Germany is trying to wean itself off the coal powered electricity from stations like this one at Gelsenkirchen. So how come they are financing new ones abroad? Photo: Guy Gorek via Flickr.
Stop 'back door' financing for new coal power stations!
11th June 2014
France, Germany and other wealthy countries have positive policies on climate change, writes Steven Herz. So why are they handing out back door financing for new coal power stations abroad via 'export credits'? Over $5 billion from EU countries since 2007 ...
Why are the German and French export credit agencies acting in ways that are so obviously contrary to the climate goals of their people and their leaders?
Over the years, many European countries have developed a reputation for leadership in the fight against climate disruption.
Collectively, the European Union (EU) has already adopted among the world's most progressive emissions limits.
With strong public support, many European governments from across the political spectrum have embraced the need to act decisively to limit carbon emissions.
For example, Germany, under the center-right leadership of Chancellor Angela Merkel, has implemented a revolutionary restructuring of its energy sector to facilitate the rapid uptake of clean energy and improved efficiency.
The Export Credit Agencies policy gap
Yet while working to decarbonize their own energy sectors, some EU countries continue to provide substantial public support for the construction of coal-fired power plants abroad. Solely through their export credit agencies, EU countries have provided over $5 billion in such support since 2007.
While some countries such as the UK and the Netherlands have recognized the inconsistency and taken steps to restrict or eliminate the support for overseas coal plants, others such as Germany and France - the leading European providers of export credits for coal plants - have refused to clean up their act. Likewise Japan and Korea.
This is not about providing energy development assistance for impoverished countries. In fact, the world's leading development institutions have recognized that coal power rarely provides a good deal for development.
Coal imposes intolerable hidden costs on public health, agriculture and local environments, while clean alternatives are readily available and economically attractive.
The problem: industry capture
For this reason, the World Bank, European Bank for Reconstruction and Development (EBRD), and European Investment Bank (EIB), as well as the bilateral aid agencies in the US, the United Kingdom, the Netherlands, and the five Nordic countries have each renounced support for overseas coal in all but the most limited circumstances.
Even France's aid agency - contrary to the position of its export credit agency - has withdrawn support for coal power.
So why are the German and French export credit agencies acting in ways that are so obviously contrary to the climate goals of their people and their leaders?
It's all a matter of industry capture. These ECAs see their role as giving domestic industries a leg up in the export market, full stop. Climate disruption? Not their issue.
Given the choice between advancing the climate objectives of Chancellor Merkel and French President François Hollande or the business objectives of companies like Siemens and Alstom, they will take the latter, every time.
They must not get away with it any longer
Export credit agencies have gotten away with this kind of thing for a long time. But it may be about to change.
Back in 2009, the G20 leaders pledged to eliminate pointless fossil fuel subsidies.
And just last week the G7 leaders reiterated this commitment, and called for discussions within the Organisation for Economic Co-operation and Development (OECD) - where developed country export credit agencies agree on common policies - on how export credits can contribute to the common goal to address climate disruption.
Hopefully, this directive from the heads of state will lead the more recalcitrant ECAs to set aside their parochial economic interests and agree to a common set of standards to end support for overseas coal-fired power plants, a first big step in working toward a clean energy future.
Negotiations to begin soon
And in fact, the US, UK and Netherlands, supported by several other countries have reportedly introduced a proposal to begin negotiations on such restrictions that will be considered at the upcoming OECD meeting starting on June 16 in Paris.
If this initiative is successful, it will shutter a major source of public financial support from developed countries for dirty and dangerous coal projects abroad.
But if it fails, it will be because in the looking glass world of export credit agencies, the interests of Siemans and Alstom trump all.
That's why I'm urging you now to get onto Twitter today and join in putting pressure on OECD countries to stop exporting #climate chaos and #endcoalfinance - so OECD governments know that this is an issue that millions care about, and are demanding change.
Steven Herz is the Sierra Club's senior attorney with the International Climate Program.
More information on this issue: http://bit.ly/1hJSyFs
Join the Twitterstorm: Help put pressure on the OECD and key countries in this process to support a ban on export credit agency financing for coal!
