Top coal financiers: Japan, China, Korea

Divestment is becoming both a buzzword and a movement that urges organizations to shift support from dirty fossil fuels to clean and renewable energy. But it is a long way to go when governments are being lobbied by big industries and financial institutions and continue to work in secretive partnership. Re-blogging this post:

Miners shovel coal at a mine in China's Hebei province. Pic: AP.

Japan, China, and South Korea are the top financiers of coal exports via international financial conduits, a new report has revealed.

International environmental groups have called for these countries to stop financing coal exports via Export Credit Agencies and asked all other countries involved in climate talks to honor their commitments to combat global warming by reducing carbon emissions.

The Natural Resources Defense Council, Oil Change International and World Wide Fund for Nature released the report, Under the Rug: How Governments and International Institutions are Hiding Billions in Support to the Coal Industry, exposing the secretive operation between governments and financial institutions to finance big polluters despite international outcry for urgent climate action.

The report said “total greenhouse gas (GHG) emissions related to international public finance for coal between 2007 and 2014 conservatively amounted to almost half a billion tons of carbon dioxide equivalent (CO2e) per year. Emissions are close to a total of 18 gigatonnes for the entire lifetime of the supported power plants alone.”

The report revealed US$73 billion or over $9 billion a year within that period in which public finance was approved for coal.  Japan gave the largest amount of coal financing of any country, with over $20 billion during that time, followed by China with finance close to US$15 billion.

OCIKorea, Germany, and Australia are among top sources of funds transmitted via financial agencies. These countries are also reported to be leading the opposition to limits on coal finance in international discussions, along with other countries which continue to resist pressure to end public financing.

The report comes a summit in Paris in December this year to ratify a commitment to cap carbon emissions and to solidify targets of limiting global temperature below two degrees Celsius.

The report recommends improved transparency to avoid catastrophic climate change. It calls for phasing out international public finance for all fossil fuel projects, including exploration for more fossil fuels.

The report also urges the immediate disclosure of exhaustive data on public finance for the entire energy sector. Funding has largely gone unnoticed as it is often hidden from view as many countries are choosing to sweep this under the rug, rather than face the necessary task of cleaning up their own houses, the report added.

OCI-2World governments, particularly G20 and G7 members, have recognized the threat of climate change over the last eight years, and made repeated commitments to both fight climate change and end fossil fuel subsidies.

However, billions of dollars’ worth of government support continues to flow towards fossil fuels and coal. “This government financing for coal – largely in the form of export support, but also as development aid and general finance – is perpetuating coal use and exacerbating climate change. It needs to stop, immediately”, the report added.

The Intergovernmental Panel on Climate Change (IPCC) said that at least 75 percent of existing fossil fuel reserves must stay in the ground to avert global warming of more than two degrees. As coal makes up two-thirds of the carbon content of known global fossil fuel reserves, coal poses a serious threat to the climate.

Full Report HERE.

WWF calls EU for  climate leadership in OECD talks before COP Paris 

In Brussels, Belgium, 34 OECD countries convened for their annual Ministerial Meeting, June 3-4, while  G7 Heads of States and governments will meet in Germany on June 7-8 as a key political opportunity to make their climate credibility by ending support for coal.

“Many developed country governments that push for ambitious climate action are simultaneously funding coal abroad. They cannot do both and be credible,” said WWF’s Global Climate and Energy initiative leader Samantha Smith. “It is time for rich nations to put their money behind the solutions, like renewable energy, rather than using taxpayers’ money to fuel climate change.”

WWF said international public finance for coal between 2007 and 2014 is blamed for Italy’s pollution, the country which ranked 20th in the highest amount of carbon emissions globally,  “causing total greenhouse gas emissions amounting to almost half a billion tons of carbon dioxide equivalent per year.”

Contradicting the claim that export finance for coal is necessary to fight energy poverty in poor countries, the report clearly shows that zero export finance for coal has gone to Low Income Countries, where the need for energy access is greatest, while one-fourth went to High Income Countries with no every poverty concerns.

OCI-3

Sébastien Godinot, economist at WWF European Policy Office said the EU, led by the European Commission, failed to agree an official position on coal export finance ahead of the OECD meeting taking place next week. He said EU Member States are still divided, with some willing to end support for coal plants and others being more reluctant. So far the EU has largely been inaudible in the OECD negotiations, he added.

“COP Paris is around the corner.  It is time for European countries, the Commission and the EU as a whole to end procrastination and show leadership”, said Godinot, as “climate commitments and engagement to phase out fossil fuel subsidies should immediately lead the EU to ask the OECD to end export credits for coal.”

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Pacific Ocean floor, the new mining ‘frontier’

Environmental defenders are waging another war in the Pacific– this time, against deep sea mining. As land-based resources continue to deplete amid growing demand for natural resources, private companies are relentless in their quest for minerals beyond the frontier.

