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PRIVATE
PROFITS, PUBLIC RISKS: EXAMPLES OF SOCIAL AND ENVIRONMENTAL IMPACTS OF ECA
PROJECTS II. SUBSIDIES TO FOSSIL FUELS Problem: From 1994 through the first quarter of 1999, ECAs from Europe, Japan, Canada, and the United States supported $103 billion in exports or investments for fossil-fueled power generation, oil and gas development, transportation infrastructure, aircraft sales, and energy-intensive manufacturing (such as petrochemicals, pulp and paper, and iron and steel) in developing countries. From the middle to late 1990s, just over 70 percent of ECA-supported projects ($73.8 billion) were concentrated in two sectors: fossil-fueled power and oil and gas development. By contrast, renewable energy projects co-financed by ECAs totaled only about $2 billion. Between 1992 and 2000, OPIC and ExIm alone financed $28 billion in oil, gas and coal mining, drilling and power projects around the world. Yet ECAs are currently not required to report on the projected greenhouse gas emissions of energy projects they finance. The leading destinations for this financing include some of the largest developing country sources of greenhouse gas emissions: Brazil, China, India, Indonesia, and Mexico. US President George W. Bush recently backed away from the Kyoto Protocol, saying the US would not sign the treaty if developing nations do not reduce their own greenhouse gases. Yet the US export credit agencies are some of the leading backers of fossil fuel projects in the developing world. In establishing uniform environmental standards for ECAs, one requirement should be for ECAs to report on the projected lifetime and annual carbon dioxide emissions associated with projects they co-finance, guarantee or insure. ECA involvement: The leading sources of financing for energy-intensive projects and exports are COFACE (France), the ECGD (UK), the EDC (Canada), JBIC (Japan), ExIm (United States), Hermes (Germany), Kreditanstalt für Wiederaufbau (Germany),OPIC (United States), and Sezione Speciale Per l'Assicurazione Del Credito All'Esportazione (Italy). For more information contact: Crecencia Mauer, World Resources Institute, +1 (202) 729-7600; www.wri.org ### Previous
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