Nov 11, 2015 - 6:00am
The Climate Institute has urged the Australian government not to undermine proposals from the USA, Japan and other advanced countries at the OECD level, which plan to direct billions of dollars into cleaner energy technologies in developing countries.
"Australia has an opportunity at next week’s meeting of the OECD to demonstrate its support for cleaner energy innovations in developing countries," said John Connor, CEO of The Climate Institute. “By supporting proposals from the USA, Japan and other OECD countries to curtail financing for the most polluting and least efficient coal projects in the world’s poor nations, Australia has an opportunity to help clear the path to cleaner energy technologies."
The role of export credit agencies in coal financing has been on the agenda of the OECD for nearly two years. Export credit agencies are government agencies that provide government-backed loans, guarantees and insurance to companies to do business overseas in developing countries. Australia's agency does not support coal power plants, but for countries like Japan they play an important role in financing billions of dollars’ worth of these projects in developing markets.
The USA and Japan have come to an informal agreement that could form the basis of an OECD statement on this issue in advance of the Paris Climate Summit in November/December.
“This agreement would essentially limit most export credit financing to the most efficient unabated coal plants, with some exceptions for the poorest nations. The World Bank, the USA and a number of EU countries have already moved unilaterally to implement controls on coal plant financing."
“While The Climate Institute would advocate stronger standards, the US-Japanese compromise proposal would be a step in the right direction.”
Behind the scenes, Australia is proposing an alternative that would support investments in older and more polluting “supercritical” coal power technology rather than restricting support mostly to “ultrasupercritical” coal fired generation in poorer nations.
“Why should we support lumping developing nations with anything but global best practice when it comes to energy options?” Connor asked.
"In advance of the Paris climate summit later in the month, it is very disappointing to hear reports of Australia pushing for older technology, more polluting, coal plants to be financed. Australia risks further enhancing an older reputation as a roadblock to innovation.”
"The Climate Institute encourages the Australian government to take a fresh look at its position and to cease undermining efforts to direct global capital to cleaner outcomes."
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