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Stop Government Funding of Coal

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This post was co-written by Bruce Nilles and Mark Kresowik, Director and Corporate Accountability and Finance Representative, respectively, for the Sierra Club Beyond Coal Campaign.

"How good will the business judgment of companies that make high-carbon choices now look in five, 10, 20 years, when it becomes clear that heavily polluting infrastructure has become deadly and must be phased out before the end of its useful life?"
- Todd Stern, U.S. State Department Special Envoy on Climate Change

This is the quote we have on our Beyond Coal Corporate Accountability and Finance page because it sums up the problem with funding coal plants. The only thing we'd add to it is this: then why is our government still subsidizing more expensive and dirty coal plants?

It's true, the U.S. is still actively playing an active role in the funding of coal plants - both domestically and internationally - which is contradictory to President Obama's pledge to phase out fossil fuel subsidies with the G-20. Let's talk international first.

There are two women from Sasolburg, South Africa, in Washington, DC, this week fighting for the health - physical and economic - of their community. The World Bank is currently considering a $3.75 billion loan to South African company Eskom for the construction of a 4,800 megawatt coal plant. This proposed coal plant would be the fourth largest coal plant in the world.

These two women, Makoma Lekalakala and Caroline Ntaopane, are here on behalf of more than 70 South African groups who oppose this loan, including the South African Council of Churches and Earthlife. These groups have asked the Sierra Club Beyond Coal team for help getting the U.S., the largest monetary supporter of the World Bank, to stop the loan.

The World Bank's mission is to alleviate poverty, and Eskom officials claim the coal plant is going to help the poor get access to electricity.But hearing Makoma and Caroline describe how their community's electricity rates are tripling over the next five years in order to pay for this plant and the other planned coal and nuclear power plants proposed by Eskom, the subsidized electric rates for major industrial polluters like mining giant BHP Billion, and the harmful pollution from coal mining and burning in Sasolburg and other South African communities, we know that this loan will do anything but help the poor.

The World Bank has no business financing coal-fired power plants. After the Copenhagen Climate talks in December the World Bank is positioning itself to lead financial support for mitigating the worst effects of global warming. How can the World Bank help fight climate change if its financing the problem - pollution from coal plants - in the first place?

And how can the U.S. cast away its power by abstaining, rather than voting against the loan, when the project clearly violates both World Bank rules and the Treasury Department's recently issued coal financing guidance? The Eskom plan is designed to serve major polluters instead of getting clean energy access to low income families in Africa, many of whom live off the grid and need decentralized solutions.

South Africa and some of the other developing countries have a point too: As long as our government is still subsidizing coal plants here at home, we'd look like hypocrites. Domestically, the U.S. is financing coal-fired power plants via the U.S. Department of Agriculture's (USDA) Rural Utilities Service (RUS) and the Department of Energy. But the Sierra Club's Beyond Coal team is leading the fight against these fossil fuel subsidies as well.

We're standing with the more than 50 electric co-op member rate-payers from Kentucky who wrote to the USDA last month asking for a formal review of RUS financial support for electric co-ops that are investing in and developing new and existing coal-fired power plants.

These 50 members are also seeing support from their peers and colleagues in eight other states, who have now made that same request. And these are electric cooperative member-ratepayers in the heart of coal country: Wyoming, Kentucky, Montana, Texas, Colorado, Alaska, Virginia, Georgia, and Kansas. Like Caroline and Makoma, they see firsthand that coal is bad for their environment and even worse for their pocketbooks. Whether you're in South Africa or Kentucky, coal will cause rate increases and the waste of federal taxpayer dollars.

If our leaders in the U.S. and beyond are serious alleviating poverty and combating climate change, they cannot be supporting new coal-fired power plants anywhere. We must all stand together to support clean energy and stop using coal power. It is past time for the U.S. to phase out fossil fuel subsidies.

Join us in telling U.S. Treasury Secretary Timothy Geithner to ensure the U.S. votes against any World Bank loans for dirty coal.