Banks to Consider Climate Before Investing in Coal
NEW YORK, Feb 7 (OneWorld) - Environmental campaigners scored a major victory this week as some of the nation's top banks agreed to link energy sector investment with initiatives to combat climate change.
In order to implement their new approach towards energy sector investment, the three leading financial institutions have developed certain guidelines, which they called "The Carbon Principles." Under these Principles, companies seeking to build new coal-fired power plants will have to produce specific plans to address the carbon dioxide (CO2) pollution that would be created. Scientists say electricity generation is responsible for one quarter of the world's total CO2 emissions -- a leading cause of global warming.
"The days of 'business as usual' for coal are over," said Mark Brownstein, managing director of business partnerships for Environmental Defense, a nonprofit law firm and advocacy group based in Washington, DC. "Leading utilities and financial institutions recognize this," Brownstein added in a statement. "Project developers and their investors can no longer claim that carbon dioxide pollution doesn't matter." Though pleased with the banks' new pledge, Brownstein and others noted that the Principles were meant to produce only limited results. In their view, it's just a first step in recognizing the climate risks associated with financing coal plants. The Principles are limited, they said, by their lack of any binding commitments and their failure to address the impact of destructive coal extraction methods such as mountaintop removal mining. "The proof is in the pollution," said Rebecca Tarbotton, director of Rainforest Action Network's (RAN) global finance campaign. "If this policy prevents the financing of new coal, it will be productive." Both RAN and Environmental Defense are part of a nationwide campaign that forced the banks to commit to new investment guidelines. For more than a year, RAN and other groups have been calling on banks to end all coal financing and set meaningful targets for reducing their investments. In Tarbotton's analysis, the growing public support for a moratorium on new coal power plants is finally influencing bank policy. However, because the new Principles do not set firm reduction targets for investing in the coal sector, environmentalists say they will continue to put pressure on the banks to do more.
In the past, RAN activists successfully challenged several of the world's largest banks -- including Citibank, Bank of America, JPMorgan Chase, and others -- to adopt pro-environment and human rights lending policies. Independent researchers say U.S. power plants account for fully 25 percent of the CO2 emissions generated by the power sector worldwide. According to the first-ever inventory of the world's 50,000 power plants, conducted by the Center for Global Development, a Washington, DC-based policy think tank, half of the "dirty dozen" plants in the United States are located in just three states -- Georgia, Texas, and Indiana. All 12 are coal-fired plants. Among them, the top CO2 polluter is Southern Co., which annually releases 172 million tons of CO2 into the atmosphere. The second largest CO2 polluter is American Electric Power Company Inc., followed by Duke Energy Corporation and AES Corporation. The Center's new Carbon Monitoring for Action (CARMA) Web site reveals that, on a per capita basis, Australia has become the world's number one carbon emitter in the power sector, although, in overall terms, the United States still remains the largest polluter. ....................................................................................
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