Climate Advocates Blast Missed Opportunity in Ex-Im Bank Renewal

November 14, 2019

House Democrats are readying to sign off on big-ticket trade legislation that climate hawks say squanders a key opportunity to pare down international greenhouse-gas emissions.

And it’s not the U.S.-Mexico-Canada Agreement.

The lower chamber is set to narrowly pass legislation Friday to reauthorize the beleaguered Export-Import Bank, a federal agency that steps in to finance U.S. goods and services exports when private banks refuse loans and other financing tools.

Supporters, including major industry associations like the Chamber of Commerce and the National Association of Manufacturers, argue that the bank has boosted the American economy to the tune of nearly 2 million jobs over the past decade.

But environmental groups and climate advocates on Capitol Hill point to the range of fossil-fuel projects the bank supports globally. Just over a month ago, the Export-Import Bank approved a $5 billion loan to prop up a natural-gas project in Mozambique.

“You either have a climate crisis or you don’t,” Rep. Jared Huffman told National Journal. “If you’re serious about all of this lip service we pay to the climate crisis, at a minimum, we ought to stop digging the hole deeper by getting the world hooked on fossil fuels, even if it’s American fossil fuel.”

The legislation would stand up an Office of Financing for Renewable Energy, Energy Efficiency and Energy Storage Exports. That office would be tasked with ensuring that 5 percent of bank financing goes to those projects. A 2015 reauthorization of the bank included language to prohibit project denials based on energy source.

And the legislation instructs the Export-Import Bank to push the Organization for Economic Co-operation and Development, a coalition of most of the globe’s largest economies, to report fully on carbon-dioxide emissions.

Still, climate hawks say the road to House-reauthorization passage has been littered with missteps. The Rules Committee this week declined to allow a floor vote on a Huffman amendment to prohibit projects that emit a certain amount of greenhouse gases.

Democrats and Republicans teamed up to roundly defeat that amendment, along with another measure to require that projects comply with cornerstone U.S. environmental laws, in committee at the end of October. Some Democrats say aggressive climate policy doesn’t belong in the Export-Import Bank debate.

“I just think they’re two separate issues,” Rep. Sylvia Garcia, who represents a district in fossil-fuel hub Houston, said. “We depend on those jobs. There’s a lot of businesses that utilize the bank, so it would hurt me and it would hurt Texas.”

The bank is hurtling towards a lapse in a week after lawmakers paired up a stopgap reauthorization with the September continuing resolution. But the House bill is partisan. Financial Services Chairwoman Maxine Waters failed to amass Democratic support for a bipartisan bill over the summer.

Now, some experts and lawmakers expect a reform-less reauthorization in the coming months. And that will mean Democrats will fail to deliver on even modest environmental reforms that Republicans agreed to in the earlier bipartisan House bill.

“This bill will not become law. I think we’ll have a clean extension in the appropriations bill or the [continuing resolution]. I think this is all show,” Rep. Patrick McHenry, the top Republican on the Financial Services Committee, told National Journal. “We have a partisan exercise on what is bipartisan policy.” The bipartisan legislation would also create the clean-energy office and push the 5 percent target.

In the coming days, lawmakers are poised to pass another month-long stopgap that includes federal funding and short-term Ex-Im authorization.

McHenry’s bleak outlook for the House legislation got some backing from other key Republicans on Thursday. Senate Majority Leader Mitch McConnell told Politico that the Senate wouldn’t take up the House legislation. And specifically mentioning the climate language in the legislation, the White House Office of Management and Budget advised President Trump to veto the bill.

“The Administration has always supported using all energy sources and technologies as cleanly and efficiently as possible,” the statement said. “The Administration supports an energy source and technology-neutral approach to financing that discourages the consideration of non-market criteria in the financing process.”

Conservative think tanks and many Republicans have long opposed the bank, arguing it violates basic free-market principles. That opposition led to the bank’s lapse in 2015. And despite the reauthorization later that year, the Republican Senate left the bank without a quorum for nearly four years until May. A quorum is needed to approve projects more than $10 million in value.

Those opponents, however, face off against a set of business and national security juggernauts in Washington. The National Association of Manufacturers put its weight behind the Waters legislation Thursday.

“More than 100 foreign export credit agencies around the world are actively helping their manufacturers win sales and jobs. Failing to reauthorize the bank is akin to unilateral disarmament,” President Jay Timmons said in a letter to House members.

McConnell could choose to pass a clean authorization in the near future or give floor time to a bipartisan bill sponsored by Sens. Kevin Cramer and Kyrsten Sinema, at which point the two chambers could theoretically negotiate a compromise.

The top Democrat on the Senate Banking Committee appears content with authorization that doesn’t reform the bank’s charter. “Democrats want to do a long, clean reauthorization. We’re still trying,” Sen. Sherrod Brown said. “The fact is Republicans have been the ones that have blocked this all along, every single time.”

But Friday’s vote in the House is likely to showcase opposition from climate-minded Democrats. One of them, Huffman of California, is rejecting the argument that U.S. financing for fossil projects is justified because the projects would ultimately be financed by the Chinese or other countries.

“That’s a classic false choice,” Huffman said. “We often think about the kinds of things we choose to put our money behind. We don’t use that kind of moral defeatism in everything we do. By that reasoning, we might as well provide military weaponry to every country in the world.”


By:  Brian Dabbs
Source: National Journal