Debunking the myths of OECD exports credits for coal
In September 2014, the high profile Global Commission on the Economy and Climate co-chaired by Lord Nicholas Stern and the former president of Mexico, Felipe Calderón, released its flagship New Climate Economy report - the ‘Stern 2 Report’.
The report says “Given the known risks associated with coal, it is time to reverse the “burden of proof”, so coal is no longer assumed to be an economically sound choice by default. Instead, governments should require that new coal construction be preceded by a full assessment showing that other options are infeasible, and the benefits of coal outweigh the full costs”.
This should apply for governments hosting coal-fired power plants, but also for governments backing coal plant exports – through their Export Credit Agency. The OECD Export Credit Group (ECG) has officially started in 2013-2014 to discuss how to foster climate mitigation through Export Credit Agencies (ECAs) acting on behalf of their government. This primarily concerns the controversial support for coal technology exports.
In the last semester or so WWF met many stakeholders on this issue and heard several statements that were factually incorrect or wrong, and often based on outdated information in a global energy market that is transforming itself very quickly.
Discussing the issue of limiting export credits for coal in a sound and effective way requires solid factual evidence, and understanding of recent transformational changes in energy systems and climate policies.
This briefing is intended to debunk some myths by providing latest evidence. It is building on the WWF report Global Coal: the market has shifted.