Here’s something Obama could announce Tuesday in his big climate speech that would help reverse the fossil fuel binge — JR.A while back I wrote a piece highlighting the most unsung climate hero of the Obama Administration — the Overseas Private Investment Corporation (OPIC). When it comes to clean energy, OPIC punches well above its weight, with over $1.6 billion in support to “renewable resources” last year alone. Better yet, it hasn’t supported a dirty coal plant in a decade.
The problem is OPIC can’t make up for the billions the administration’s other overseas investment agencies are providing to coal and other fossil fuels. It’s time the administration brought other agencies up to the OPIC clean energy standard and dropped coal finance for good.
The most egregious offender here is the U.S. Export Import (Ex-Im) Bank. Following a legal settlement reached in 2009, Ex-Im was supposed to reign in its financing of fossil fuels to limit its impact on climate change. The problem is, despite creating a low carbon policy, Ex-Im has gone on a fossil fuel binge. That’s included a lot of dirty coal plants and other fossil fuels. It’s so bad they’re even considering supporting coal export projects inside the Great Barrier Reef!
The good news is we have an opportunity. Ex-Im is currently in the process of revising its environmental and social policies, including its carbon policy. This is, of course, the same carbon policy that has done nothing to limit investments in new coal fired power plants. Clearly some changes need to be made.
The problem is that the changes Ex-Im has in mind will not place any new limits on its fossil fuel investments and will do nothing to alter its portfolio. If Ex-Im adopts these policies unchanged, it would be a huge missed opportunity to green its portfolio, and to help President Obama meet the commitment he made with other G-20 leaders to phase out inefficient fossil fuel subsidies.
But Ex-Im Bank is not alone. The U.S. Trade and Development Agency (USTDA) is a tiny agency that helps energy projects by providing relatively small amounts of grant funding for the development of “modern infrastructure.” While USTDA supports far more renewable energy projects than Ex-Im Bank, it still supports coal and other fossil fuels. Check out their most recent list of energy sector investments, including gems like coal bed methane in China and a new dirty coal plant in Tajikistan.
Now compare these two agencies to OPIC, who in 2012 committed $1.6 billion to renewable resources — a 37 percent increase from the previous year. These projects include solar, wind, and geothermal power plants, many of which are targeted to support off-grid populations in poor rural areas. The Ex-Im Bank, on the other hand, broke their own record in fossil fuel financing in 2012, while their renewable investments drop year after year. The contrast couldn’t be more stark.
The Obama administration has an agency that has made the fossil-fuels-to-clean-energy transition. It’s time for these other agencies to follow suit.
Justin Guay is an International Climate and Energy Representative for the Sierra Club International Climate Program. Vrinda Manglik of the Sierra Club coauthored this piece.