Two U.S. agencies agreed today to address carbon dioxide emissions when financing overseas oil and gas projects to settle a lawsuit brought by environmentalists and four local governments.
Under the agreement, the Export-Import Bank must begin accounting for CO2 emissions when evaluating fossil-fuel projects and will create an organization-wide carbon policy, and the Overseas Private Investment Corp. (OPIC) must set a goal to reduce major projects' emissions by 20 percent.
Both agencies must also commit to increase funding for renewable energy projects.
Friends of the Earth, Greenpeace and Boulder, Colo., sued the agencies in 2002, accusing them of violating the National Environmental Policy Act by providing more than $32 billion for fossil-fuel projects without assessing their impacts on climate change (Greenwire, April 13, 2006). Three California cities joined the lawsuit in 2006.
Fossil-fuel projects funded by the agencies between 1990 and 2003 produced the equivalent of nearly 8 percent of global CO2 emissions, the groups said.
"This settlement is a substantial victory for our climate," said Michelle Chan, senior policy analyst at Friends of the Earth. "It will force federal agencies to move away from fossil fuel projects and account for the climate impacts of their lending."
Phil Cogan, a spokesman for the Export-Import Bank, said the agency was pleased with the settlement. "The actions that we have agreed to take extend the efforts in promoting the environmentally friendly exports and concern for the environment that we've been leading the other exporters in since the early 1990s," he said.
OPIC helps U.S. companies invest overseas through direct loans and loan guaranties. Congress created the Export-Import Bank to be the nation's official export credit agency.
Click here to read the agreement.