The Export-Import Bank should reflect US values

Even as the climate crisis deepens, banks around the world continue to invest heavily in new fossil-fuel infrastructure to the tune of $1.9 trillion in the few years since the ink dried on the Paris Climate Agreement.

The Export-Import Bank of the United States has acted no differently, investing in 10 times as many fossil fuel projects compared to investments in renewable energy. 

Unlike other banks, however, the Ex-Im Bank is entirely funded by the U.S. taxpayer. Shouldn’t we therefore have a meaningful opportunity to voice our concerns about what projects the Ex-Im Bank funds? And shouldn’t those projects reflect our values?

As Congress contemplates reauthorizing the bank and making reforms to its charter, one of simplest things Congress could do is simply require the Ex-Im Bank to comply with U.S. environmental laws like every other federal agency must.

Take, for example, the Ex-Im Bank’s 2012 decision in to approve $4.8 billion in loans for the construction of two liquified natural gas facilities on Australia’s coast within the boundaries of the Great Barrier Reef World Heritage site. 

Building the LNG terminals required the largest dredging efforts in Australia’s history and caused significant destruction of mangroves and protected seagrass habitat. The devastation was projected to be so severe that the United Nations’ World Heritage Committee expressed “extreme concern” over harm to endangered wildlife and the coral reefs and requested a halt to the construction. 

The cumulative damage of two additional LNG facilities — which have massive carbon footprints — adds insult to injury to the Great Barrier Reef. Nearly half of the reef died in 2016 in one of the largest bleaching events ever.

In 2018 Australia also suffered one of its worst heat waves ever recorded, with temperatures reaching 120 degrees Fahrenheit in many parts of the country. This is the future for Australia under the world’s climate emergency.

If the Ex-Im Bank was required in 2012 to fully comply with the National Environmental Policy Act and the Endangered Species Act before the disastrous LNG projects could be approved, the bank would have been required to complete an environmental impact statement and an endangered species consultation. The Endangered Species Act protects species like sea turtles and dugongs even when they are only found in foreign nations.

The NEPA process would have allowed any American to voice their concerns and, more importantly, would have required the Ex-Im Bank to respond to those concerns in a meaningful fashion. Developers would have been required to address and mitigate any potential harms to the Great Barrier Reef and the bank would have had to consider alternative courses of action.

But because the Ex-Im Bank does not comply with NEPA, it doesn’t do any of this.

Instead, it posts a vague “assessment” of the projects’ imports, written by the project’s proponents. Any public comments the bank receives can go right in the trash since the Ex-Im Bank is not obligated to respond.

And if the Ex-Im Bank had been required to comply with the Endangered Species Act before approving the LNG facility, it would have had to consider and mitigate any harm to sea turtles, dugongs and other endangered wildlife put at risk.

Again, unfortunately, it did not. The full extent of the harm to sea turtles and dugongs will never be known, but it put them on a faster track to extinction.

If these reforms were in place in 2012, the Ex-Im Bank may have still approved the LNG facilities. But if it did, it would likely have tried to minimize and mitigate the future harms it was causing. We will never know.

What we do know is that the Ex-Im Bank continues to operate today in a bone-headed manner, stubbornly approving projects regardless of the environmental toll. 

Financing a destructive fossil fuel project may create a few more jobs in the short term, but it breeds resentment around the world against the United States. Financing these projects harms this nation’s long-term financial wellbeing and national security as we inch closer to irreversible climate chaos.

Over the years, Congress has added to the Ex-Im Bank’s charter to reflect policy concerns of the day. It’s time the bank truly was held to our values and made accountable to the American people.  

Brett Hartl is government affairs director at the Center for Biological Diversity.