US will work to keep new coal plants from being built overseas

The Obama administration on Tuesday said it will seek to discourage the construction of coal plants in foreign countries through the World Bank and other multilateral development institutions.

The effort marks the latest step in President Obama’s initiative to combat the effects of global warming through executive power in lieu of action from the divided Congress. 


Under the new policy, the U.S. government will oppose public financing for coal projects in all but the world's poorest countries unless they meet standards on par with tough new proposed regulations for any new coal plants in the United States.

Opponents of the domestic regulation say those rules would preclude any new coal plants from being built in the U.S. because the necessary carbon capture and sequestration (CCS) technology is not yet available.

In insisting that the standards apply to overseas coal projects that get public assistance from multilateral development banks (MDB), the U.S. is effectively doubling down on the regulations.

“As developing economies embark on a journey towards a clean energy future, today’s announcement marks an important step in helping them reach this goal,” said Lael Brainard, the Treasury Department’s under secretary for international affairs.

“By encouraging the use of clean energy in multilateral development bank projects, we are furthering the U.S. efforts to address the urgent challenges of climate change,” she said.

Previously, the U.S. was already predisposed to oppose coal projects via its votes on the World Bank and other MDBs that provide financing for projects in developing countries.

The new policy further limits the exceptions to that position.

Under the new guidance, the U.S. would only support a coal project in the poorest nations — and only then if it uses best available technology, there are no cost effective alternatives and it is critical to development of the country in question.

The United State does not have sufficient voting share to block a project on its own, but the government could seek to build coalitions with likeminded nations to stop the flow of funding to coal projects that don’t meet the stringent requirements, the official said.

While the policy only applies to public financing, the administration believes it would act as an economic disincentive for any projects that do not meet the standards, particularly those that rely on a combination of public and private dollars.

"We believe that if public financing points the way, it will then facilitate private investment,” Brainard said.