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U.S. financing groups pledge change on climate policies

In a settlement, U.S. Export-Import Bank and the Overseas Private Investment Corp. agree to account for their projects' effects on global warming.

February 07, 2009|Margot Roosevelt

The government's major financing agencies for overseas development projects reversed direction Friday, committing to scrutinize fossil-fuel facilities for their effect on global warming and pledging to help build renewable energy plants abroad.

The decision was revealed in settlement agreements filed in U.S. District Court in San Francisco in a lawsuit brought by two environmental groups, Greenpeace and Friends of the Earth, against the U.S. Export-Import Bank and the Overseas Private Investment Corp. in 2002.

The environmental groups were joined by three California cities -- Santa Monica, Oakland and Arcata -- along with Boulder, Colo. The cities argued that carbon dioxide spewed into the atmosphere by such U.S.-financed projects as oil refineries and gas pipelines in India or Russia affect the Earth's climate. And global warming, the suit argued, influences Santa Monica's water supply, the sea level near Oakland's airport and the snow on Rocky Mountain ski slopes.

From 1995 to 2006, the Ex-Im Bank and OPIC provided more than $21 billion in loans and loan guarantees for oil refineries, pipeline projects, liquefied natural gas plants and electric power plants around the world, according to a Times investigation in 2007. An analysis of a sample of 48 projects in Russia, Mexico, Venezuela, Algeria, China, Brazil, Turkey and India found that they would emit 12 billion metric tons of planet-heating carbon dioxide emissions over their lifetime, or at least 600 million metric tons a year.

The Bush administration had argued that the two agencies were not subject to the National Environmental Policy Act, which requires government projects to include impact statements. It had also contended that the "alleged impacts of global climate change are too remote and speculative" to be part of the agencies' project reviews.

Under the settlements, the agencies agreed to account for the effects on climate in financing future projects and spend $250 million each on renewable energy projects overseas. In addition, OPIC set a goal of reducing greenhouse gas emissions from its projects by 20%.

The agencies' change of heart came as the Obama administration has committed to a new direction in climate policy. It has moved to grant California and other states the right to regulate greenhouse gas emissions from automobiles and endorsed efforts to craft national climate legislation, as well an international treaty limiting emissions.

"When we launched this lawsuit in 2002, we were deep in the Bush global warming dark ages," said Kert Davies, research director of Greenpeace. "Now [we] hope that sweeping reform of global warming policy will reach every corner of the government."

The amount of carbon dioxide, which traps heat in the atmosphere, has risen rapidly since the industrial revolution. There are now 387 parts per million of CO2 in the air, the highest figure for 650,000 years. Many climate scientists say the world has only 10 years or so to halt increases in greenhouse gas emissions or face dangerous climate change including more droughts, floods and a rising sea level.

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margot.roosevelt@latimes.com

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