Ahead of Glasgow, Huffman and Merkley Introduce Legislation to Halt International Financial Institutions’ Investment in Fossil Fuels
Washington, D.C. – Congressman Jared Huffman (D-CA-02) and Oregon’s U.S. Senator Jeff Merkley today introduced the Sustainable International Financial Institutions Act of 2021, which would tackle the problem of international financial institutions helping to finance fossil fuel projects that are accelerating climate chaos.
The bill introduction comes as the United States is preparing to participate in a major international climate summit in Glasgow from October 31 through November 12.
“Under the leadership of President Biden, the United States rejoined the Paris Agreement earlier this year and renewed our commitment to meeting global climate targets and reducing emissions,” said Huffman. “It is clear, we must pursue bold action, both at home and through our investments abroad, to avoid the most catastrophic impacts of the climate crisis. As the United States looks to reassert global climate leadership at the upcoming United Nations Climate Change Conference in Glasgow, our government must work to assist other countries in their transition away from dirty fossil fuels and toward a clean and sustainable future. This means putting an end to American taxpayer-funded dirty infrastructure projects abroad, and instead channeling assistance toward sustainable development. This legislation will help put America back on track as a global leader in the effort to cut carbon pollution, while advancing international cooperation toward the Paris climate goals.”
“Fossil fuel investments play a key role in accelerating climate chaos, which continues to spiral further and further out of control and claim lives and livelihoods in the process,” said Merkley. “As we gather as an international community next week, it’s time for global leaders to rethink the role that international financial institutions play in financing fossil fuel projects. We should be building out the energy sources of the future, not trapping developing communities and nations with outdated and dangerous fossil fuel infrastructure.
The Sustainable International Financial Institutions Act of 2021 would prioritize the shift to clean and renewable energy sources on the international stage by ensuring that the United States uses its voice and vote in international financial institutions to divest from fossil fuel investments.
Scientists predict that the global community must make a rapid transition away from fossil fuel energy and towards a renewable energy economy in order to prevent catastrophic warming. Building new fossil fuel projects—which are often built to operate for multiple decades into the future—severely threatens the viability of the path to achieve the emissions cuts climate scientists say are necessary to save lives and jobs.
Specifically, the bill would:
- Require the United States Executive Directors at international financial institutions to use the “voice and vote” of the United States to advance the cause of reducing greenhouse gas emissions, including by seeking to channel assistance toward sustainable development; oppose any financial or technical assistance to any country or entity to create new capacity for fossil fuel activity; and support the phasing out of funding for internal combustion engines for passenger vehicles and buses by 2025 in a way that is just and sustainable.
- Direct the Secretary of the Treasury to reduce the contribution of the United States to an international financial institution in a fiscal year by the amount of any loans or extensions of financial or technical assistance provided by the institution to any country or entity to create new capacity for fossil fuel activity during that fiscal year; deposit in an escrow account the amount by which the contribution of the United States to each international financial institution is reduced in a fiscal year; and release to each international financial institution the amount in the escrow account attributable to contributions that were previously reduced at such time as the Secretary determines and certifies to Congress that the institution has ceased providing financial or technical assistance to any country or entity to create new capacity for fossil fuel activity.
- Require an annual report to Congress from the Secretary of the Treasury on the amount of financing provided by each international financial institution in a fiscal year to create new capacity for fossil fuel activity.
- Prohibit United States foreign assistance in support of any fossil fuel activity or related infrastructure project, including through the United States International Development Finance Corporation; the Export-Import Bank of the United States; the United States Trade and Development Agency; the United States Agency for International Development; or the Millennium Challenge Corporation.
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