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Fury Over $500 Million US Export-Import Bank Loan to Bahrain 'Climate Bomb'
"This approval signals another setback for Biden's climate commitments, and cements the United States yet again as the worst of the laggard countries in violation of the promise to end international public finance for fossil fuels," one campaigner said.
Mar 15, 2024
Despite a Biden administration pledge to stop backing international fossil fuel projects by 2022, the U.S. Export-Import Bank announced Thursday that it would provide a $500 million loan for oil and gas expansion in Bahrain.
The funding marks the fifth time that EXIM has chosen to back a fossil fuel project abroad since President Joe Biden joined the Clean Energy Transition Partnership (CETP) at the United Nations COP26 climate conference in Glasgow in 2021.
"EXIM's decision to approve the Bahrain oil and gas project is another alarming step in the wrong direction for climate action, as the bank goes rogue and continues to defy President Biden's promises," Nina Pušic, an export finance climate strategist at Oil Change International, said in a statement, adding that the project was a "huge climate bomb paid for by the American taxpayer."
"This is the wrong decision. Our health, planet, and future are at stake—the U.S. must stop financing oil and gas expansion."
Signatories to CETP vowed to "end new direct public support for the international unabated fossil fuel energy sector by the end of 2022" and instead shift financing toward renewable energy projects. Yet an Oil Change analysis published in September found that countries including the U.S. continued to back fossil fuel projects after signing.
According to that analysis, the U.S. had approved the largest number of projects after the CETP's 2022 deadline to stop funding oil, gas, and coal. What's more, counting Thursday's $500 million, the EXIM has funded fossil fuel projects to the tune of $1.3 billion since the cut-off date.
"This approval signals another setback for Biden's climate commitments, and cements the United States yet again as the worst of the laggard countries in violation of the promise to end international public finance for fossil fuels," Pušic said.
In its announcement, EXIM said that the money, lent to Bahrain's semi-independent Bapco Energies, would support around 2,100 jobs in Texas and other U.S. states and "was not expected to result in a meaningful increase in oil and gas production." The bank pointed out that Bapco Energies had signed the COP28 Oil and Gas Decarbonization Charter, promising net-zero operations by 2050 and an end to flaring by 2030.
"This transaction will support thousands of U.S. jobs and play a crucial role in ensuring Bapco Energies is able to achieve its climate goals of enhanced grid interconnectivity, more efficiency, decarbonization, and investments in large-scale solar projects," EXIM President and Chair Reta Jo Lewis said in a statement.
However, EXIM told Congress when it first announced the potential funding that the project would create more than 400 new oil wells and 30 new gas wells, Reuters reported.
The announcement came two days after Democratic and Independent lawmakers led by Sen. Jeff Merkley (D-Ore.) sent a letter to the bank urging it not to fund the project "because of its negative impacts on the climate."
In the letter, the legislators pointed to the International Energy Agency's assessment that any new oil, gas, and coal investment was incompatible with the Paris agreement goal of limiting global heating to 1.5°C. Further, they noted that Congress had stipulated that EXIM should review the environmental and climate impact of projects when it reauthorized its charter in 2019.
"The world is in the midst of a climate crisis that is already having devastating impacts on millions of people across the globe," the letter concluded. "We cannot afford to have EXIM undermine domestic and international climate progress by financing projects that worsen this crisis. We urge you to take EXIM's mandate to consider the environmental impacts of projects seriously, and to start by disapproving new funding for oil and gas drilling in Bahrain."
"The United States has lost any credibility it had as a climate leader, and instead has proven to be led by forces like EXIM to prop up a dying industry while simultaneously killing its own people."
Instead of heeding the lawmakers' request, EXIM approved five times the amount of funds it had initially told Congress is was considering.
"We can't tackle climate chaos and lead the globe to a renewable energy economy if we keep greenlighting fossil energy of the past," Merkley said on social media in response to the news. "This is the wrong decision. Our health, planet, and future are at stake—the U.S. must stop financing oil and gas expansion."
The move comes as younger voters have warned Biden that he should double-down on climate friendly policies to encourage youth turnout in the 2024 presidential election. Writing in Common Dreams on Thursday, Noa Greene-Houvras, a 17-year-old climate activist with Fridays for Future NYC, encouraged the president to stand up to EXIM and back an OECD proposal to end the support of export credit agencies for oil and gas projects.
