SANTA MARTA, Colombia (AP) – A lack of funding is one of the biggest barriers to transitioning away from fossil fuels, officials and experts said at a global conference Monday. Columbia It aims to accelerate the transition from fossil fuels to clean energy.
Gathering in the Caribbean city of Santa Marta The issue comes as governments face growing pressure to go beyond their climate pledges and start outlining how they will phase out oil, gas and coal, the main causes of global warming. Although the need for transition has been recognized in the United Nations climate change talks, Although few concrete mechanisms have been developed, Countries and regions will largely be left to deal with economic challenges on their own.
Renewable energies such as solar and wind are often cheaper to generate than fossil fuels, but experts say the cost of transition will depend on other factors. Governments will need to invest heavily in infrastructure such as electricity grids and storage, while replacing existing oil and gas systems that still support much of the economy. In developing countries, high borrowing costs and limited access to financing can make clean energy projects significantly more expensive to construct, even if operating costs are lower in the long run.
The financial system favors fossil fuels
Experts say the root of the problem lies in the structure of the global financial system.
Amiela Sawas, research and policy director at the Treaty on the Non-Proliferation of Fossil Fuels Initiative, said many countries and local governments are not opposed to transitioning away from fossil fuels, but are constrained by debt, limited fiscal space and high costs of financing clean energy projects.
“They’re not ideologically tied to fossil fuels,” she says. “They will have easier access to fossil fuel financing.”
People attend a conference aimed at transitioning away from fossil fuels, Monday, April 27, 2026, in Santa Marta, Colombia. (AP Photo/Ivan Valencia)
People attend a conference aimed at transitioning away from fossil fuels, Monday, April 27, 2026, in Santa Marta, Colombia. (AP Photo/Ivan Valencia)
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In many developing regions, borrowing costs for renewable energy can be several times higher than in wealthy economies, averaging around 15% in some parts of Africa, compared to around 2% in Europe and North America, making it cheaper to continue investing in oil and gas in the short term.
This dynamic can create what researchers describe as a “debt and fossil fuel trap,” where countries rely on oil and gas revenues to service debt and maintain energy access, leaving little room to invest in alternatives.
Government explores ways to fund transition
Against this backdrop, some governments are turning to fossil fuel revenues themselves as a way to help finance the transition.
in Brazilian Espírito Santo state officials say money from oil and gas production is being used to help pay for the transition to cleaner energy, including by funding projects that reduce emissions and attract private investors, including a new fund aimed at attracting private investment in emissions-reduction projects, an example of how some governments are using fossil fuel revenues to finance transitions away from fossil fuels.
People participate in a session at a conference aimed at transitioning away from fossil fuels, Monday, April 27, 2026, in Santa Marta, Colombia. (AP Photo/Ivan Valencia)
People participate in a session at a conference aimed at transitioning away from fossil fuels, Monday, April 27, 2026, in Santa Marta, Colombia. (AP Photo/Ivan Valencia)
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Officials said such revenue could provide a starting point in areas where alternative financing is limited and, in some cases, help attract private capital to clean energy projects.
But experts warned that this approach had clear limitations. Fossil fuel revenues are volatile; world energy prices, It is expected to decline over time as countries reduce production and consumption.
“Climate finance is a challenge around the world, but it’s an even bigger challenge at the local level,” said Nicholas Ripolis, founder and executive director of the Center for Energy, Finance and Development, who moderated a panel discussion at the conference on using royalties for energy transitions.
Wealthier regions use policy to close the gap
Officials in wealthy regions said they are trying to fill some of the gap through policy and market mechanisms. For example, in the United States, California uses a carbon market. A system that requires companies to pay or limit emissions — Low-carbon fuel standards to generate investment and guide the transition.
“We remain steadfast in our commitment to carbon neutrality by 2045,” said Sara Izant, deputy director for climate policy at the California Department of Environmental Protection, which oversees the state’s environmental and climate policy, adding that the transition will also have public health and economic benefits.
He said California remains a “steady and reliable partner” in combating climate change, noting that a coalition of U.S. states continues to pursue emissions reductions, even though federal policy has sometimes done so. Moving away from international climate commitments and fossil fuel regulations. He acknowledged that this transition has brought challenges, including disruptions to fuel supplies due to refinery closures and the need to supplement with imports in the short term.
But not everyone at the meeting agreed with that approach.
In a statement released at the conference on Monday night, indigenous groups said efforts to phase out oil, gas and coal must not rely on carbon markets or offset schemes (where polluters pay to offset their emissions rather than reduce them), arguing that such approaches fail to address the root causes of climate change.
The Trump administration is Not among those invited Organizers said their focus was on governments seeking to accelerate the transition away from fossil fuels.
A family walks near a “Pay the Polluters” demonstration along the Caribbean Sea demanding that oil companies pay for the energy transition during a nearby conference aimed at transitioning away from fossil fuels, Monday, April 27, 2026, in Santa Marta, Colombia. (AP Photo/Ivan Valencia)
A family walks near a “Pay the Polluters” demonstration along the Caribbean Sea demanding that oil companies pay for the energy transition during a nearby conference aimed at transitioning away from fossil fuels, Monday, April 27, 2026, in Santa Marta, Colombia. (AP Photo/Ivan Valencia)
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In Canada, the province of Quebec has taken a more direct approach, passing legislation that completely halts new fossil fuel exploration and production.
Quebec’s climate minister, Jean Lemire, acknowledged the pressures on cost and energy policy, but said: “In Quebec, we have unanimously decided to say no to fossil fuels.”
But Lemire warned that global efforts to coordinate the transition remain slow.
“At the moment in the United Nations, we will not make much progress on anything… because we are subject to consensus,” he said, referring to a system in which all countries must agree before a decision is adopted.
Efforts to build momentum continue outside of official UN consultations. Tuvalu, a low-lying island nation in the Pacific Ocean that is highly susceptible to sea level rise, announced at a side event during the conference that it would be the next host country.
“Tuvalu is not waiting for other countries to act, we are leading the way,” said Dr Maina Vakahua Talia, Minister of the Interior, Environment and Climate Change. “This is not a negotiating position, this is a matter of survival.”
The discussions in Santa Marta highlight a broader shift in the energy transition from a technical to an economic challenge, focused on mobilizing investment and restructuring economies that have long relied on fossil fuels.
However, speakers said this issue remained unresolved.
“There’s a lot of money in war,” Lemire said. “But we have a common enemy: climate change, and we can’t find the money for it.”
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