About this time last year, Republicans in Congress voted for the 37th time to repeal the Affordable Care Act. This year, with the new healthcare law enjoying broad success and even the most strident opponents of healthcare reform falling silent, the new boogeyman for the Republican Party is the Obama administration’s plan to cut carbon emissions from power plants through EPA action. Republicans have vowed to defund the EPA and have introduced legislation to repeal the new EPA rule, in two strategies that have about as much chance of success as their 54 votes to repeal the ACA.
But as conservatives grandstand about the Obama administration’s “war on coal” in the run-up to the midterm elections this fall, a truly viable threat to the Obama climate plan has emerged quietly from unlikely quarters: Senate Democrats.
The importance of keeping this critical policy in place cannot be overstated. While the Export-Import Bank rule change has received little fanfare compared to more the high profile domestic carbon rule, scaling back U.S. financial support for coal plants abroad is just as urgent as shuttering them at home. Even as coal power has declined recently in the U.S. as a share of domestic energy production, global coal production has grown by over 69 percent since 2000, made possible by an almost 400 percent increase in financing for coal since 2005. Under President Obama, the Export-Import Bank has helped to drive that surge by investing more than $27 billion in international fossil-fuel projects, compared with less than $2 billion into clean energy.
But in the past year things have started to shift (slowly) in the right direction, with the Overseas Public Investment Corporation, the European Investment Bank, the World Bank, and mostly recently the Export-Import Bank announcing policies that limit international coal investments. Pushing public banks to adopt stronger rules limiting finance for coal power will be critical to the long-term goal of preventing the overall financial sector from bankrolling climate chaos. That’s why Rainforest Action Network and other groups have called on public banks to reject coal and instead fund truly green energy sources like wind and solar.
Undoing progress now at the nation’s largest international public bank would send the wrong signal to the entire financial sector, undermine the president's leverage to push other nations to take tough action on climate, and have devastating impacts for local communities in places like Tilaiya, India where the Export-Import Bank is considering backing an enormous 3,960 megawatt coal-fired power plant and on-site coal mine.
Senate Majority Leader Harry Reid (D-Nev.) and other Democratic leaders in Congress have vowed to stand tall and block any efforts to obstruct the President’s climate initiatives--at least, any efforts from Republicans. But Reid has indicated that a deal on international coal finance is in the works, and other outlets have reported that pro-coal language may be included in the final reauthorization bill to lure coal-backed Senators from both parties to support the measure.
It’s not hard to understand why Manchin, one of the top recipients of campaign contributions from the coal industry in Congress who has deep personal ties to coal companies, would use his leverage as chair of the Senate banking subcommittee to push for handouts to coal.
But it’s disappointing to see Reid appear poised to bow to pressure from a handful of coal state Democrats, after seeing him talk tough about supporting the president’s climate action plan, and slam Republicans for “denying reality” on climate.
Democrats have firmly rejected Republican attempts to undo the EPA carbon rules, but by considering undermining the coal export rule change, they’re on the verge of undermining Obama’s climate legacy themselves to please a few members of their own party in the pocket of Big Coal.
Starbuck is Climate Program director for the Rainforest Action Network.