In a separate statement, Greene-Houvras said: "We are horrified at the decision to send $500 million to new oil projects in Bahrain. The United States has lost any credibility it had as a climate leader, and instead has proven to be led by forces like EXIM to prop up a dying industry while simultaneously killing its own people."
"As youth we are watching our future slip away, engulfed by fire and flood," Greene-Houvras continued, adding "We are both terrified and baffled at this decision making process, and we will not let this stand."
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‘The World Is Failing Forests’: Report Finds Leaders Way Off Track From Halting Deforestation by 2030
"We are investing in activities that are harmful for forests at far higher rates than we are investing in activities that are beneficial for forests," the assessment coordinator said.
Oct 24, 2023
Despite promising to halt global deforestation by 2030, world leaders have not done enough to protect forests, a new report has found.
The 2023 Forest Declaration Assessment, released late Monday, calculated that human activities destroyed 6.6 million hectares of forest in 2022, which means the world is 21% off track from meeting the 2030 deadline. In addition, 4.1 million hectares of especially vital primary tropical forests were cleared, 33% off where they need to be to stay on schedule.
"The world is failing forests with devastating consequences on a global scale," WWF Global Forests Lead Fran Price said in a statement. "It is impossible to reverse nature loss, address the climate crisis, and develop sustainable economies without forests."
The Forest Declaration Assessment has been published by a group of civil society organizations every year since 2015. Beginning last year, it started tracking the progress of governments towards the 2021 Glasgow Leaders' Declaration on Forests and Land Use, under which more than 100 nations attending the COP26 U.N. climate conference promised to "halt and reverse forest loss and land degradation by 2030."
"That 2030 goal is not just nice to have; it's essential for maintaining a livable climate for humanity," Erin Matson, senior consultant at Climate Focus and coordinator for the Forest Declaration Assessment, said during a press briefing ahead of the report's release.
Last year's report showed that deforestation had actually decreased by 6% compared to the baseline, which "was not enough, but it was progress," Matson said. "And it gave us hope that we could see continued progress in 2022."
"We really need to remember that every hectare of forest we lose pushes us further away from being able to keep global temperature rise to within 1.5°C, avoid irreversible tipping points, and restore nature."
Why wasn't that hope realized? The answer, Matson said, came down to money.
"We are investing in activities that are harmful for forests at far higher rates than we are investing in activities that are beneficial for forests," Matson explained.
Agriculture, including cattle ranching and the production of commodities like soy and palm oil, remains the leading cause of tropical deforestation. Yet Global Canopy found that, in 2022, 150 private financial institutions continued to channel $6.1 trillion to companies whose activities were likely to contribute to deforestation through commodity production, and two-thirds of the institutions did not have any policies in place to avoid investing in forest clearing. When it comes to public finance, between 2013 and 2018 governments invested $378 to $635 per year in "gray" finance—funding activities that could hurt forests—and only $26.5 billion total in "green" finance programs to protect them. That means that green finance flows were just $2.2 billion a year, or less than 1% of gray finance flows. Existing green finance also falls far short of the $460 billion a year that is needed to meet forest goals.
"We're financing deforestation through the products we buy and the activities that governments and businesses support through subsidies and investments," Mary Gagen, chief advisor on forests at WWF-UK, said during the briefing. "We really need to remember that every hectare of forest we lose pushes us further away from being able to keep global temperature rise to within 1.5°C, avoid irreversible tipping points, and restore nature."
There was some good news in the report. More than 50 countries are making enough progress to halt deforestation internally by the end of the decade, including Indonesia and Malaysia. Their success offers a potential road map for others.
"Much of their success is attributable to strong laws and enforcement, collaboration with the private sector and civil society, and strong support for and recognition for the rights of Indigenous peoples and local communities, as well as just sheer political will," Matson said.
The report also does not include data that reflects Brazilian President Luiz Inácio Lula da Silva's success at reducing Amazon deforestation in 2023 by enforcing environmental laws and respecting Indigenous rights after former right-wing President Jair Bolsonaro worked to erode them.
The report offered several recommendations for governments, private institutions, and civil society, including protecting and securing Indigenous land rights, boosting finance, and channeling subsidies away from industries and activities that harm forests and towards those that help. Overall, the report authors argued that the definition of "business as usual" had to change.
"Global economic models must be re-structured to value forests for the benefits that they provide over the long term, rather than for the superficial and short-term gain that comes with clearing them," the report authors wrote.
