Banks targeted in campaign to kill coal

www.environmental-finance.com
London, 4 October:

Bank of America and Citi are being asked to stop financing the coal industry, in a campaign launched this week by environmental activist group Rainforest Action Network (RAN). RAN wants to see banks investing in renewable energy rather than coal extraction and coal-fired electricity generation. Coal is the leading contributor to global warming in the US, the largest source of mercury and a top contributor to air pollution, the group said.

If the US goes ahead with current plans to build around 150 coal-fired power plants, it will make all other emissions reduction strategies pointless, said Bill McKibben, an environmentalist and author, at the launch of the campaign on Tuesday. McKibben said coal looks cheap at the moment, but impending legislation will put a cost on carbon and make coal-fired power much more expensive. “It may not be our goal, but our effect today will be to help these banks by keeping them out of the next big mess they’re heading for,” he said.

Leslie Lowe, energy and environment programme director at the Interfaith Center on Corporate Responsibility, said: “As investors, when we look at the proposition of financing 50-year assets that are going to add to the GHG emissions of this country and of the companies sponsoring these plants, we must step back and say ‘what are they thinking?’”

She gave short shrift to ‘clean’ coal technologies such as Integrated Gasification Combined Cycle (IGCC) and Carbon Capture and Storage (CCS). “While IGCC plants produce 20% less carbon dioxide (CO2) than conventional coal plants, they still emit more than twice as much CO2 as natural gas and cost 30% more than conventional coal plants. And that is without the cost of CCS technology, which has yet to be proven at utility scale,” Lowe said.

The decision to launch the campaign followed a dialogue between RAN and the banks it identified as leading financiers to the sector, Bank of America and Citi. But RAN’s global finance campaign director Rebecca Tarbotton said they were “keeping an eye” on other banks. She said that, as part of the campaign, the banks could expect to see street protests and shareholders actions. Neither bank would comment to Environmental Finance on whether they were stopping, or changing policy, on financing coal.

Bank of America spokesman Ernesto Anguilla said: "The reality is that, as a country, more than 50% of the electricity we all consume comes from coal. Bank of America is aggressively investing in and financing the development and use of cleaner renewable energies.” He added: “We will be issuing a report over the next several months detailing our efforts to reduce GHGs among our clients in our energy and utility portfolio.”

Citi said it is supportive of efforts to move forward on climate change and has committed $50 billion over the next 10 years for climate-friendly efforts. Citi was also recently recognised as number one among global banks by the Carbon Disclosure Project, a coalition of global investors with more than $41 trillion in assets, it added. RAN calculated that in 2006, Citi financed 200 times more money for fossil fuel energy than it did for alternative energy. At Bank of America, the figure was 100 times.