Will The U.S. Export Import Bank Continue to Fund Dirty Fuels Projects?
Like a moth to the flame, U.S. Export-Import Bank (Ex Im) Chairman Fred Hochberg has an affinity for controversial fossil fuel projects. Instead of shying away from coal plants and mines that destroy the communities, tank local economies, and endanger the climate, Ex Im uses our taxpayer dollars to support them.
Under Hochberg’s leadership, the bank has ignored a Congressional mandate to direct 10% of financing towards renewables, and instead gone on a fossil fuel bender. Ex Im approved $900 million in financing for the 4,000 megawatt Sasan coal-fired power station in India, which displaced entire villages and used dangerous labor practices that lead to worker deaths. It directed $800 million in financing for the 4,800 MW Kusile power station in South Africa, despite local protests and the fact that the area around the project already exceeded pollution limits set by the South African government. Essentially, the Ex Im Bank is completely at odds with President Obama's desire to address climate change.
But it doesn’t have to be this way. An institution that is following President Obama's promise to lead on climate, is ExIm Bank’s sister organization - the Overseas Private Investment Corporation (OPIC). Thanks to a robust climate policy and strong leadership, OPIC financed over $1 billion in clean energy in 2013. Even better, they didn't support a single fossil fuel project.
Now that Hochberg has announced he will stay on as Ex Im Chairman in Obama's second term, he has a responsibility to live up to the high standards set by the President, become more like OPIC, and kick the fossil fuel habit.
We shouldn't have to wait long to see which path Hochberg will choose. Ex Im is circling not one, not two, but three dangerous coal projects that will serve as litmus tests.
The third project is Rio Tinto's Oyu Tolgoi mine in Mongolia, which ExIm will vote on this week. aside from being destructive in its own right, will also include a dangerous captive coal-fired power plant. Oyu Tolgoi has been a disaster from the start with two open investigations into impacts on local herders who rely on the region's scarce water resources to survive.
The U.S. government has already implicitly opposed Oyu Tolgoi by abstaining from a vote on a $900 million funding package from the World Bank's International Finance Corporation (IFC), citing water resources and the coal plant as major concerns.
Given the position U.S. Treasury took in that vote, rejecting financing for Oyu Tolgoi should be a no brainer for Hochberg. But Hochberg's legacy says otherwise. In 2010 the U.S. abstained from a vote on World Bank funding for the Medupi coal-fired power plant in South Africa, but a year later Ex Im ignored this guidance and approved $800 million in financing for Medupi's sister plant, Kusile.
If Fred Hochberg is going to stay on as Chairman of the U.S. Export-Import Bank, he must start living up to the clean energy agenda laid out by President Obama. Tell Fred Hochberg it's time for Ex Im to join the 21st century by rejecting fossil fuels and redirecting resources towards clean energy.
-- Nicole Ghio, Sierra Club Campaign Liaison