Step Off the Gas: International public finance, natural gas, and clean alternatives in the Global South

The report finds that international public finance for gas in low- and middle-income countries is four times higher than for wind or solar, risking a 'dash for gas' that locks economies into high-carbon pathways. It argues that gas is no longer a necessary 'bridge fuel' because renewables are often cheaper and more effective for power, cooking, and industry. The document recommends that international financial institutions end support for gas and instead scale up clean energy finance, focusing on grid integration, technology transfer, and a just transition for workers.

• International public finance for natural gas in low- and middle-income countries significantly outweighs that for renewables, averaging nearly USD 16 billion per year from 2017 to 2019, which is four times the amount provided for wind or solar.
• The 'bridge fuel' argument for gas is considered obsolete due to the urgency of the climate crisis, the rapid cost decline of renewables, and the significant impact of methane leakage across the gas supply chain.
• Investments in gas infrastructure risk creating stranded assets and 'stranded economies' where long-lived infrastructure locks countries into carbon-intensive paths, potentially leading to financial losses and trading disadvantages as the world decarbonizes.
• Renewable energy is already cost-competitive with gas for the majority of its uses in the Global South, including power generation, and is increasingly viable for clean cooking through electric solutions.
• Domestic gas production in some countries has paradoxically increased import dependence by creating political pressure for consumption subsidies that drive demand faster than production can grow.
• In Mozambique, the anticipation of gas revenues led to a 'presource curse' characterized by ballooning public debt, corruption scandals, and increased militia violence in the Cabo Delgado province.
• Case studies of Argentina, Egypt, and India show different risks: Argentina is trapped by high subsidies and debt; Egypt risks redundancy by building parallel gas and EV infrastructure while betting on European demand; and India faces stranded power assets due to high import costs.
• International public finance can help the Global South overcome transition barriers by de-risking private investment, facilitating technology transfer, and supporting the integration of variable renewables into weak electricity grids.

APA

Muttitt, G., Sharma, S., Mostafa, M., Kühne, K., Doukas, A., Gerasimchuk, I., & Roth, J. (2021). Step Off the Gas: International public finance, natural gas, and clean alternatives in the Global South. International Institute for Sustainable Development. https://www.iisd.org/system/files/2021-06/natural-gas-finance-clean-alternatives-global-south.pdf

Chicago

Muttitt, Greg, Shruti Sharma, Mostafa Mostafa, Kjell Kühne, Alex Doukas, Ivetta Gerasimchuk, and Joachim Roth. Step Off the Gas: International public finance, natural gas, and clean alternatives in the Global South. International Institute for Sustainable Development, 2021. https://www.iisd.org/system/files/2021-06/natural-gas-finance-clean-alternatives-global-south.pdf.

Wikipedia

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BibTeX

@techreport{muttitt2021step, author = {Muttitt, Greg and Sharma, Shruti and Mostafa, Mostafa and Kühne, Kjell and Doukas, Alex and Gerasimchuk, Ivetta and Roth, Joachim}, title = {{Step Off the Gas: International public finance, natural gas, and clean alternatives in the Global South}}, institution = {International Institute for Sustainable Development}, year = {2021}, month = jun, url = {https://www.iisd.org/system/files/2021-06/natural-gas-finance-clean-alternatives-global-south.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }