Friday, November 13, 2015

The U.S. and Japan Are Close to Reaching a Major Agreement on Coal

In this Tuesday, Feb. 24, 2015 photo, a worker sprays water in the switchyard area of the under- construction coal-fired power plant, partially financed by the Japan Bank for International Cooperation, in Kudgi, India. (Credit: AP Photo/Aijaz Rahi) Click to Enlarge.
Japan is the largest exporter of coal finance in the world, to the tune of more than $20 billion between 2007 and 2014.

According to a comprehensive report by Oil Change International, more than three-quarters of the money that goes to coal financing goes to building new power plants.

In other words, it’s big business for Japan. The way the financing mechanism generally works is that a Japanese power plant company would go to the JBIC with a project, often in a developing country, where financing is either difficult or the economic outlook is uncertain.  The JBIC would supply the funding — with the goal, often, of bringing jobs and investment to a place that needs it — and the Japanese company would do the project, with all its accompanying risk and reward.  (There are other reasons the JBIC would fund projects, like this LNG export terminal in Texas, which is intended to help supply the country with American-fracked natural gas.)

But pressure to stop financing coal has been steadily building.  In 2013, President Obama announced that the United States would stop funding coal plants overseas (except in rare cases), and the World Bank followed suit shortly thereafter.  Since then, the United States has been pushing member countries of the Organization of Economic Cooperation and Development (OECD) to get on board.

Read more at The U.S. and Japan Are Close to Reaching a Major Agreement on Coal

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