Finance for fossils – The role of public financing in expanding petrochemicals
Skovgaard, Jakob LU ; Finkill, Guy David LU ; Bauer, Fredric LU
; Åhman, Max
LU
and Nielsen, Tobias
LU
(2023)
In Global Environmental Change
80.
- Abstract
- The petrochemicals industry (mainly plastics and fertilizer production) is expanding, despite increasing attention to the environmental impact of petrochemicals. In our paper, we explore the role public finance plays in the petrochemicals industry. We do so by mapping the public and private financial flows into large-scale petrochemical projects for the decade 2010-20 and discuss the role of public financial institutions for the development of the industry globally. Secondly, we provide a detailed analysis of the roles international and national public finance has in enabling two prominent petrochemical projects: namely the Sadara plant in Saudi Arabia and the Surgil plant in Uzbekistan. The cases are illustrative of the dynamics of state... (More)
- The petrochemicals industry (mainly plastics and fertilizer production) is expanding, despite increasing attention to the environmental impact of petrochemicals. In our paper, we explore the role public finance plays in the petrochemicals industry. We do so by mapping the public and private financial flows into large-scale petrochemical projects for the decade 2010-20 and discuss the role of public financial institutions for the development of the industry globally. Secondly, we provide a detailed analysis of the roles international and national public finance has in enabling two prominent petrochemical projects: namely the Sadara plant in Saudi Arabia and the Surgil plant in Uzbekistan. The cases are illustrative of the dynamics of state interest and involvement in fossil fuel producing countries as well as of lending and guarantees from foreign export credit agencies (ECAs) and development finance institutions, and how such public finance plays an important role in leveraging private finance. Our findings show how public finance for petrochemicals is highly globalized and to a large degree originates in developed countries. As these industrial infrastructures are designed to last decades, the public finance thus strongly contributes to the carbon lock-in of the sector and limits the possibilities for low-carbon investments needed to comply with the UN Paris Agreement. (Less)
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/ff06dbda-636f-4b69-8bcc-4389ffe4d61f
- author
- Skovgaard, Jakob
LU
; Finkill, Guy David
LU
; Bauer, Fredric
LU
; Åhman, Max
LU
and Nielsen, Tobias
LU
- organization
- publishing date
- 2023-05
- type
- Contribution to journal
- publication status
- published
- subject
- keywords
- petrochemicals, finance, plastics, fertilizer, climate change, lock-in
- in
- Global Environmental Change
- volume
- 80
- article number
- 102657
- publisher
- Elsevier
- external identifiers
-
- scopus:85150418027
- ISSN
- 0959-3780
- DOI
- 10.1016/j.gloenvcha.2023.102657
- project
- Petrochemicals and Climate Change: Mapping Power Structures
- language
- English
- LU publication?
- yes
- id
- ff06dbda-636f-4b69-8bcc-4389ffe4d61f
- date added to LUP
- 2023-03-08 10:26:24
- date last changed
- 2024-05-27 14:37:31
@article{ff06dbda-636f-4b69-8bcc-4389ffe4d61f,
abstract = {{The petrochemicals industry (mainly plastics and fertilizer production) is expanding, despite increasing attention to the environmental impact of petrochemicals. In our paper, we explore the role public finance plays in the petrochemicals industry. We do so by mapping the public and private financial flows into large-scale petrochemical projects for the decade 2010-20 and discuss the role of public financial institutions for the development of the industry globally. Secondly, we provide a detailed analysis of the roles international and national public finance has in enabling two prominent petrochemical projects: namely the Sadara plant in Saudi Arabia and the Surgil plant in Uzbekistan. The cases are illustrative of the dynamics of state interest and involvement in fossil fuel producing countries as well as of lending and guarantees from foreign export credit agencies (ECAs) and development finance institutions, and how such public finance plays an important role in leveraging private finance. Our findings show how public finance for petrochemicals is highly globalized and to a large degree originates in developed countries. As these industrial infrastructures are designed to last decades, the public finance thus strongly contributes to the carbon lock-in of the sector and limits the possibilities for low-carbon investments needed to comply with the UN Paris Agreement.}},
author = {{Skovgaard, Jakob and Finkill, Guy David and Bauer, Fredric and Åhman, Max and Nielsen, Tobias}},
issn = {{0959-3780}},
keywords = {{petrochemicals; finance; plastics; fertilizer; climate change; lock-in}},
language = {{eng}},
publisher = {{Elsevier}},
series = {{Global Environmental Change}},
title = {{Finance for fossils – The role of public financing in expanding petrochemicals}},
url = {{http://dx.doi.org/10.1016/j.gloenvcha.2023.102657}},
doi = {{10.1016/j.gloenvcha.2023.102657}},
volume = {{80}},
year = {{2023}},
}