This week, OECD governments are in Paris negotiating an agreement that could end $41 billion in annual oil and gas export finance. Crucially, this deal would be immune to political reversals, even under a potential future Trump administration. This agreement represents a crucial step toward breaking through the ongoing discussions about the trillions in grant-based climate finance that rich countries owe the Global South.

The proposed OECD agreement would be particularly significant due to its binding nature. It could only be undone if all negotiating countries agreed to reverse course, making it effectively "Trump-proof."

A Make-or-Break Moment

For President Biden, this is a final opportunity to fulfill his 2021 executive order to end international fossil fuel finance. A majority of OECD countries, including the EU, UK, Canada, Norway, New Zealand, and Australia, have already championed a proposal to end oil and gas export finance and are eager to reach an agreement.

However, Biden's actions this week will be decisive in whether this progress can be achieved. High-level EU officials have already reached out to the Biden administration, urging them to make the final call to push the proposal over the line. The Biden administration's influence is now crucial to overcoming the opposition from laggard countries, including South Korea and Turkey.

The U.S. has previously demonstrated the power of multilateral leadership on export finance. In 2015, the Obama administration successfully led an OECD policy to end financing for coal-fired power plants—an agreement that the first Trump administration was unable to undo. Biden now has the chance to replicate this success by securing a permanent safeguard for climate progress with oil and gas.

Pushing for Public Money to Move Away from Fossil Fuels

This potential agreement builds on a growing shift in international energy finance. The Clean Energy Transition Partnership (CETP), launched at COP26 in Glasgow, has already seen remarkable success. With 41 signatories, including major fossil fuel financiers like Canada, Germany, and Norway, CETP members have committed to ending international public finance for fossil fuels. Most members have followed through, reducing international fossil fuel finance by up to two-thirds—around $15 billion annually.

Though these numbers may seem small, the impact is significant. Government-backed financial institutions shape energy markets by signaling national priorities. Public financing, often offered at below-market rates, reduces financial risks for private investors and increases the likelihood of project success. In fact, 82% of LNG infrastructure built over the past decade received public support from G20 export credit agencies.

The timing is crucial: this is Biden's last opportunity to uphold international commitments to end public fossil fuel financing.

The International Energy Agency's Net Zero roadmap shows that global electricity systems must be nearly fossil-fuel-free by 2040 to have a 50% chance of limiting warming to 1.5°C. New investments in upstream gas projects or LNG infrastructure can no longer be justified in this scenario.

A Step Toward an Ambitious COP29 Deal

This OECD agreement could also help solidify other important wins at COP29 in Baku, where countries must commit to delivering substantial climate finance, including support for a just transition away from fossil fuels.

Rich countries owe trillions in grant-based finance to the Global South for climate action. Developed nations argue that they lack sufficient funds and claim that large amounts of private finance, mobilized through small amounts of public money, must cover mitigation finance needs, including for an energy transition. However, this approach places the burden on the Global South, which is unjust given that these countries did not cause the crisis.

The track record of this approach shows that it fails to mobilize the necessary funds, deepens unsustainable debts, and does not address the countries and sectors most in need, such as public transportation and support for workers and communities dependent on fossil fuels. This underscores the need for grant-based finance, not just for loss and damage and adaptation, but also for a just energy transition.

The world has enough wealth to fund the urgent climate action needed for a livable planet. The 10 richest individuals alone hold over $1 trillion in combined wealth.

Analysis by Oil Change International (OCI) shows that by ending fossil fuel handouts—through deals like the OECD agreement—holding polluters accountable, and changing unfair global finance rules, countries could mobilize over $5 trillion for climate action at home and abroad, as well as for other public policies.

The Path Forward

According to the IPCC, a phase-out of fossil fuels is technically feasible and relatively low-cost. In many parts of the world, solar and wind energy are already cheaper than fossil fuel alternatives. These energy sources avoid volatility caused by climate damages or fiscal instability and help create a more secure energy system in an age where fossil fuels are often controlled by autocrats and dictators.

The coming days bring critical opportunities. Right now in Paris, Biden must support an OECD oil and gas export finance ban. In Baku, countries must adopt an ambitious new climate finance target. It's time for governments to stop defending fossil fuel interests and fulfill their responsibility to protect people and the planet.