Sierra Club Calls for Ex-Im Bank Reform
As the debate in Congress continues around the Export-Import Bank's reauthorization, the way forward is not entirely clear. Some Congressional Republicans believe that the bank should be abolished, while many others on both sides of the aisle believe it needs real reform. The Sierra Club believes that Congress should continue to push the Bank to reform its energy sector lending.
Congress should use the reauthorization process to conduct a rigorous assessment of the Export-Import Bank’s (Ex-Im) deficiencies, and to impose some commonsense reforms to ensure that Ex-Im’s activities do as much as possible to create U.S. jobs, promote competitiveness, and advance our national interests. This necessarily includes paying due regard to evolving global issues, such as the imperative to address the impacts of a changing climate.
If Congress really wants to explore ways to better enable Ex-Im to promote U.S. competitiveness in the evolving global marketplace, it should focus on reforming Ex-Im’s energy sector portfolio.
By 2020, clean energy will be one of the world’s biggest industries, totaling as much as $2.3 trillion. The vast majority of this investment is projected to take place outside of the United States, and American companies are in danger of being left behind by companies from countries such as Germany, China and Spain whose governments have done much more to advance their clean technology sectors.
Expanded support for clean energy exports is therefore essential for American competitiveness in this fast-growing, strategically important sector. Yet Ex-Im continues to neglect the clean energy sector in favor of providing massive support for fossil fuel companies. Over the last two years, Ex-Im provided a whopping $14.5 billion in financing to exports related to oil-and-gas development and refining, even though the carbon pollution that would result from burning existing fossil fuel reserves already far exceeds the amount that can be safely burned under any scientifically defensible scenario.
During the same period it provided only about $500 million dollars for clean energy and other climate friendly technologies--- less than one percent of its total financing. This is despite the fact that Congress has already directed Ex-Im to allocate at least 10 percent of its aggregate financing to clean energy or end-use energy efficiency technologies. Had Ex-Im simply followed this instruction, it would have already provided over $3.5 billion to support clean energy exports.
Ex-Im has taken a small step away from its lavish support for fossil fuels by adopting some limitations on its support for new coal plants. After putting this reform on hold in last year’s appropriations bill, the Republicans at the helm of the most anti-environmental House in history have these lending limits in their crosshairs and are seeking to permanently override them. At minimum, this restriction should be reinstated. And Congress should restrict Ex-Im’s support for other fossil fuel investments. In addition, Congress should require Ex-Im to come forward with a serious plan for meeting its long-time target of allocating 10 percent of its portfolio to clean energy and end-use efficiency technologies.
Congress has a golden opportunity to use this year’s reauthorization to catalyze support for U.S. clean energy exports. They must seize it. We urge Congress to take their time with this reauthorization to make sure that the Export-Import Bank is supporting jobs and American competitiveness in the energy technologies of the 21st century.
--Steve Herz, Sierra Club International Climate Program