This is a guest post by Joe Ware, Church & Campaigns Journalist at Christian Aid
‘Export Credit Guarantees’ have to be the most boring opening three words of any DeSmog Blog post. But so often the important stuff is buried in amongst the detail or hidden behind opaque bureaucracy which often induces stupor and indifference.
Like Yes Minister’s crafty Whitehall Civil Servant Sir Humphrey who buries the documents he wants ignored at the bottom of the pile, these dull-looking issues need some light shining on them.
Export Credit Guarantees is one area worth delving into. They are a way for governments to underwrite unpredictable investments from companies abroad by providing guarantees, insurance and advice that reduce the risk.
Ultimately it is the taxpayer who bears the risk, but all this tends to take place in the shadows because the investments tend to be on the “dodgy” side (otherwise they wouldn’t need the government as a backstop).
Supporting Fossil Fuels
Export credits cover a multitude of sins, but in recent years the spotlight has been on the role of these guarantees in supporting the fossil fuel industry, and particularly coal.
For example, UK Export Finance, the body that oversees export credits, allocated a whopping £1.13 billion to help fossil fuels in 2013 which is 314 times more than they gave to renewable energies.
You may think that when we have a government preaching action on climate change its madness to be subsidising fossil fuels in this way. And you would be right. If the UK Government stopped giving export credits for fossil fuels, it would become less feasible to continue extracting and burning them, helping reduce carbon emissions and leading to more investments into clean renewable energy.
Last week the rich countries of the OECD met to decide if they should end export credit support to coal – the dirtiest fossil fuel and a good place to start chipping away at the fossil fuels industry.
This was good timing, you know, what with a global climate change summit taking place in Paris in December and rich countries needing to show leadership. But sadly, they hummed and hawed and dragged their feet and decided they would postpone a decision.
This outcome is better than a total collapse of negotiations or a feeble outcome that makes no difference, but it’s hardly the kind of approach that we want to be seeing from leading nations two months out from Paris.
Time for Leadership
Christian Aid has decided that it’s now time for the UK Government to outpace the sluggish OECD countries and decide for itself that it won’t be propping up the coal industry in this way. More than a thousand Christian Aid supporters wrote to Business Secretary Sajid Javid on the subject. If he were to consent to this, not only would he give a clear signal that the UK is serious about tackling climate change, but he’d be in good company. US President Barrack Obama has already agreed to end this support and France followed suit last week.
If climate change is to be addressed we need to shift the global financial flows that are keeping the fossil fuel industry as the top dog. That’s what Christian Aid’s Big Shift campaign is all about. Coal is already beginning to lose the fight and become unsustainable, not just ecologically but also financially.
Peabody Energy, the largest privately owned coal company in the world is getting so desperate it’s now trying to make out coal is a magic bullet for ending world poverty. It’s a bullet alright but not a magic one.
Not only does coal cause climate change it also doesn’t help African energy poverty. Africa’s rural poor live in places too remote to be hooked up to energy grids powered by carbon belching coal burning power stations. Much better is locally run solar and wind power which would allow Africa to leapfrog fossil fuels just like it leapfrogged landline telephone pylons and went straight to mobile phones.
Coal has had its day and needs to be left in the past. The longer the UK Government keeps coal a part of the present we won’t be doing what we can to secure a safe and clean future.
Joe Ware is Church & Campaigns Journalist at Christian Aid. He is on twitter at @wareisjoe