June 25 (Bloomberg) -- President Barack Obama pledged to end U.S. government financing of overseas coal projects, a promise that could end millions of dollars in support for power plants in nations such as Vietnam and India.
As part of a “Climate Action Plan” released today, Obama called for ending U.S. support of foreign coal-fired power plants, unless they are in the poorest nations or have expensive carbon-capture technology.
“This is an important move to stand up and say, ‘Coal is not an acceptable fuel source for the 21st century,’” Justin Guay, a Washington representative for the Sierra Club, said in an interview. “It’s a really strong political signal.”
Until now, Obama’s push to double exports of U.S. goods and services had conflicted with his environmental goal of reducing the greenhouse gases linked to climate change, as the U.S.- backed Export-Import Bank had expanded financing that, by its own accounting, led to more and more greenhouse-gas emissions.
The bank has provided hundreds of millions of dollars to back coal plants in India and South Africa, as well as support for exports of U.S.-mined coal. After evaluating two coal plants in Vietnam, according to information its website earlier today, a bank spokesman late today said one proposal was withdrawn for lack of documentation.
The White House announced the policy change as part of an overall climate strategy without mentioning the bank.
“I am committed to working with the bank’s board of directors to implement President Obama’s new initiative to reduce greenhouse gas emissions, including his call to end public financing for most new coal-fired power plants overseas,” Ex-Im President Fred Hochberg said in a statement.
Ex-Im Bank financing for fossil-fuel projects reached a record $9.6 billion in the 2012 fiscal year, almost double the 2011 total and five times the funding in the final year of the Bush administration, according to Ex-Im data compiled by the environment group Pacific Environment. In addition to coal plants, the lender supports oil-field exploration, pipelines, refineries and gas-fired power plants.
The Export-Import Bank works to boost U.S. sales overseas by providing government-backed loans or guarantees to exporters. It also can fund a share of overseas projects, by backing the sales of U.S. products or services.
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