Canada is still not in line with the Paris Agreement. This is largely due to continued domestic support for Canadian fossil fuel value chains. The study provides recommendations for the new Canadian cabinet under Prime Minister Justin Trudeau as well as for EDC itself on how to align the Export Credit Agencies’ portfolio with the objectives of the Paris Agreement.
Moreover, the study discusses key topics of high political currency in Canada, including the question whether EDC’s support for fossil fuel value chains can de facto be considered a ‘subsidy’ under its national mandate as well as in the context of international law under the World Trade Organization (WTO), what the relationship between national Net Zero targets and global 1.5 degree consistency is, and which implications this has for EDC’s portfolio and strategic orientation.
“Based on the findings in our study, we urge the Canadian government to acknowledge the absolute limits to fossil fuel production in a 1.5 degrees warmer world – with strict implications for the mandate and operations of Export Development Canada. The milestone steps taken at and after COP26 went into the right direction; now the phase out of domestic public support for fossil fuel value chains and the massive scale up of well-defined and high-quality cleantech is needed to align officially supported Canadian export finance with the Paris Agreement” says Philipp Censkowsky, researcher at Perspectives Climate Group and lead author of the Canadian case study, which can be accessed here.
Press release in English can be found here.
Press release in French can be found here.