The U.S. Treasury Department has announced that the country will formally support a proposal to end official financing for so-called unabated coal power.
The United States said it will co-sponsor a proposal Wednesday at the Organisation for Economic Co-operation and Development’s meeting of participants to the Arrangement on Officially Supported Export Credits. The proposal seeks to end export financing for coal power plans that don’t include carbon capture, utilization, and sequestration technology, according to the Treasury. Canada, the European Union, South Korea, Norway, Switzerland, and the United Kingdom are also expected to be co-sponsors.
“We encourage all our international partners to join us in ending public sector export finance support for coal power and shifting to renewable sources of energy,” the Treasury Department said in a statement.
How major economies are funding 'carbon lock-in' abroad
The three largest economies' overseas financing has led to 233 gigawatts in new power capacity since 2005, with the overwhelming majority relying on fossil fuels.
Background: The move is part of a broader U.S. government policy to end the use of public resources for coal power, and it is in line with a series of executive orders on climate change from President Joe Biden’s administration. The Treasury Department also recently released fossil fuel guidance for multilateral development banks.
What’s next: If adopted, the proposal would expand commitments made as part of a prior OECD guideline: the Sector Understanding on Export Credits for Coal-Fired Electricity Generation Projects.
Why it matters: This is an example of a concrete action that some of the world’s top emitters are taking to further align their policies with the Paris climate agreement. With the United Nations’ Climate Change Conference approaching, all eyes are on some of the major economies for steps they might take to address the climate crisis.
About the author
Adva Saldinger@AdvaSal
Adva Saldinger is a Senior Reporter at Devex where she covers development finance, as well as U.S. foreign aid policy. Adva explores the role the private sector and private capital play in development and authors the weekly Devex Invested newsletter bringing the latest news on the role of business and finance in addressing global challenges. A journalist with more than 10 years of experience, she has worked at several newspapers in the U.S. and lived in both Ghana and South Africa.
