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Coalition seeks to limit financing for coal

World Coal,

The Netherlands, the UK and the US are set to float a new plan aimed at limiting funding for coal. The new plan would require new coal-fired power plants to meet a carbon pollution standard in order to receive public funding from the world's wealthiest countries, according to a draft seen by Reuters.

The countries will present the plan to the Organization for Economic Cooperation and Development's (OECD) exports credits group, which started a week-long meeting on Monday.

Restrictions on export credits for coal-fired projects would be the latest move by international organisations to try to lower carbon pollution. The main target of these moves has been the coal industry, with announcements made last year by the European Bank, the World Bank, as well as the US and UK governments, that they will limit financing of coal projects.

Delegates to the Paris-based organisation will discuss, among other topics, "how officially supported export credit programs might contribute to the common goal of addressing climate change," said David Drysdale, head of the OECD's export credit division.

Export credit agencies from OECD countries were responsible for 60% of public support, or roughly US$ 32 billion, for coal projects abroad between 2007 and 2013, according to ECA Watch. Of that, Japan accounted for nearly half.

The US-UK-Dutch proposal suggests OECD countries discuss whether to require any new power plant to meet a carbon emission standard, similar to one proposed by the US Environmental Protection Agency (EPA) in September for new US facilities.

"We propose a fulsome discussion of a carbon emission performance standard in the context of broader efforts to use export credit policy to combat climate change, including of how incentives and conditions could reinforce each other," the draft said.

Coal industry view

The coal industry, however, has often challenged attempts to limit funding of coal. Industry professionals have often explained passionately that if countries turn their backs on an energy source that is cheap and abundant, they are locking both themselves and the tax-payer into high energy prices and less bountiful power and electricity.

The US coal industry has said proposals to limit coal financing jeopardise its ability to export its product to poor countries attempting to grow out of poverty.

Luke Popovich, a spokesman for the National Mining Association, said that little thought has been given to the 3.5 billion people on the planet living in energy poverty. These people “certainly won’t have access to the electricity and energy they need in their lifetimes, unless coal generates it.”

Milton Catelin, CEO of the World Coal Association, explained that, when people around the world “lack any form of access to energy, we should be balancing the urgent need to address global warming alongside the need to alleviate energy poverty. Divestment campaigns are not solutions to either of these challenges.”

Edited from various sources by Sam Dodson

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