Environmental organizations today applauded Rep. Maurice Hinchey (D-NY) for introducing legislation that seeks to end subsidies for the international operations of oil companies. The “End Oil Aid” bill, introduced yesterday, calls on international financial institutions including the World Bank, Export Import Bank and Overseas Private Investment Corporation to stop financing oil and gas projects.
“Oil aid not only wastes taxpayer dollars, it supports projects that can fuel corruption and conflict in developing countries and cause irreversible social and environmental impacts on the local communities there,” said Jennifer Kalafut, Campaign Coordinator at Oil Change International.
“Every year American taxpayers commit billions to financial institutions like the World Bank, which in turn lavish subsidies on the same oil companies who are earning record profits while fueling global warming,” said David Waskow, International Program Director at Friends of the Earth U.S. “We congratulate Congressman Hinchey on taking a long overdue step to end the scandal of ‘oil aid’”
Each year U.S. agencies such as the Export-Import Bank (Ex-Im) along with international financial institutions like the World Bank provide financial support worth billions of dollars in the oil and gas industry. In 2005, Ex-Im authorized $1.5 billion in financing for projects in the oil, gas and petrochemicals sector. And according to the Bank Information Center, support for oil companies by the International Finance Corporation—the World Bank’s private sector arm—skyrocketed by 77 percent between 2005 and 2006.
Bruce Rich, International Program Director at Environmental Defense, praised Congressman Hinchey’s bill as a “path-breaking initiative to end perverse policies that, in the words of Sir Nicholas Stern, former chief World Bank economist, and head Advisor to the United Kingdom Government on the Economics of Climate Change and Development, ‘distort the market in favor of existing fossil fuel technologies’ as well as reduce the incentive to develop innovative climate friendly energy sources.”
“We must combat global warming by helping put countries around the world on a path toward a clean energy future, but oil aid does the exact opposite,” said Waskow. “Combustion of oil and gas causes more than a third of global greenhouse gas emissions, fueling a climate crisis whose impacts will be felt most severely in poor countries.”
See EndOilAid.org for more info