WASHINGTON – The U.S. Department of the Treasury today issued updated and revised technical guidance to implement a key section of President Obama's Climate Action Plan (CAP). 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. This step will help to level the playing field for clean energy alternatives and support low-emission power generation worldwide, including coal plants using carbon capture and sequestration technologies.
The policy document released today details how the United States will evaluate projects in line with the CAP and will guide U.S. votes on relevant projects at the World Bank and other MDBs.
"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 Treasury Under Secretary for International Affairs Lael Brainard. "By encouraging the use of clean energy in multilateral development bank projects, we are furthering U.S. efforts to address the urgent challenges of climate change."
Treasury has been leading these efforts to address climate change. The Department first released guidance on December 14, 2009 to help curb funding of coal plants at the multilateral development banks, setting a policy for the U.S. to not support coal projects except in rare circumstances. Today's 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. As part of this new commitment, we will work actively to secure the agreement of other countries and the multilateral development banks to adopt similar policies as soon as possible.
This guidance also advances global efforts to shift energy towards more renewable sources and the cleanest possible fossil fuels. For example, following President Obama's announcement of the CAP, the World Bank issued a principles-based strategy for its work in the energy sector with a focus on expanding energy access and sustainable energy. Additionally, 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.
In the coming months, Treasury will continue to work with the MDBs and other countries that share the United States' goal of shifting energy use towards low carbon sources. Treasury will also continue to work with other U.S. government agencies to promote the successful implementation of the CAP.
For the revised guidance published on the Treasury's website, click here.
For the White House fact sheet on President Obama's June 2013 CAP, click here.