At a time when global warming and greenhouse gas emissions are engaging the attention of the international community, two leading banks, Citi group and Bank of America are into financing coal-based power plants.
Right now, there are about 150 new coal-fired power plants on the drawing board. The amount of polluting emissions they will release is staggering -- between 600 million and 1.1 billion tons of CO2 emissions every year, for the next 50 years. And this, according to Rainforest Action Network (RAN), will basically negate every other effort currently being considered to fight climate change.
AdvertisementStill the two banks are funding such ventures. It is tantamount funding climate change itself, charges the RAN.
If the 150 power plants get built, there is no use talking about compact fluorescent light bulbs or mass transit or any of those other things ... we'll have no hope of averting climate change short of catastrophic proportions, warns author Bill Mckibben.
And what's the quickest way to halt those plants? Follow the money.
Without funding from banks, companies don't have the resources to front the $140 billion necessary to construct all those new dirty power plants. Rainforest Action Network learned that the money trail is not so complicated; it leads to two main banks -- Citi and Bank of America.
• Citi currently holds the title as the world's largest bank and biggest company. A few years ago, they also were leading the way in addressing environmental and human rights concerns in their industry. As RAN details in their new report "Banks, Climate Change and the New Coal Rush": In May 2007, Citi pledged to "direct $50 billion over the next 10 years to address global climate change through investments ..." Financing for renewable energy, energy efficiency and improvements in energy infrastructure amount to $31 billion spread across 10 years. While this may seem like a significant commitment, it amounts to less than 0.2 percent of the company's $2.2 trillion in assets. What is Citi doing with the other 99.8 percent? The answer to that question is that Citi has been busy funding dirty energy. Last year they gave 200 times more money for dirty energy than for clean. In the process they've helped underwrite some of the world's worst environmental and human rights offenders.
To cite some gross instances -
• They've given billions of dollars to Massey Energy, Arch Coal, Alpha Natural Resources, and other coal companies that practice mountaintop removal (MTR) coal mining that involves blowing the tops off of Appalachian mountains, filling valleys, burying streams, poisoning waterways and impoverishing communities.
• Citi helps finance American Electric Power (to the tune of $12 billion), which is working to maintain its designation as the single biggest GHG polluter in the country by building five new dirty coal plants, adding another 21 million tons of CO2 to their annual emissions of 163 million tons.
• Citi is also the top underwriter of scandal-tainted Dynegy (involved in the Enron debacle and price manipulations in California) that is leading the industries' coal rush and plans to build eight new plants, increasing their CO2 emissions by 200 percent.
Bank of America is not far behind Citi. It has also pledged to become an environmentally sustainable business, but it doesn't seem to walk its talk. Last year it spent 100 times more on dirty than clean energy, and it gives less than 0.2 percent to helping fight climate change.
Like Citi, BOA is making friends with some of the world's worst companies.
• They've given big money to companies that are devastating Appalachia with MTR mining. Arch Coal got $700 million and long-repudiated Massey Energy scored $175 million.
• The disastrous Peabody Energy got $4 billion last year from BOA, which should help them on their way to building new plants in New Mexico, Illinois and Kentucky.
• Alpha Natural Resources also got $525 million to help its 27 surfaces mines in Appalachia.
Each year, the American Lung Association reports, an estimated 24,000 people in the United States die prematurely from pollution emitted by coal-fired power plants. And it is not just the burning of coal that is dangerous -- extraction, especially practices like MTR coal mining that blow the tops off mountains, are devastating to the land and the people.
"The banks are funding this war on Appalachia, and they are funding domestic terrorism," said Judy Bonds, a 10th generation mountaineer in West Virginia who is the founder of Coal River Mountain Watch and the winner of the Goldman Environmental Prize.
"We are being bombed every day by three and a half million pounds of explosives. We can smell and taste explosives. They damage our homes, shake our nerves and poison our air," she said. "The banks are helping coal to take the wealth from us, to steal us blind and leave us in poverty, and leave us in poison." Despite the overwhelming environmental and humanitarian concerns, even from an investment standpoint, putting your chips on coal is a sure loss.
In the last few years, a political upswing has occurred in the fight against climate change. Al Gore's film and the success of grassroots movements like Step It Up, which organized 1,400 rallies in all 50 states, has garnered momentum.
Other countries have already begun regulating carbon, and the United States will follow suit. Currently there are a handful of bills in Congress to cap emissions and establish a carbon-trading program in the United States, making polluters pay.
"Coal looks cheap at the moment because we charge it nothing for its environmental damage," said Bill McKibben. "But when we do, you need to be a real sucker for wanting anything to do with new coal."
Coal, he added, "is about to become as expensive fiscally as it is environmentally."
If those banks took the $141 billion they plan to spend on building new coal plants, and instead invested it in energy efficient measures, they could reduce electricity demand by 19 percent by 2025.
"By 2020, the U.S. could meet 20 percent of its electricity needs from renewable sources. This would avert the need for 975 new power plants, allow for the closing of 180 old coal plants and 14 existing nuclear plants, and save consumers $440 billion.
"By transitioning to a clean energy future that prioritizes energy efficiency -- and clean renewable sources like solar and wind power -- we can meet our future energy needs, build a stronger economy, keep our communities healthy and curb climate change," RAN's report advises. "Tell Citi and Bank of America to stop funding dirty coal projects and to redirect their resources and investments toward clean energy. Don't let your money be used to fund climate change."