and Climate Change
Did You Know?
ECAs are currently the main public financiers of energy projects contributing to climate change.
A significant portion of ECA project financing in developing countries is concentrated in sectors that have important implications for climate change. From 1994 through the first quarter of 1999, ECAs from Europe, Japan,
Canada, and the United States supported USD $103B 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.
Most ECAs have no formal environmental assessment policies, disclose
little environmental information to the public, and do not evaluate the
emissions of projects they finance. They perpetrate environmental devastation and destruction of local communities' livelihood worldwide.
"The new catch-cry of the nuclear industry is that nuclear energy is the answer to global climate change. Nuclear energy is toxic and dangerous. Far from being rehabilitated, the nuclear option is a convenient distraction from the problem of climate change and stalls real
action to combat it."
-Greenpeace Australia, in an April 2005 press release [PDF]
Activists gain easy access to a nuclear reactor.
Photo Credit: Greenpeace Australia (December 2001)
Important Background Documents on Energy and Climate Change
Transition from Fossil to Renewable Energy Systems: What Role For Export Credit Agencies? [PDF] 2002 by
the World Resources Institute
Climate of Export Credit Agencies 2000 by Crescencia Maurer, the World Resources Institute
Recommendations from Friends of the Earth to the ECGD regarding Sustainable Energy and Climate Change May 23, 2002 by Kate Hampton, International Coordinator, Climate Change Campaign, Friends of the Earth UK, for the UK Seminar on Export Credit Agency Reform "Beyond Business Principles," House of Commons.
Climate Change Lawsuit Summary:
Friends of the Earth, Greenpeace and the cities of Oakland, California, and Boulder, Colorado, are in the process of suing OPIC and US ExIm Bank because of their lack of a policy to protect the planet from climate change. The plaintiffs complain of the US ECAs providing "over $32 billion in financing and insurance for oil fields, pipelines and coal-fired power plants over the past 10 years without assessing their contribution to global warming and their impact on the US environment."
The OECD Renewable Energy Policy Summary:
The OECD is facilitating negotiations to include hydropower under an arrangement for subsidies for renewable energy projects (approved in April 2005). This arrangement for new financing incentives for renewable energy projects includes trojan horses such as the eligibility of large dams, which generate massive and irreversible social and environmental damages, and incentives for private investment in water projects, investment which has a history of failing to ensure the supply of clean and affordable water. Including subsidies for large dams and water privatization detracts from genuine efforts to create a level playing field between renewable energy projects and nuclear and fossil fuel projects.
Nuclear Projects Summary:
Global climate change is here and getting worse. As governments seek alternatives to the carbon-based fuels cooking our planet, many of them turn to nuclear power as an obvious answer:
fission produces no greenhouse gases. It is, however, both risky and expensive. In one 2005 article (SF Chronicle), it was noted that in the US,
despite more than USD $150B in federal subsides over the past 60 years (roughly 30 times more than solar, wind and other renewable energy sources received), nuclear power still costs substantially more than electricity made from wind, coal, oil or natural gas: mainly due to the cost of borrowing money for the decade or more it usually takes to get a nuclear plant up and running. Even though most Western countries have not built any nuclear power
plants in their own countries in decades, their ECAs have kept their
nuclear industries alive by supporting the proliferation of nuclear
plants and technology in other countries. According to a 2003 article, in 2001, there were 19
nuclear power plants being built in the world outside the G8 countries. 14 of them were being supported by the ECAs of the G8 countries, thereby maintaining the domestic nuclear power
manufacturing base until-- the industry hopes-- new orders resume at home.
ECAs, Aircraft, and Climate Change Summary:
ECAs allocate about a third of their long-term financing to aircraft sales (36% between 1998-2002), the largest representation of any sector in their portfolios. These aircraft are a major source of greenhouse gases, contributing to global climate change.
Unless the boom in cheap flights and inexpensive financing for aircraft purchases comes to an end, many Kyoto Protocol signatory countries will simply not be able to meet targets for cutting back on the emissions of carbon dioxide (CO2) that are causing the atmosphere to warm, with potentially disastrous consequences. One 2005 article (iNSnet) states that
aviation could contribute 15% of greenhouse gases each year if unchecked.
Cloud of Concern Surrounds China's Nuclear Boom June 6, 2005 (Mid East North Africa Financial Network) — The US Nuclear Regulatory Commission has cleared the transfer of technology while the US Export-Import bank has approved USD $5B in loan guarantees to support China's nuclear industry.
Groundbreaking Global Warming Lawsuit to Proceed August 25, 2005 (Source: Friends of the Earth Greenpeace) —A federal judge in the US District Court for the
Northern District of California ruled yesterday against the Bush
Administration and allowed a groundbreaking global warming lawsuit to proceed.
EU and China Partnership on Climate Change Includes ECAs September 5, 2005 (iSNet) The EU and China agreed on a Partnership on Climate Change as one of the major outcomes of the China-EU Summit.
Energy Efficiency Improvements at Existing Power Plants Are a More Cost-Effective Way of Increasing Supply than Building New Plants- ADB August 25, 2005
(China Development Brief)
US Ex-Im Backs Massive Bid to Build Nuclear Reactors in China - February 28, 2005 (AFP via NewsDesignerz.com) - also March 1, 2005 in the Taipei Times — "I'm sure there's cheaper ways to generate 5,000 jobs," said Michael Mariotte of the anti-nuclear Nuclear Information and Resource Service.
Green Groups Hope Suit Forces US Hand on Warming January 17 , 2005 (Planet Ark) — Green lobbyists and several US cities hope a lawsuit against US development agencies will force the government to act on global warming.
AirAsia Completes Loan Mandates to Finance 33 Aircraft September 5, 2004 (AirAsia Bhd)
Air Transport Given USD $7.3B ECA credit in 2003 June 14, 2005
Export Agencies Sued Over Warming August 27, 2002 (The Washington Post)
Nuclear Power Ministry Cost Russia Billions March 16, 2001 (Moscow Times)
Russia's Nuclear Power Ministry forced taxpayers to fund billions of dollars
worth of foreign nuclear reactor contracts by allowing buyers like Iran
and China to pay through federal loans, according to Moscow-based environmental groups
Ecodefense and the Social-Ecological Union.
For more information, contact the ECA Watch Facilitator.
ECA Watch Campaign Member Links:
Friends of the Earth US, Jon Sohn - www.foe.org
Urgewald, Regine Richter - www.urgewald.de
Institute for Policy Studies/ SEEN,
Daphne Wysham - www.seen.org