Obama Takes ‘War on Coal’ Global

The Treasury Department said Tuesday it is taking steps to cut U.S. support for coal-fired power plants worldwide in a move to combat global warming.

A German coal-fired power plant. 
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Coral Davenport
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Coral Davenport
Oct. 29, 2013, 11:40 a.m.

The Obama ad­min­is­tra­tion, after wield­ing its ex­ec­ut­ive muscle to fight cli­mate-change pol­lu­tion from U.S. coal plants, is now us­ing its in­flu­ence to block new coal-fired power plants world­wide.

In Septem­ber, the En­vir­on­ment­al Pro­tec­tion Agency an­nounced draft rules to slash pol­lu­tion from new U.S. coal-fired power plants — a move that, once fi­nal­ized, is ex­pec­ted to freeze con­struc­tion of U.S. coal plants, the chief con­trib­ut­or to car­bon pol­lu­tion. On Tues­day, the Treas­ury De­part­ment de­tailed its plans for end­ing U.S. sup­port for pub­lic fin­an­cing of con­struc­tion of new coal-fired power plants abroad, ex­cept un­der very lim­ited cir­cum­stances.

The move comes as one of a series ag­gress­ive ex­ec­ut­ive-branch ac­tions be­ing pushed by Pres­id­ent Obama as he seeks to fight cli­mate change without help from Con­gress. For years, Re­pub­lic­ans and the coal in­dustry have dubbed EPA reg­u­la­tion a “War on Coal” — and thou­sands of pro­test­ers ral­lied at the Cap­it­ol wav­ing “War on Coal” signs Tues­day just as a seni­or Treas­ury De­part­ment of­fi­cial was brief­ing re­port­ers on the ad­min­is­tra­tion’s plan to take the fight against coal from Wash­ing­ton to the world.

The of­fi­cial made clear that it’s the Obama ad­min­is­tra­tion’s in­tent to use every tool in its ar­sen­al — both ex­ec­ut­ive au­thor­ity and its glob­al in­flu­ence — to push en­ergy com­pan­ies and in­vestors away from coal and to­ward more cli­mate-friendly fuel sources, in­clud­ing sol­ar and wind, but also nat­ur­al gas, which emits about half the car­bon pol­lu­tion of coal.

The U.S., which holds more votes than any oth­er coun­try in ap­prov­ing pro­jects fin­anced by the World Bank and oth­er glob­al fin­an­cial in­sti­tu­tions, can con­sist­ently vote against pub­lic fin­an­cing for any new coal pro­ject. While the U.S. alone can’t veto the pro­jects, with sup­port from a few like-minded gov­ern­ments, it can. And the World Bank, which has also re­cently re­ori­ented it­self to­ward fight­ing cli­mate change glob­ally, is ex­pec­ted to be a will­ing part­ner in help­ing the U.S. achieve that goal.

Al­though the new move will only lim­it pub­lic fin­an­cing for coal pro­jects — which is a small slice of glob­al en­ergy in­vest­ment — the Treas­ury of­fi­cial said the U.S. hopes the move will send a strong mes­sage to private in­vestors about the vi­ab­il­ity of fin­an­cing coal pro­jects any­where in the world.

“We be­lieve that if pub­lic fin­an­cing points the way, it will then fa­cil­it­ate private in­vest­ment,” said Lael Brainard, Treas­ury’s un­der­sec­ret­ary for in­ter­na­tion­al af­fairs.

The of­fi­cial said that Treas­ury will use its in­flu­ence on pub­lic-fin­an­cing pro­jects to push de­vel­op­ment banks and key play­ers in pub­lic in­vest­ment in the dir­ec­tion of clean­er sources of en­ergy. The hope, said the of­fi­cial, is to cre­ate a broad­er ripple ef­fect — that when private in­vestors see gov­ern­ments end­ing fin­an­cial back­ing in coal, they’ll also be scared away.

The Treas­ury De­part­ment’s coal-plant guidelines are modeled after last month’s EPA rules. Those rules re­quire that new coal plants built in the U.S. lim­it their emis­sions to less than 1,100 pounds of car­bon pol­lu­tion per mega­watt-hour — slightly more than half the car­bon pol­lu­tion now pro­duced by a typ­ic­al coal-powered plant. The only way a coal plant own­er could meet those re­quire­ments would be by in­stalling ex­pens­ive “car­bon cap­ture and se­quest­ra­tion” tech­no­logy. While the tech­no­logy, which traps car­bon pol­lu­tion and in­jects it un­der­ground be­fore it spews out of smokestacks, is com­mer­cially avail­able, it could cost power com­pan­ies bil­lions of dol­lars to in­stall. In­stead, it’s ex­pec­ted that power com­pan­ies will simply in­vest in gen­er­at­ing elec­tri­city from oth­er, less-pol­lut­ing forms of elec­tri­city, chiefly nat­ur­al gas, which emits just half the car­bon pol­lu­tion of coal, but also wind, sol­ar, and nuc­le­ar en­ergy.

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