Sample tweets below ... Note: Instances where tweets below begin with a ".", that is intentional. Be sure to include it to be sure your tweet has the widest reach possible!
- Time for @OECD to stop exporting #climate chaos. Say no to export credits and guarantees for #coal! #endcoalfinance bit.ly/1hJSyFs
- #Coal is not clean. @OECD @EU_Commission say no to export credits and guarantees for coal. #endcoalfinance bit.ly/1hJSyFs
- Coal won't solve the poor's energy access needs. Time to put a ban on export credits and guarantees for #coal in @OECD! #endcoalfinance
- Renewables are 15 times cleaner than the "cleanest" coal. Time to put an end to export credits and guarantees for #coal! #endcoalfinance
Country-specific tweets for France, Germany, Finland, Japan, and Korea:
- Time to stand up, @fhollande. Say no #coal finance & guarantees through export credit agencies @OECD! #endcoalfinance bit.ly/1hJSyFs
- .@montebourg: Lead @OECD on #climate. Ban export credit agency financing & guaranteeing for #coal! #endcoalfinance bit.ly/1hJSyFs
- .@LaurentFabius: Lead @OECD on #climate. Ban export credit agency financing and guaranteeing for #coal! #endcoalfinance
- Coal is NOT sustainable. @RoyalSegolene: end export credit agency finance & guarantees for #coal! #endcoalfinance bit.ly/1hJSyFs
- .@montebourg soyez leader à l' @OECD sur le #climat. Stoppez les soutiens à l'export au #charbon! #endcoalfinance http://ow.ly/xP59w
- Il est temps d'agir, @fhollande. Dites-non aux soutiens à l'export #charbon à l'@OECD! #endcoalfinance http://ow.ly/xP59w
- Soyez leader à l'@OCDE_francais - @coface, dites non aux soutiens à l'export du #charbon ! http://ow.ly/xP59w #endcoalfinance
- .@LaurentFabius soyez leader @OECD sur le #climat. Stoppez les soutiens à l'export au #charbon! #endcoalfinance http://ow.ly/xP59w
- Le charbon n'est PAS durable.@RoyalSegolene: stoppez les soutiens à l'export au #charbon! #endcoalfinance http://ow.ly/xP59w
- Stand up, @Angela_Merkel! Say no #coal finance & guarantees through export credit agencies @OECD! #endcoalfinance bit.ly/1hJSyFs
- Germany and @Angela_Merkel: don't export #climate change. Put a ban on export credits for #coal! #endcoalfinance bit.ly/1hJSyFs
- Aktiv werden, @Angela_Merkel! Sagen Sie Nein zu #Kohlefinanzierung und -verbürgung durch @OECD-Exportkreditagenturen! bit.ly/1l2rqRo
- Deutschland und @Angela_Merkel: nicht länger #Klimawandel exportieren. Stoppen Sie Exportkredite und -bürgschaften für #Kohle! bit.ly/1l2rqRo
- .@Vapaavuori: stand up for a full ban on #coal export credits. Coal is never clean! #endcoalfinance bit.ly/1hJSyFs
- .@VilleNiinisto: Help lead @OECD away from exporting #climate chaos. Ban export credits for #coal! #endcoalfinance bit.ly/1hJSyFs
- Finland and @Vapaavuori: don't export #climate change. Put a ban on export credits for #coal! #endcoalfinance bit.ly/1hJSyFs
- It's time for PM @AbeShinzo to put an end export credits for #coal. Coal is never clean. #endcoalfinance bit.ly/1hJSyFs
- .@AbeShinzo, say no to dirty coal at home and abroad! Support a ban on #coal export credits. #endcoalfinance bit.ly/1hJSyFs
- The whole world's watching. Will @AbeShinzo support a ban on export credits for dirty #coal? #endcoalfinance bit.ly/1hJSyFs
- It's time for @mosfkorea to put an end export credits for #coal. Coal is never clean. #endcoalfinance bit.ly/1hJSyFs
- .@mosfkorea, say no to dirty coal at home and abroad! Support a ban on #coal export credits. #endcoalfinance bit.ly/1hJSyFs
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