The U.S. Department of the Treasury issued updated technical guidance Oct. 29 to implement a key section of President Obama’s Climate Action Plan (CAP) by restricting support of coal-fired power plants overseas.
This action helps lead global sector public financing towards cleaner energy by ending U.S. support for multilateral development bank (MDB) funding for new overseas coal projects except in “narrowly defined circumstances,” the Treasury Department said in a statement.
Treasury first released guidance in December 2009 to help curb funding of coal plants at the multilateral development banks, setting a policy for the United States to not support coal projects except in rare circumstances. The new announcement builds on the 2009 policy by further curtailing U.S. support for overseas coal plants and narrowing exceptions.
Specifically, today’s guidance ends U.S. government support for public financing of new coal plants overseas, except for (a) the most efficient coal technology available in the world’s poorest countries in cases where no other economically feasible alternative exists, or (b) facilities deploying carbon capture and sequestration technologies.
The Obama administration said it will actively encourage other countries and development banks to adopt similar policies.
President Obama and the leaders of Denmark, Finland, Iceland, Norway, and Sweden last month announced cooperation to end public financing for new coal-fired power plants overseas, except in rare circumstances and to work toward countering climate change and accelerating the transition to a sustainable energy future.
“At the pre-appraisal stage of the project cycle, the MDB should incorporate procedures that ensure full consideration of no or low carbon options before appraising a proposed greenfield or retrofit coal-fired power generation project for domestic power consumption or export,” according to the new policy.