Inspiring private businesses to implement better environmental standards would yeild more effective climate change

OPIC charges fees which fully covers operating costs and makes money every year. OPIC does not subsidize fossil fuel industries, let alone provide direct-cash-grants. Rather, OPIC makes loans and loan guarantees that have among the strongest environmental, health and safety standards in the development community. OPIC has the most stringent climate change mitigation policy of any development institution, with an explicit commitment to reduce the greenhouse gases in its portfolio by over 50 percent of 2008 levels by 2023.

Unlike many other institutions, OPIC does not delegate the application of its policy standards to financial intermediaries. Each and every investment that OPIC supports is rigorously reviewed regarding its potential environmental, social, labor and human rights impact. This review is ongoing even after an investment has been made, with OPIC actively monitoring investment performance and adherence to its robust standards. When I helped create the Department of State’s Office of Corporate Social Responsibility, I always took pride in knowing that our dedicated professional and technical experts were so intimately involved in vetting OPIC investments.

Solutions to climate change cannot be solved by the brute force of cash subsidies alone; there will never be enough resources to do that directly. Instead, solutions to climate change will require finding ways to engage and draw in the private sector – through programs such as OPIC – to find creative ways to finance the adoption of more climate-friendly technologies.

Jeffrey Krilla was Deputy Assistant Secretary of State for Democracy, Human Rights and Labor (2006-2009).