International Subsidies

Overseas Private Investment Corporation and Export-Import Bank Fossil Fuel Funding Abroad
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Background The Overseas Private Investment Corporation (OPIC) and the Export-Import Bank of the United States (Ex-Im) are U.S. export agencies that finance U.S. corporations conducting business abroad. These agencies underwrite coal projects and oil and gas developments, such as power plants, extraction and distribution systems in nations such as India, Russia and other developing countries. OPIC and Ex-Im have reported to Congress commitments to underwrite more than $15 billion dollars in loans, guarantees and credits for fossil fuel projects from 1992 to 1998. Fossil fuel extraction, delivery and emissions pollute local communities and the global environment, especially in comparison to sustainable renewable options. These agencies would better serve the global environment and U.S. taxpayers by ending support for oil and gas extraction and pipeline programs and coal projects.

Green Scissors Proposal Prohibit OPIC and Ex-Im from financing coal-fired power plants as well as oil and gas extraction and pipeline programs and simultaneously urge similar agencies in other countries to do the same. Preventing these agencies' support for harmful fossil fuel projects will reduce taxpayer support for environmental destruction.

Project Hurts Taxpayers Taxpayers should not support the increased risks of projects connected with environmental degradation. Ex-Im and OPIC are supposed to minimize the risks of projects they support. Instead, the agencies support controversial coal and oil and gas extraction projects. For instance, Ex-Im recently considered supporting a coal-fired power plant in Thailand, despite the fact that thousands of local citizens peacefully protested against building the plant last year. Unfortunately, the police injured dozens of these protesters. Now, the local citizens are threatening to burn the plant down if built because it would endanger their health and traditional livelihoods. If the project were to be shut down, U.S. funds could be lost. Similarly, pipeline projects in Yemen and Colombia were recently sabotaged. These projects illustrate that dirty coal plants and oil and gas extraction and pipeline programs can subject U.S. taxpayer dollars to unacceptable risks.

Taxpayers are at risk when agencies refuse to disclose what projects they support. U.S. taxpayers have a right to know what fossil fuel projects OPIC supports overseas. OPIC's Annual Reports provide Congress and taxpayers with an ambiguous and distorted picture. OPIC reports "commitments" to the public but not final signed contracts. Therefore, the public has no way of knowing whether or not a contract was actually signed, which would result in official U.S. financial exposure and could create debt for developing countries.

Project Hurts Environment These agencies must shift from supporting fossil fuel development to financing sustainable renewable energy and energy efficiency. OPIC and Ex-Im should be required to develop mechanisms that allow for at least a 20 percent shift towards clean renewable energy spending over the next five years. By funding clean energy rather than fossil fuels, OPIC and Ex-Im would benefit U.S. businesses, taxpayers and the environment. The Green Scissors recommendations would level the playing field for the U.S. renewable energy industry, which lags far behind that of Europe and Japan.

Coal-fired power plants release carbon dioxide into the atmosphere, and the global environment pays the price. Burning coal for energy contributes to acid rain and global warming. Moreover, coal-fired power plants pose serious health threats, particularly to children and the elderly, by contributing to smog-forming nitrogen oxide, soot-creating sulfur dioxide, and mercury contamination.

Ending funding for coal-fired power plants will strengthen environmental standards already set by OPIC and Ex-Im. Moving away from overseas support of coal will facilitate environmentally sound energy development in the developing world, enabling these countries to meet their energy needs in the cleanest way possible.

Oil and gas extraction and pipeline projects are socially and environmentally devastating. Oil, gas and mining projects enable wealthy multinational corporations to extract resources and profits from poor countries. They fuel long-term dependence on fossil fuels, contributing to global climate change, pollution to the air, water and land and deforestation.