us-uk-nl ecg work plan on carbon emissions 4june14

5/24/2018 US-UK-NL ECG Work Plan on Carbon Emissions 4June14

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June 4, 2014

ECG Work Plan on Carbon Emissions

United States, United Kingdom, and the Netherlands

In recent years, the topic of climate change increasingly has influenced the discussions within the

Working Party on Export Credits and Credit Guarantees (ECG) and among the Participants. Forexample, we have revised the Climate Change Sector Understanding (CCSU) to include special

conditions for climate change mitigation projects and are considering inclusion of climate

adaptation projects as well. The recent OECD Ministerial Statement on Climate Changerecognized work by the OECD in the field of climate change, and called for continued

discussions on how export credits could contribute to climate change solutions. It is therefore

time to consider in an integrated manner the role of export credits in promoting our shared

objective of tackling climate change. To this end, we propose that the session on climate changeat the June 2014 meeting be a combined Participants/ECG session, as the climate issue touches

both the Arrangement as well as other ECG instruments.

With reference to the U.S./UK proposal on ECA support for high carbon intensity power plants(March 2014), the work plan described below proposes a series of steps that the United States,

United Kingdom, and the Netherlands believe would facilitate the ECGs consideration of a

carbon emissions performance standard (EPS) for ECA financing of new power plants. Theobjective of this plan is not to pre-judge any outcomes or to limit discussion on additional areas

of work or related issues. Rather, it is to facilitate the consideration of an issue that we believe

can advance our shared interest in using export credit policy to combat climate change.

We hope that other ECG members participate actively in these discussions, and would welcome

discussion papers, proposals, and/or presentations in advance of each of the sessions outlined

below. Where the ECG agrees in principle to particular elements, we note it could request that

the Practitioners conduct technical analyses of specific issues that would inform the discussionsand support the implementation of an EPS. The Practitioners would report back to the ECG at

subsequent sessions and the ECG would decide on how to proceed based on the technical

information developed.

Work Plan

June 2014:Policy options to address climate change. From an export credit policy perspective,these policy options fall into two major groups:

(1)incentives for projects that contribute significantly to climate change mitigation, includingrenewable energy, energy efficiency, greenhouse gas emissions reduction, and adaptation;

and

(2)conditions imposed on support for those projects that most significantly increase the risk ofclimate change, notably in the energy sector.

We propose a fulsome discussion of a carbon EPS in the context of broader efforts to use export

credit policy to combat climate change, including of how incentives and conditions couldreinforce each other, that would enhance understanding of each others positions, and hopefully

clarify the need to pursue both types of options simultaneously.


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This session would include a detailed discussion of the substance of the March 2014 U.S./UK

proposal on ECA support for high carbon intensity power plants, though we would not seek to

limit the discussion or future work only to this proposal, particularly if other proposals arebrought to the table that contribute to our shared goal of combating climate change.

We also suggest an interim meeting in September 2014 to begin work on the substance of the

work plan, to provide a foundation for more detailed work to be undertaken at subsequentmeetings.

November 2014:Scope and form of conditions for support. This session would focus on the

broad shape of conditions for official export credit support for high carbon intensity powerplants, including:

How to define the scope of projects to which conditions should apply On what factors conditions should be based (e.g., level of carbon emissions, plant carbon

intensity level, efficiency of power production, other)

At a conceptual level, what types of power plants and carbon emission or carbon intensitylevels should be subject to conditions, including requirements for carbon reducing

measures? (Recognizing that precise thresholds will require further technical work.)

We would invite outside experts to this or subsequent meetings.

March 2015:Exceptions and mitigation. This session would focus on the circumstances in

which the conditions for providing export credit support for high carbon intensity power plants

would be met. Key questions could include:

In which markets or circumstances would conditions on export credit support for highcarbon intensity power plants not apply (e.g., the poorest countries, cases where

mitigation technologies are used to reduce emissions to a specified level)?

What would be the environmental effect of such exceptions? What would be the economic effect of such exceptions on the host (buyers) country? What processes or technologies can be employed to mitigate environmentally harmful

effects, and therefore qualify projects for export credit support (e.g., carbon capture and

storage, hybrid generation, etc.)?

Spring 2015:Possible Practitioner Work on Thresholds and Conditions. The ECG could agreeto a mandate for Practitioners to, working with experts from international institutions, develop

recommendations or provide additional information on technical issues that would inform ECG

work on an EPS, including:

Draft benchmarks or carbon intensity standards Specification of thresholds to qualify for official support; and/or Draft conditions under which plants would be exempt from meeting emission intensity

levels.

June 2015: Targeted completion of work. Upon receipt of technical recommendations fromPractitioners, the ECG could take the final steps towards implementing a new discipline by:

Determining where the EPS conditions should be specified (e.g., as an additionalprovision/supplemental annex to the Common Approaches); and

Drafting precise language and approving those conditions.


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us-uk-nl ecg work plan on carbon emissions 4june14

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