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U.S., UK-led coalition seeks to limit financing for coal plants

The United States, United Kingdom and Netherlands will float a plan this week requiring new coal-fired power plants to meet a carbon pollution standard in order to receive public funding from the world's wealthiest countries, according to a draft seen by Reuters.

The countries will present the plan to the Organization for Economic Cooperation and Development's exports credits group, which started a week-long meeting on Monday.

Restrictions on export credits for coal-fired projects would be the latest move by international financial organizations to crack down on carbon pollution.

Delegates to the Paris-based organization will discuss, among other topics, "how officially supported export credit programs might contribute to the common goal of addressing climate change," said David Drysdale, head of the OECD's export credit division.

Export credit agencies from OECD countries were responsible for 60 percent of public support, or roughly $32 billion, for coal projects abroad between 2007 and 2013, according to watchdog group ECA Watch. Of that, Japan accounted for nearly half.

President Barack Obama's Climate Action Plan from June 2013 said the United States will limit its investment in coal projects overseas and called on international organizations and lenders to do the same.

Multilateral institutions such as the World Bank and the European Investment Bank have also pledged not to finance coal-fired power plants under most circumstances.

The U.S.-UK-Dutch proposal suggests OECD countries discuss whether to require any new power plant to meet a carbon emission standard, similar to one proposed by the U.S. Environmental Protection Agency in September for new U.S. facilities.

"We propose a fulsome discussion of a carbon emission performance standard in the context of broader efforts to use export credit policy to combat climate change, including of how incentives and conditions could reinforce each other," the draft said.

By November, the proposal would call on OECD export credit agency members to discuss the scope and form of a standard, such as whether it should be set according to the level of carbon emissions or emission intensity.

Between November and June 2015, the countries would discuss a range of other details, such as which countries could be exempted and what technologies could be allowed to get export credit support.

Green groups see export credit agencies as "a place of last resort" for carbon-intensive industries to secure public funding as other doors close. "There is clearly momentum toward closing down sources of public funding," said Steve Herz, a senior attorney for the Sierra Club.

The U.S. coal industry has said proposals such as this jeopardize its ability to export its product to poor countries attempting to grow out of poverty.

Source: Reuters