Alongside the assessment report, WWF released its Forest Pathways report, "the first ever comprehensive global blueprint on how to stop failing our forests," as Gagen put it.
The report outlines four pathways to protecting forests:
- Accelerating the recognition of Indigenous land rights;
- Mobilizing finance;
- Reforming global trade so that supply chains don't rely on commodities tied to deforestation; and
- Shifting the economy to value nature.
The conservation group also debuted a graphic of "forest stripes." Based on the famous "climate stripes" visualizing the warming of average temperatures, it shows in green to red the 79% decline of forest-dependent species from 1970 to 2018.
"We're at a critical juncture," Price said during the briefing. "We don't need new forest goals. We need uncompromising ambition, speed, and accountability by both governments and businesses to fulfill their existing goals."
Yet governments and corporations may not act on their own, especially as Matson does not expect forests to be a priority at the upcoming COP28 climate talks in United Arab Emirates this November and December.
"It's so much more important that citizens and the media and civil society keep our attention and pressure on world leaders to meet their shared responsibility on forests," Matson said. "Every country has to get on track or else we have little hope of meeting the 2030 goal."
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'A Huge Step Backward': US Export-Import Bank Approves Estonian Fossil Fuel Project
The approval comes as the nation has signed off on $1.5 billion for overseas oil and gas projects so far this year, even though it pledged to stop doing so by the end of 2022.
Oct 13, 2023
Despite President Joe Biden's commitment to end investments in overseas fossil fuel projects, the U.S. Export-Import Bank on Thursday agreed to fund the Liwathon oil tank project in Estonia.
The decision comes on top of the $1.5 billion that the U.S. has already promised to overseas oil and gas developments in 2023, in violation of a 2022 deadline to end international fossil finance.
"President Biden cannot claim climate wins while his U.S. Export-Import Bank is propping up a pollutive industry," Kate DeAngelis, senior international finance program manager for Friends of the Earth U.S., said in a statement. "EXIM spent the hottest months in history approving four major fossil fuel projects, demonstrating its disregard for the planet and all living beings. An institution that chooses polluters over people should not be trusted to follow President Biden's climate commitments."
"Biden and the United States risk becoming an international embarrassment with these retrograde approvals."
Biden signed an executive order in 2021 in which he promised to develop a climate finance plan that would promote "the flow of capital toward climate-aligned investments and away from high-carbon investments." Then, at the COP26 U.N. climate conference in Glasgow, Scotland, the U.S. joined 24 other countries and five financial institutions in pledging to stop funding "unabated fossil fuel energy" overseas by 2022.
Despite this, Oil Change International found in a September report that the U.S. had approved more money for international fossil fuel projects in 2023 than any other nation that agreed to stop.
"EXIM's decision to approve the Liwathon oil project is yet another concerning step in the wrong direction for climate action," Collin Rees, U.S. program manager at Oil Change International, said in a statement, calling the approval "yet another setback for President Joe Biden's climate commitments."
"Despite lofty promises and international agreements, Biden continues to approve projects that exacerbate our climate crisis and threaten communities," Rees continued. "As many other G-20 countries implement their commitment to end public finance for fossil fuels, Biden and the United States risk becoming an international embarrassment with these retrograde approvals."
In addition to the Liwathon approval, the EXIM specifically has already signed off on almost $100 million for an oil refinery in Indonesia, $240 million for an Iraqi gas development, and $400 million for Trafigura to support U.S. exports of liquefied natural gas (LNG), Friends of the Earth said. The bank is also weighing whether to fund Papua LNG in Papua New Guinea and oil and gas projects in Bahrain and Guyana.
Both the International Energy Agency and the Intergovernmental Panel on Climate Change have concluded that no new oil, gas, and coal developments are compatible with limiting global heating to 1.5°C above preindustrial levels. At the same time, Nina Pusic, export finance climate strategist at Oil Change International, argued that fossil finance goes against economic as well as scientific sense.
"Ultimately, using American taxpayer dollars to finance oil and gas infrastructure is not only an irresponsible use of public money from a climate perspective, but also risks creating stranded assets, as many regions of the world quickly transition to cleaner energy sources," Pusic said in a statement.
However, it's not too late to reverse course.
"The U.S. can help lead a shift of billions of dollars from last century's dirty energy into the clean, renewable energy of the future," Rees said, "but approvals like Liwathon are a huge step backward."
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