Climate

Reauthorizing The Ex-Im Bank Is Bad News For The Climate, Environmentalists Say

CREDIT: AP Photo/Jacquelyn Martin

In this July 28, 2015, file photo, a man walks out of the Export-Import Bank of the United States in Washington. A strong coalition of establishment-backed Republicans and House Democrats voted overwhelmingly Oct. 27 to revive the Export-Import Bank, dealing a defeat to tea party conservatives and Speaker-to-be Paul Ryan.

With bipartisan support, the House of Representatives voted this week to approve the reauthorization of the U.S. Export-Import Bank. The measure passed 313-118, with a majority of Republicans joining almost all Democrats.

Even with years of uproar from environmental organizations and restrictions on the financing of coal projects, the reauthorization of the Ex-Im Bank did not include reforms needed to stop the agency from financing fossil fuel and fracking projects overseas.

The Ex-Im Bank, a federally-owned agency that promotes U.S. exports by providing credit and loan guarantees to foreign buyers, has financed billions of dollars worth of coal and gas fired power plants in South Africa, Papua New Guinea, and the Great Barrier Reef World Heritage Area, among other places. Practices such as these have been proven to worsen climate change, increase pollution, and degrade human health. According to Friends of the Earth, an Ex-Im Office of Inspector General report found that 19 people have died on the Ex-Im-financed Sasan coal operation in India.

“The House of Representatives’ Ex-Im reauthorization bill exposes the U.S. government to increasing financial and corruption risks by failing to institute reforms to ensure projects abide by environmental and social safeguards,” said Kate DeAngelis, international policy analyst at Friends of the Earth (FOE), in a statement.

FOE has been fighting against Ex-Im’s practices since 2002, when the group issued a lawsuit against the bank over its support of natural gas projects. The group has been trying to make sure the bank stops financing fossil fuel projects that can be harmful to the environment and local people, and instead finance renewable energy projects, such as solar and wind. FOE is also pushing for the Ex-Im Bank to have a high level of transparency with properly enforced regulations.

According to DeAngelis, the bank does not follow regulations that require them to disclosure environmental assessments and reports. Only three out of 40 projects have been made open to the public, and Ex-Im has repeatedly ignored FOE’s requests for assessments.

“We want to make sure the local communities being affected have a role in what is taking place and that they have a say in what happening,” DeAngelis told ThinkProgress. “We do not want to speak for these communities, but want to give them a voice and we want to make sure that energy is actually getting to locals and people who need it in developing nations.”

Thousands of businesses use the agency for loans and insurance for exports. Since 1934 the agency has been reauthorized regularly, with controversy developing within the past few years.

In December 2013, in response to the Obama Administration’s Climate Action Plan, the Ex-Im Bank board voted to stop funding the construction of new coal plants overseas, with certain exceptions. The issue of climate change split the Democrats over reauthorization of the bank the following year. Financial interests in certain states, as well as coal lobbies and other stakeholders on Capitol Hill have put pressure on representatives to roll-back restrictions on Ex-Im.

“We want a complaints mechanism to be put in place, so when terrible things happen, there is a way for complaints to be brought to Ex-Im,” said DeAngelis. “We want to see other reforms being implemented properly and fully, so it’s not just something Ex-Im can check a box and ignore.”

She also explained how FOE wants to make sure international agencies are choosing renewable projects that will bring energy to local communities, not big corporations. Sometimes it’s unclear if renewable energy projects will directly benefit the people who need them.

DeAngelis said language used by Ex-Im is “discrimination language.” This means the agency cannot “choose energy supplies when making financing decisions.” It cannot “discriminate against” a coal or oil project when determining financial decisions. This language is, as DeAngelis explained, a way to appease both parties. The reauthorization will be voted on in the Senate later this week or next.

Paul Ryan, who’s expected to be elected Speaker this week, is among the bank’s opponents. He told the Hill the bank is an example of “crony capitalism.”