Canada has been a strong advocate for G7-led initiatives aimed at reducing investment and public financing in fossil fuel energy globally. However, these policies have not spurred an energy transition and have disproportionately affected low-income populations, particularly in Africa, where rising energy costs have become a significant burden. Experts argue that Canada should reassess its approach, as a shift to renewable energy is not imminent.

As the current chair of the G7, Canada is urged to reconsider its stance on halting financial support for fossil fuel energy. Despite receiving substantial subsidies for renewable energy, this sector still holds a minor share of the global energy market. According to the Energy Institute's 2025 Statistical Review of World Energy, fossil fuels constituted 87% of global energy consumption, a notable increase from 81.6% in 2023. This rise is attributed to increased consumption in countries like China and India, as well as more accurate assessments of the limited output from renewable sources.

For several years, Canada has backed the G7, World Bank, and International Energy Agency's decisions to cease investments in fossil fuels. However, critics argue that this policy is illogical, given that current renewable energy sources cannot meet the demands of modern economies. The reduction in funding for existing energy sources, without viable alternatives, has led to significant consequences. Underinvestment in fossil fuels over the past decade has resulted in rising prices for oil, coal, and natural gas, contributing to economic downturns in countries like Germany and fueling inflation in Canada and the United States.

The increase in energy prices has particularly impacted low-income households, which spend a larger portion of their income on energy compared to wealthier families. The belief that an energy transition is underway, despite a lack of evidence, has led to the rise of costly and unreliable electricity in developed nations such as Germany and the United Kingdom. This situation has also raised national security concerns, as countries like China continue to rely on coal, producing cheaper and more dependable electricity than many Western nations.

Moreover, the rising energy costs have made it increasingly difficult for many Africans to access electricity. A United Nations report indicated that Africa experienced its first decline in electricity access in 2022, with further reductions in 2023. The cessation of investments and loans has hindered the development of local oil and natural gas resources in Africa. While private markets in the West can provide funding for energy projects, African nations often rely on public financing to attract foreign investment.

The World Bank, United Nations, and International Energy Agency are urged to stop promoting the notion that an energy transition is occurring in African countries. Without access to international loans and funding for fossil fuel development, sub-Saharan African nations struggle to generate sufficient power for their populations. Consequently, many Africans are left with no choice but to rely on burning biomass in poorly ventilated homes, exposing themselves, particularly women and children, to harmful smoke.

Canada is called upon to acknowledge that fossil fuels, particularly oil and natural gas, remain essential until a viable alternative is available. As a contributor to the World Bank, Canada should advocate for the renewal of funding for fossil fuel projects, especially natural gas, to help alleviate poverty in Africa and the developing world.