The Carbon Principles adopted by major banks two years ago to reduce financing opportuities for coal-fired power plants in the U.S. are not working, according to a new report by the Rainforest Action Network (RAN).
The report examines the implementation and impact of these Principles, and the role that banks play in financing new coal plants.
"Our research reveals that, while the broader economy has been shifting away from new coal power plants, the banks that have signed onto the Carbon Principles are continuing with business as usual in regards to financing dirty coal," RAN said in a post on its website.
Coal-fired power plants provide nearly 50% of our electricity and, pound for pound, are the planet's dirtiest source of energy. Burning coal is the nation's top source of air pollution and toxic mercury, and it is responsible for one third of the country's greenhouse gas emissions--nearly 2 billion tons per year.
Key Findings From the Report:
- There is no evidence that the Carbon Principles have stopped, or even slowed, financing to carbon-intensive projects.
- There is no evidence the Carbon Principles have spurred investment in clean energy at greater levels than what is already happening across the economy.
- The Carbon Principles acknowledge that precautionary policies can be enacted by banks, and can be applied across the board to all types of client services.
- The Carbon Principles affirm the principal of active engagement with outside environmental NGO stakeholders in developing due diligence procedures.
- The Carbon Principles address the economic risk of financing climate change, rather than the environmental risk of providing this finance.
RAN called upon leading financial institutions to develop a robust framework of policies and practices to address climate risk, including the immediate phase-out support for new and existing coal-fired power plants, coal extraction and delivery projects.
The report, "The Principle Matter: Banks, Climate & The Carbon Principles", is available at the link below (PDF).
