IDEAS home Printed from https://ideas.repec.org/a/spr/climat/v178y2025i3d10.1007_s10584-025-03881-z.html
   My bibliography  Save this article

Public financial institutions in the energy transition: the impact of export credit agencies

Author

Listed:
  • Christian Downie

    (Australian National University)

  • Maxfield J. Peterson

    (Australian National University)

Abstract

Achieving a clean energy transition requires global financial flows to be redirected away from fossil fuels and into renewable energy. While capital market actors and multilateral financial institutions have been the subject of significant scholarly attention, public bilateral financial institutions, especially Export Credit Agencies (ECAs), have been largely overlooked. This is an important oversight given ECAs are the source of billions of dollars of public finance for fossil fuels, which has helped to lock-in recipient countries to fossil fuel energy systems. Using a panel dataset of ECA transactions in the energy sector, we show that despite some improvements in financial flows after the Paris Agreement in 2015, fossil fuel investments remain pervasive and growth in clean energy investments is minimal. To better understand changes in ECA portfolios, we examine the cases of the Export-Import Bank of the United States (ExIm) and UK Export Finance (UKEF). Drawing on elite interviews, we identify three factors that are shaping ExIm’s and UKEF’s capacity to promote renewable energy exports: the extent of political control over the bureaucracy, the size and composition of green industrial bases, and the policy tools available to both ECAs to support the renewables sector. This has important implications for policymakers seeking to green ECA portfolios.

