Last week we won a huge victory in the fight against coal subsidies. For many years, Greenpeace has been working with partners like Pacific Environment, Friends of the Earth (FOE), Oil Change International, and Sierra Club to stop what has become the largest single source of federal financial support for fossil fuels – the United States Export-Import Bank. In 2012 alone, Ex-Im provided over $10 billion to the fossil fuel industry. This is finally coming to an end.
In his Georgetown University climate plan announcement on June 25th, President Obama declared that the United States would no longer finance coal plants in other countries – unless they were among the ‘poorest countries’ and the plant is using the most modern technology. This caveat should not be a problem. Even the World Bank and International Energy Agency are realizing that to get to universal energy access the focus needs to be on decentralized renewable power projects, not huge power plants.
Obama’s announcement most directly meant the US Export-Import Bank will stop supporting coal plants, although how the US votes in development banks like the World Bank is also important. Ex-Im is the only US federal agency that has been and was still considering financing coal plants in other countries.
President Obama appointed Ex-Im’s President and Board Chair Fred Hochberg and the Senate reconfirmed him last week. Under Hochberg, Ex-Im has until now been belligerent towards the climate and rapidly increased funding for coal. Even two days after Obama’s climate speech, Hochberg and his Board declared at an open meeting that Ex-Im was obeying Obama’s policy even as they were funding coal plants in South Africa, India, and possibly Vietnam. The Board was delusional and self-congratulatory as they called themselves climate leaders among so-called ‘export credit agencies.’
In a drastic 180, on Thursday Ex-Im’s Board of Directors voted against moving forward on a 1200 megawatt coal plant in Vietnam. This was the first coal plant decision to come up on their agenda since President Obama announced his climate plan. We had written to the President to say this Vietnam coal plant vote was a test of his new policy. The United States will be the first country to have a policy that its ‘export credit agency‘ (Ex-Im) cannot support coal plants. Obama’s use of his bully pulpit is helping to make Ex-Im’s delusion of climate leadership a reality.
Ex-Im has ignored its own climate rules for a long time, focusing instead on preferences of its huge corporate benefactors. In 1989, partly to support new American industry Congress required that 5 percent of their financing be for renewable energy, which it altered to 10 percent for renewables and ‘environmentally beneficial’ exports several years ago. In 2012 renewables accounted for less than 1 percent of new projects. Fossil fuels account for more than 90 percent of their energy financing. Ex-Im has been required to track its carbon footprint since Greenpeace, FOE, and several cities sued Ex-Im over climate impacts from funding fossil fuel projects abroad. The court agreed we had standing to argue against local climate impacts they caused by promoting the use of fossil fuels globally. Until now, however, Ex-Im has not been required to change its funding practices.
America needs to consider its carbon footprint globally. If we promote more climate pollution abroad while reducing it at home, what’s the point? Stopping public dollars from going toward fossil fuel projects in other countries is a vital step; subsidies make it less risky for fossil fuel companies to keep destroying the planet. Obama’s ‘all of the above‘ energy policy is at odds with his climate plan because it promotes fossil fuel extraction and exports. Ex-Im now needs to make a policy against funding coal plants officially permanent, and Obama needs to reconsider other ways his administration is still promoting global climate pollution such as through exporting American coal, oil, and gas.