Nautilus Minerals Inc. (Nautilus), with corporate office in Toronto Canada and project office in Brisbane, Australia, got a green light to drill the ocean floor in the territorial waters of Papua New Guinea to extract polymetallic seafloor sulphide deposits.

The company has also plans to extend its tenement holdings in the exclusive economic zones and territorial waters of Fiji, Tonga, the Solomon Islands, Vanuatu and New Zealand as well as other areas outside the Western Pacific.

A pioneering project, Nautilus went through rigorous negotiations with the PNG government, including settlement of  commercial dispute for equity participation. The company applied for Mining Lease (ML), along with the submission of development proposal, in 2008 and was granted in 2011. The Environmental Permit was also given in 2009 by the PNG’s Department of Environment and Conservation. The lease term covers 25 years until 2035 to exploit the seabed for the prospect of copper, gold and silver.

Nautilus deploys heavy machinery equipment to extract vast mineral deposits on the sea floor. (Photo: Nautilus)

Under the agreement, the State of PNG takes an initial 15 percent interest in the project with an option to take up to a further 15 percent interest within 12 months of the Agreement. PNG paid Nautilus a non-refundable deposit for its initial 15 percent interest of US$7,000,000.

Support from resource industry

The mining industry admits the challenges in the world market and thus supports this development. In Sydney, 13th Papua New Guinea Mining and Petroleum Investment Conference is being held for three days, Dec.1-3, to discuss prospects of mining.

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The theme, “PNG Resources – Expanding Horizons”, articulates the optimism of the PNG oil and gas sector which has been facing challenging times in the world market.  Commodity prices are falling amid rising costs and falling productivity.

The conference highlights how the mining industry can address the changing conditions and significant progress which is being made in responding to the new environment.

Solwara 1 offers a bright prospect. “Development is well under way on the Solwara 1 deep sea mining project and several of PNG’s world class mineral prospects have made further substantial progress,” its conference website reads.

The conference also offers a wide range of prestigious sponsorship opportunities and the large trade exhibition which presents an exclusive opportunity to showcase the company to a very large audience.

Protest in Sydney

On Tuesday noon this week, human rights and environmental activists staged a PNG mining and pollution divestment protest on George Street in Sydney juxtaposing the conference being held at the Hilton Hotel. They said mining has been destroying communities and the environment since 1972.

Dan Jones, Melanesian Studies advocate said, “From Bougainville to Ok Tedi, to Porgera and Ramu Nickel in Madang, the extractive industry continues to cut corners purely to maximise profits causing massive environmental damage and social upheaval which continues to spark social uprising, ecocide and serious conflicts.”

"The Great Commission" arrives in PNG, an image being used by Nautilus in its deep sea mining gallery.

Nautilus is one of the speakers at the conference and organizers want the message to get across.

Natalie Lowrey, acting coordinator for Deep Sea Mining campaign said, “The Nautilus Environmental Impact Assessment is deeply flawed, neither the Precautionary Principle or Free Prior and Informed Consent has been adhered to despite growing opposition in PNG. This only further disenfranchises communities in PNG who have not yet made an informed decision on whether they want to be the guinea pigs of such a new industry.”

PNG locals are gathered to brief them of what is to  happen in their community. (Photo: Nautilus)

Protesters also decry Bank of South Pacific which provided Nautilus funding for Solwara 1. The bank is a sponsor and presenter at the conference. BSP is  criticised for allowing the project to progress after it stalled.

BSP, who considers itself the ‘greenest’ bank in the Pacific provided a loan of $120 million (2 percent of BSP’s total assets) to PNG for a 15 percent stake. Those finances are due to be released to Nautilus from an escrow account on Dec. 11.

The Deep Sea Mining campaign sent a joint letter with PNG-based NGO Bismarck Ramu Group to BSP asking if they have undertaken a full risk analysis on its loan to the PNG government that is allowing this project to advance. However, the groups had not received an answer.

Jones explained that most Papua New Guineans do  not see any benefit of mining, coal, and gas explorations to the community. They only see exploitation of their land and damage being done to their spiritual connection to land and sea. Jonas said culturally diverse subsistence agricultural communities rely on clean environments and waterways for survival. He added:

“Papua New Guineans want support for their own initiatives, like value adding to existing cocoa and coconut industries. There is an increasing demand for organic health food export markets utilising fair-trade virgin coconut and cocoa in recent years is an industry PNG is failing to tap into.”

“Development to Papua New Guineans is much more than an expedient cash cow benefiting foreign investors and local officials. Real development includes cultural development including environmentally custodial customs, responsibilities and spiritual connections to land and sea.”

Meanwhile, Mining Australia admitted that while deep sea mining generates enormous profits, the risks associated with it cannot be ignored. Potential consequences may include pollution, accidental spillage which may release toxic substance into the surrounding area, and a fear that could damage uncharted area of the sea — just to name a few.

News blog link: The Green Journal at Asian Correspondent