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Obama Should Tell Ex-Im Bank To Move Beyond Coal

By Justin Guay, Guest Contributor and Climate Guest Contributor  

"Obama Should Tell Ex-Im Bank To Move Beyond Coal"

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Here’s something Obama could announce Tuesday in his big climate speech that would help reverse the fossil fuel binge — JR.

Credit: Shutterstock

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!

Source: PacificEnviornment.org

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.

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9 Responses to Obama Should Tell Ex-Im Bank To Move Beyond Coal

  1. mememine69 says:

    After 28 years of science ONLY agreeing it COULD be a crisis and NEVER saying it *WILL be a crisis there comes a time when we ultimately must judge for ourselves if this CO2 death threat for billions of helpless children is real or not as 28 more years of “maybe” a crisis is unsustainable.
    Scientists have children so why don’t they end this debate and agree on giving a real warning of a real crisis?
    *Science has agreed climate change is real and is happening and could (nothing more) be a real crisis as not one single IPCC warning says it WILL be a crisis and not one IPCC warning is not swimming in “maybes”.
    And get up to date:
    *Occupywallstreet now does not even mention CO2 in its list of demands because of the bank-funded and corporate run carbon trading stock markets ruled by politicians.
    *Canada killed Y2Kyoto with a freely elected climate change denying prime minister and nobody cared, especially the millions of scientists warning us of unstoppable warming (a comet hit).
    *Julian Assange is of course a climate change denier.
    *Obama had not mentioned the crisis in two State of the Unions addresses.

    • BillD says:

      Nearly all scientists say that “it will be a crisis. Did you read the recent post saying that “Miami is doomed” due to sea level rise. The question in this example and for all of the “climate change crisis” is not “if” but “when.” In the case of Miami, it will not longer be a viable city at the turn of the next century when > 30% is under water. Of course that could happen a few decades earlier or later. The fires and droughts in the west will only get worse. They are a crisis already. When the next hurricane hits NYC and does 10X more damage than “super storm Sandy” that will be a crisis.

  2. Mike Roddy says:

    Yup. The difference between World Bank and OPIC is that World Bank is largely funded by governments, and has a social mission. Even then they blow it sometimes with coal investments.

    OPIC is hopeless, and is joined at the hip with banksters, who are psychopathic. An overheated world in 2050 is fine with them, since if they’re still alive they believe they can relax on their climate controlled yachts. What they haven’t figured out is that even with current technology, people will know where they live, and will bring them to justice.

  3. Jeff Huggins says:

    Dear Justin and Vrinda (and the Sierra Club),

    Thanks for this piece. I hope you are well.

    I’d like to offer an additional thought and make a suggestion — a plea! — to the Sierra Club.

    It should go without saying that, if we want to end up in a better position (with respect to climate change) four years from now than we’re in today, it would behoove us all to make sure that we vet would-be Democratic nominees for president, understand and test their positions and commitment regarding climate change, and put ourselves in a position in which the person we nominate and ultimately elect in 2016 will provide Real Leadership — in the U.S. and globally — to address climate change.

    Right?!

    So, to that end, I’d like to ask the Sierra Club to play a proactive and responsible leadership role to find out, and help the public understand, Hillary Clinton’s stance in concrete terms, as well as her willingness and ability to lead on this crucial issue. And, given that she is already running for the nomination, in effect, (but for other reasons as well), it would behoove us to find out, test, and understand her position ASAP, before she gains the nomination by mere momentum or mere default. Indeed, we should make sure that all would-be nominees for president understand that we are serious this time, and that we will want (and demand) to know a person’s position with respect to climate change in concrete and credible terms, before we will support them.

    For starters, then, and given the timeliness and importance of the Keystone XL issue, I’d like to ask the Sierra Club to lead, or help lead, an effort to persistently pose this concrete question to Hillary Clinton, starting ASAP (and until she answers it): “How would you rule regarding Keystone XL if you were president today — that is, if it were your decision to make? Would you approve it or deny approval? Please be clear, forthright, honest, and decisive. Thank you.”

    In previous comments — many of them — I’ve also asked and suggested that CAP and CP lead such an effort. In my view, Bill McKibben and 350.org should also do so, along with the NRDC and anyone else who is serious about climate change and serious about electing leaders who will Lead the U.S. to address it.

    The necessity of the idea should speak for itself.

    Please let me know what you think.

    Thanks and Be Well,

    Jeff Huggins

    • mulp says:

      Yeah, right, let’s focus on making sure we vet Republicans to oppose all taxes and anything that will prevent us from driving gas guzzlers.

      Then we can split Congress between the Democrats who are going to fail to save the future because we made sure they were blocked by anti-tax, anti-sacrifice Republicans.

      Then we can blame Democrats for failing, and vote Republican.

      The environmental laws in the US have always been bipartisan because neither Republicans nor Democrats could do it alone. The most hated regulation, the environmental impact statement was created by Nixon by executive order, and he requested Congress create the EPA. Teddy Roosevelt established the principle setting aside wilderness for future generations.

      The problem isn’t with Democrats, but with the future and environment being considered the exclusive responsibility of Democrats and not of all Americans.

      Democrats can’t provide leadership if they are in the minority, so you must consider the environmental policies you want with Republicans in control of the White House and Congress, or even just one of the three.

  4. Paul Magnus says:

    “They knew three decades ago that the constraint on carbon emissions was going to constrain the coal industry at some point and that point has now come.”

    http://www.abc.net.au/lateline/content/2013/s3787338.htm

  5. onyerlefty says:

    Eliminating coal from the world’s power mix is ultimately a good thing. But this call comes yet again at the expense of the people who can least afford it – like residents near Mongolia’s Tavan Tolgoi mine, where a relatively small 500MW plant is proposed. Many will have utility electricity for the first time, and the Sierra Club wants to deny them all the benefits that brings because it’s not clean enough?

    Since the U.S. uses 5x the global average of energy per capita, maybe we should clean up our own act before we attempt to deny others the basics we take for granted.

    • Calamity Jean says:

      Tavan Tolgoi is a coal mine that in 2011 started exporting coal to China. A power plant near it will facilitate the mining. I know the Chinese will get that coal anyway, but why should we help them? Let them finance their own darn power plant.

  6. Michael Pope says:

    Detailed research undertaken by Yang and Cui (2012) the US government, through its Ex-Im Bank is providing $3.478 billion for the construction of 17 new coal fired power stations. By comparison the Overseas Private Investment Corporation is only providing $685 million for 6 coal fired power stations.

    While significant, these funds are dwarfed by multilateral institutions, such as the World Bank and Asian Development Bank which are providing grant and loan funds amounting to $13.351 billion for 73 new power plants – and some of that funding comes from the US government.

    These figures relate only to new coal fired power plants and do not include the vast sums of money being provided in the form of loans, tax concessions and other subsidies to stimulate the production and export of coal.
    Governments funding these lending institutions know that all of the power stations being built with their money will not use Carbon Capture and Sequestration (CCS) technology – it is too uneconomic – that they will increase CO2 pollution of the atmosphere and that this will produce accelerated global warming.

    Governments making these funds available know this and that it undermines their public statements on the need to limit average global surface temperature to less than 2°C above the pre-industrial.

    As with the mining industry, profit clearly outweighs public policy as far as the lending institutions are concerned.

    President Obama’s decision to put an end to US public funding of new coal fired power stations is both welcome and overdue. His decision to promote domestic use of renewable energy rather than that produced from burning fossil fuels is to be lauded – but proof of the pudding is in the eating.