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How The House Budget Threatens International Climate and Clean Energy Investment

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"How The House Budget Threatens International Climate and Clean Energy Investment"

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Flooding in New Delhi, India.

Flooding in New Delhi, India.

CREDIT: (Credit: AP/Tsering Topgyal)

As Congress continues to operate without a budget and faces the prospect of a government shutdown on October 1, appropriations for crucial investments in international climate change hang in the balance.

While the Senate Appropriations Committee passed the fiscal year 2014 Department of State, Foreign Operations, and Related Programs appropriations bill — which maintains spending consistent with last year’s climate investments — the House Appropriations Committee voted to eliminate or significantly cut $10 billion for foreign-affairs programs. This vast difference means that international climate and clean energy investments — and their high rewards — are in danger.

Investments are crucial for climate, development, and international security

The effects of climate change threaten to undo tremendous progress toward increased prosperity in the developing world. In areas of the world that already have complex and delicate geopolitical situations, climate change could displace populations and further destabilize governments. And because the warming impacts of greenhouse gas emissions know no national borders, increased emissions abroad continue to threaten U.S. communities.

So for the sake of domestic and international security and economic growth, we need sustained action to combat climate change. Countries around the world have committed to reducing greenhouse gas emissions, and in June, President Barack Obama announced a Climate Action Plan that includes 10 international objectives.

In order to limit global climate warming to the internationally agreed-upon threshold of 2 degrees Celsius, developing and developed countries alike must increase their clean energy deployment. It is not just necessary, however — international climate investment is also cost effective. Foreign investment helps develop new overseas markets for U.S. clean energy companies, which creates jobs here in the United States. There are also significant co-benefits, such as public health gains. By implementing clean energy technology and limiting pollution, the United States can help decrease mortality and premature death caused by pollutants.

That’s why the United States traditionally appropriates a small fraction of its nondefense-discretionary-spending budget to international climate programs. Relative to the entire federal budget, the cost is small, and the impact is large.

The congressional divide

But as Congress battles over the budget, progress toward fully mobilized clean energy and climate finance to meet international goals is in danger. While the Senate maintained base funding — the total funding minus military-related overseas-contingency-operation funding — at $44.2 billion in the appropriations bill that passed out of its committee on July 25, the House bill allocates base funding of about $34.1 billion. That’s a $10 billion difference.

A large portion of the cuts comes from international climate and clean energy investment. The House bill would:

  • Eliminate funding for the Climate Investment Funds. These include the Clean Technology Fund, which invests in large clean energy projects in low- and middle-income countries, and the Strategic Climate Fund, supporting pilot forest investment, resilience, and renewable-energy projects.
  • Eliminate funding to the Global Environment Facility, an independent financial institution that works with international bodies, civil society, and private firms to fund sustainable development around the world
  • Eliminate funding for international organizations and programs, including funds for the UNEP, the UNFCCC, and the IPCC
  • Cut more than one-fifth of 2013 funding to the Millennium Challenge Corporation, a U.S. development and foreign-aid agency founded under former President George W. Bush that incorporates sustainability principles into its investment projects
  • Cut nearly 13 percent of funding to USAID, the agency that provides a significant portion of funding for climate change adaption and mitigation

There is a clear discrepancy between the priorities of the House and Senate appropriations committees. The Senate bill includes $283.7 million for the World Bank Climate Investment Funds, $143.8 million for the Global Environment Facility, $355.7 million for the International Organizations and Programs account, and almost $900 million for the Millennium Challenge Corporation. It also increases USAID funding to almost $1.45 billion.

For more, read “Budget Gridlock Risks International Climate and Clean Energy Investments” on the CAP website.

Rebecca Lefton is a Senior Policy Analyst focusing on international climate change and sustainable development at the Center for American Progress.

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