Suggested Citation

  • Christian Downie & Maxfield J. Peterson, 2025. "Public financial institutions in the energy transition: the impact of export credit agencies," Climatic Change, Springer, vol. 178(3), pages 1-18, March.
    • Handle: RePEc:spr:climat:v:178:y:2025:i:3:d:10.1007_s10584-025-03881-z
    DOI: 10.1007/s10584-025-03881-z
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10584-025-03881-z
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10584-025-03881-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jessica C. Liao, 2021. "The Club‐based Climate Regime and OECD Negotiations on Restricting Coal‐fired Power Export Finance," Global Policy, London School of Economics and Political Science, vol. 12(1), pages 40-50, February.
    2. Unruh, Gregory C., 2000. "Understanding carbon lock-in," Energy Policy, Elsevier, vol. 28(12), pages 817-830, October.
    3. Jakob Skovgaard & Kevin M. Adams & Kendra Dupuy & Adis Dzebo & Mikkel Funder & Adam Moe Fejerskov & Zoha Shawoo, 2023. "Multilateral Climate Finance Coordination: Politics and Depoliticization in Practice," Global Environmental Politics, MIT Press, vol. 23(2), pages 125-147, Spring.
    4. P. P. Stoll & W. P. Pauw & F. Tohme & C. Grüning, 2021. "Mobilizing private adaptation finance: lessons learned from the Green Climate Fund," Climatic Change, Springer, vol. 167(3), pages 1-19, August.
    5. Pfeiffer, Alexander & Millar, Richard & Hepburn, Cameron & Beinhocker, Eric, 2016. "The ‘2°C capital stock’ for electricity generation: Committed cumulative carbon emissions from the electricity generation sector and the transition to a green economy," Applied Energy, Elsevier, vol. 179(C), pages 1395-1408.
    6. Andreas Klasen & Roseline Wanjiru & Jenni Henderson & Josh Phillips, 2022. "Export finance and the green transition," Global Policy, London School of Economics and Political Science, vol. 13(5), pages 710-720, November.
    7. Nadia Ameli & Paul Drummond & Alexander Bisaro & Michael Grubb & Hugues Chenet, 2020. "Climate finance and disclosure for institutional investors: why transparency is not enough," Climatic Change, Springer, vol. 160(4), pages 565-589, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Sen, Suphi & von Schickfus, Marie-Theres, 2020. "Climate policy, stranded assets, and investors’ expectations," Journal of Environmental Economics and Management, Elsevier, vol. 100(C).
    2. Vu Minh Ngo & Huan Huu Nguyen & Hiep Cong Pham & Long Hoang Nguyen, 2024. "Engage or retreat? Exploring the determinants of participation in Climate Finance public-private partnerships," Climatic Change, Springer, vol. 177(7), pages 1-30, July.
    3. Louis Daumas, 2024. "Financial stability, stranded assets and the low‐carbon transition – A critical review of the theoretical and applied literatures," Journal of Economic Surveys, Wiley Blackwell, vol. 38(3), pages 601-716, July.
    4. Andreas Klasen & Jan Vassard, 2023. "The new OECD arrangement on export credits: Breakthrough or bad compromise?," Global Policy, London School of Economics and Political Science, vol. 14(5), pages 958-961, November.
    5. Louis Daumas, 2021. "Should we fear transition risks - A review of the applied literature," Working Papers 2021.05, FAERE - French Association of Environmental and Resource Economists.
    6. Wei Jin & ZhongXiang Zhang, 2018. "Capital Accumulation, Green Paradox, and Stranded Assets: An Endogenous Growth Perspective," Working Papers 2018.33, Fondazione Eni Enrico Mattei.
    7. Mignone, Bryan K. & Showalter, Sharon & Wood, Frances & McJeon, Haewon & Steinberg, Daniel, 2017. "Sensitivity of natural gas deployment in the US power sector to future carbon policy expectations," Energy Policy, Elsevier, vol. 110(C), pages 518-524.
    8. Wegner, Marie-Sophie & Hall, Stephen & Hardy, Jeffrey & Workman, Mark, 2017. "Valuing energy futures; a comparative analysis of value pools across UK energy system scenarios," Applied Energy, Elsevier, vol. 206(C), pages 815-828.
    9. Foxon, T. J. & Gross, R. & Chase, A. & Howes, J. & Arnall, A. & Anderson, D., 2005. "UK innovation systems for new and renewable energy technologies: drivers, barriers and systems failures," Energy Policy, Elsevier, vol. 33(16), pages 2123-2137, November.
    10. Curci, Ylenia & Mongeau Ospina, Christian A., 2016. "Investigating biofuels through network analysis," Energy Policy, Elsevier, vol. 97(C), pages 60-72.
    11. Zhang, Hui & Cao, Libin & Zhang, Bing, 2017. "Emissions trading and technology adoption: An adaptive agent-based analysis of thermal power plants in China," Resources, Conservation & Recycling, Elsevier, vol. 121(C), pages 23-32.
    12. Hellsmark, Hans & Hansen, Teis, 2020. "A new dawn for (oil) incumbents within the bioeconomy? Trade-offs and lessons for policy," Energy Policy, Elsevier, vol. 145(C).
    13. Yanguas Parra, Paola & Hauenstein, Christian & Oei, Pao-Yu, 2021. "The death valley of coal – Modelling COVID-19 recovery scenarios for steam coal markets," Applied Energy, Elsevier, vol. 288(C).
    14. Audoly, Richard & Vogt-Schilb, Adrien & Guivarch, Céline & Pfeiffer, Alexander, 2018. "Pathways toward zero-carbon electricity required for climate stabilization," Applied Energy, Elsevier, vol. 225(C), pages 884-901.
    15. Monica Santillan Vera & Lilia Garcia Manrique & Isabel Rodriguez Pena & Angel de la Vega Navarro, 2021. "Drivers of Electricity GHG Emissions and the Role of Natural Gas in Mexican Energy Transition," Working Paper Series 1021, Department of Economics, University of Sussex Business School.
    16. Marzieh Ronaghi & Michael Reed & Sayed Saghaian, 2020. "The impact of economic factors and governance on greenhouse gas emission," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 22(2), pages 153-172, April.
    17. Agarwala, Matthew & Burke, Matt & Klusak, Patrycja & Mohaddes, Kamiar & Volz, Ulrich & Zenghelis, Dimitri, 2021. "Climate Change And Fiscal Sustainability: Risks And Opportunities," National Institute Economic Review, National Institute of Economic and Social Research, vol. 258, pages 28-46, November.
    18. Marletto, Gerardo, 2011. "Structure, agency and change in the car regime. A review of the literature," European Transport \ Trasporti Europei, ISTIEE, Institute for the Study of Transport within the European Economic Integration, issue 47, pages 71-88.
    19. Valeria Costantini & Francesco Crespi, 2013. "Public policies for a sustainable energy sector: regulation, diversity and fostering of innovation," Journal of Evolutionary Economics, Springer, vol. 23(2), pages 401-429, April.
    20. Newbery, David, 2018. "Policies for decarbonizing a liberalized power sector," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 12, pages 1-24.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:climat:v:178:y:2025:i:3:d:10.1007_s10584-025-03881-z. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.