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US Export-Import Bank to Vote on “Carbon Increase Plan” Ahead of Obama's Visit
Plan paves the way for increased coal lending; Record levels of subsidies for oil and gas ongoing
WASHINGTON - March 9 - As the Board of the United States Export-Import Bank (Ex-Im Bank) prepares to vote on the Ex-Im Bank’s proposed new Carbon Policy Implementation Plan, environmental groups urged them to reject the plan in a letter sent to the Board. The Board vote is planned for today, and the plan will likely be announced with fanfare at Ex-Im Bank’s 2010 annual conference later this week, at which Treasury Secretary Geithner, Secretary of State Clinton and President Obama will be in attendance.
A 2009 lawsuit settlement with Friends of the Earth and other environmental groups required Ex-Im Bank to develop a Carbon Policy. However, the Carbon Policy and its pending Implementation Plan fail to curb Ex-Im Bank’s skyrocketing portfolio of fossil fuel emissions, leading environmental groups to label it the “Ex-Im Bank Carbon Increase Plan”.
There are three fundamental reasons why the groups reject the plan:
1) Unlike the carbon policy of its sister agency, the Overseas Private Investment Corporation, Ex-Im Bank’s Carbon Policy Implementation Plan contains no provisions to curb the agency’s rapidly growing oil and gas-related transactions. Such deals comprise virtually all of Ex-Im Bank’s portfolio of fossil fuel projects. Over the last decade, Ex-Im has provided more than $15 billion in oil and gas financing, accounting for at least 96 percent of its overall energy portfolio.
2) The plan states that Ex-Im will “adopt a rigorous enhanced due diligence process for all high carbon intensity projects, with an early review of CO2 issues by the Board of Directors”, but in fact its plan would allow even the worst coal and other carbon-intensive projects to proceed so long as they are accompanied by unproven carbon capture and storage or dubious offset schemes. According to management, Ex-Im Bank has financed no coal power projects in the last decade, compared with more than $15 billion in oil and gas financing – which is not considered “high carbon intensity” according to Ex-Im Bank’s methodology. In short, the plan appears to pave the way for coal, without even curbing oil and gas projects.
3) The plan touts the “$250 million target for Renewable Energy Projects” but in fact this “target” is mandated in the court settlement with environmental groups who sued Ex-Im Bank over its carbon impacts. Meanwhile, in recent years Ex-Im Bank’s financing for renewable energy has been less than 4 percent of the amount it has poured into fossil fuel projects.
Representatives of the organizations had this to say:
“Ex-Im Bank is on a fossil fuel binge, and its Carbon Policy Implementation Plan fails to address the main source of this addiction—oil and gas financing. Meanwhile, the Plan appears to anticipate even greater emissions by developing a scheme under which the most carbon-intensive projects in the coal sector could go forward”, said Doug Norlen, Policy Director, Pacific Environment.
“By allowing coal fired power plants to ‘offset’ their carbon emissions elsewhere, Ex-Im’s plan would encourage more of these dirty projects,” said Michelle Chan of Friends of the Earth. “Offsets do nothing to help – and in fact end up harming -- local communities who suffer from coal plants, which emit mercury, arsenic, sulfur dioxide and other carbon co-pollutants.”
“Ex-Im’s plan is greenwash, pure and simple” said Steve Kretzmann of Oil Change International. “It makes a mockery of the Obama Administration’s supposed commitment to phase out fossil fuel subsidies by ignoring the billions this taxpayer funded institution gives to Big Oil every year.”
A detailed analysis of the Plan, including additional concerns on process and transparency, is available in the letter sent this morning to Ex-Im Bank.