Deal to curb coal financing has more holes than a sieve
Posted Nov. 18, 2015 / Posted by: Kate Colwell
PARIS, FRANCE – After nearly two years of discussions, the Organisation of Economic Cooperation and Development member countries have finally reached an agreement on reducing their support to some coal plants through their export credit agencies. The agreement comes a day after the G20 has reiterated its willingness to reduce inefficient fossil fuel subsidies and only 12 days before the start of COP21, the climate change conference. The agreement, which only covers some OECD-member export credit agency financing for coal power plants and leaves out financing for mining, transport and related coal infrastructure, won’t do what is needed to solve the climate crisis.
"Keep in mind that the OECD export credit agencies account for nearly half of publically supported coal internationally,” said Lucie Pinson, Private Finance Campaign at Friends of the Earth-France. “By ending its support, member countries of the OECD would have finally cut the financial base that keeps alive an industry in decline, and recognized their responsibility for climate change. But the elephant has given birth to a mouse, since the OECD has decided that public money could still be used to help the construction of many types of new coal plants, and thus fuel the climate crisis."
According to the International Energy Agency, limiting the rise in global temperature below 2 degrees Celsius requires the end of new coal power plants as well as the closing of two thirds of the existing stock by 2035. While the agreement puts some restrictions on financing for less efficient power plants, it still allows financing of ultrasupercritical coal power plants, particularly because of resistance from conservative countries, such as Korea and Australia.
"With so many loopholes, this agreement has more holes than a sieve," said Friends of the Earth U.S. International Policy Analyst Kate DeAngelis. "In a world where any new coal plant reinforces the climate crisis, the OECD is merely another forum for developed countries to close their eyes to the climate emergency and their duty to adopt solutions to the crisis for which they are mainly responsible."
One of the main limits is that the deal, which amends the Arrangement on Officially Supported Export Credits, does not cover a massive amount of non-Arrangement coal financing from these same agencies.
"We expect countries, especially Japan, to apply this agreement to every single coal transaction," said Rwhine Richter of Urgewald. "We will monitor very closely the implementation of the deal and will make public any coal transaction that will be supported by OECD members.”
Finally, the NGOs regret that the agreement, which will only entre into force in 2017, restricts financing for just some coal plants and fails to address much larger volumes of export credit agency support to all other other fossil fuels.
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Economics for the Earth,
/ Tags: Climate finance, Fossil fuels
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