At home, coal-fired power plants are about to get a little bit cleaner, due in large part to President Barack Obama’s executive actions on climate change. Congress, however, could undo some of the environmental gains from Obama's plan by resuming financing for the world’s dirtiest plants abroad.
The Export-Import Bank, an independent agency that helps finance foreign purchases of U.S. exports, faces a shaky future: Democrats are generally in favor of reauthorizing Ex-Im for the 2015 fiscal year, while conservative Republicans want to stop funding what they call "crony capitalism." But if Ex-Im is reauthorized, it may be at the expense of an agency policy, announced in December, not to finance most coal power plants that don’t include pollution controls known as carbon capture and storage. Both the House and Senate reauthorization bills—the latter pushed by coal-state Democrat Joe Manchin—would allow plants to receive loans even if they fail to install the greener technology. (Ex-Im's fossil fuel investments in 2012 accounted for $7.2 billion of $32 billion in spending, the second-largest share of the bank’s portfolio.)
The December policy ended a practice that put the bank directly at odds with the Obama administration’s climate change priorities and contradicted Ex-Im’s charted mission to consider the “environmental effects” of its actions. But it never had a real chance to be fully implemented, thanks to Congress. Congress watered the ban down in January, so the policy wouldn’t impact U.S. exports or power supply in poor nations. Congressional Democrats said the environmental concessions were minor given that Republicans’ energy wish list included everything from mandating Keystone XL’s approval to circumventing the Environmental Protection Agency’s plan to cut coal pollution.
If Congress passes this exemption for foreign plants, it will reinforce America's role as one of the world's biggest public financers of coal, even as organizations like the World Bank have cut funding for such projects.
Rebecca Leber is a staff writer for The New Republic.