Washington, D.C. – Congressman Jared Huffman (D-CA-02) and U.S. Senator Jeff Merkley (D-OR) today announced they will re-introduce the Sustainable International Financial Institutions Act of 2023, which would tackle the problem of international financial institutions helping to finance fossil fuel projects that are accelerating the climate crisis.
This comes as the global community kicks off a major international climate summit (COP28) in the United Arab Emirates (UAE). Intense scrutiny and controversy have circled around this year’s conference due to the host country’s deep ties to the fossil fuel industry. Following the appointment of Sultan Al Jaber, head of the Abu Dhabi National Oil Company, as President-designate to COP28, Rep. Huffman led a letter to Special Presidential Envoy for Climate John Kerry requesting the U.S. push the UAE to withdraw Al Jaber as lead. Senator Merkley and 25 other members joined Huffman on this letter.
“This week our latest national climate assessment confirms beyond a doubt that the climate crisis is approaching catastrophic levels – and the world’s dependence on fossil fuels is to blame. The imperative of transitioning from planet-killing fossil fuels to a clean energy future could not be more clear. But that can’t happen until we start having zero tolerance for Big Oil’s denial, deflection and greenwashing – including the upcoming COP28 climate conference, hosted by the UAE petrostate and presided over by an oil company executive who will never agree to phase out fossil fuels,” said Huffman. “Instead of ceding the global climate stage to Big Oil, we need strong leadership and real climate solutions. That’s what Senator Merkley and I are proposing with our bill to end American taxpayer funding for dirty fossil infrastructure projects abroad, and redirecting those investments to sustainable development.”
“The world cannot afford new investments in fossil fuels if we want to avoid worsening the climate crisis, and ending international financial institutions’ financing of fossil gas projects is the obvious place to start,” said Senator Merkley. “Unfortunately, institutions like the U.S. International Development Finance Corporation continue to finance fossil fuel projects, which undermines U.S. leadership abroad as we head into COP28.”
On Tuesday, federal agencies released a stark warning in the Fifth National Climate Assessment that the U.S. is not on track to reduce planet-warming pollution in line with the UN-sanctioned goal to limit global warming to 1.5 degrees Celsius – the threshold at which scientists warn the planet must stay under to prevent worsening and potentially irreversible effects of climate change. The report concludes that the world must slash fossil fuel use to limit the consequences of the climate crisis – including stronger and more frequent extreme weather events, which have been inextricably linked by scientists to the warming climate.
Congressman Huffman and Senator Merkley have been leaders in divesting from fossil fuel infrastructure and accelerating the transition to clean energy at home and abroad.
- On Tuesday, they led over 60 of their colleagues in a letter to the U.S. Department of Energy (DOE) urging the agency to update how it determines if new licenses for liquified natural gas (LNG) exports to non-free, U.S. trade countries are in the public interest.
- Last year, Huffman and Merkley joined Member of the European Parliament Marie Toussaint in a trans-Atlantic effort to transition to clean energy and prevent new liquified natural gas (LNG) infrastructure.
- The lawmakers have also partnered on the Keep It in the Ground Act to stop new fossil fuel leases and put an end to nonproducing leases on public lands and waters and transition to a clean energy future.
- Rep. Huffman has called out industry players on their roles in fossil fuel expansion, including calling out 13 of the top U.S. insurers for continuing to invest in fossil fuel expansion projects despite the risks the projects pose to the country’s economic stability and furthering the climate crisis. He has also publicly urged five of the largest U.S. banks not to provide financing for oil drilling and development in the Arctic National Wildlife Refuge.
The Sustainable International Financial Institutions Act of 2023 would prioritize the shift to clean and renewable energy sources on the international stage by ensuring that the United States uses its voice and vote in international financial institutions to divest from fossil fuel investments.
Specifically, the bill would:
- Require the United States Executive Directors at international financial institutions to use the “voice and vote” of the United States to advance the cause of reducing greenhouse gas emissions, including by seeking to channel assistance toward sustainable development; oppose any financial or technical assistance to any country or entity to create new capacity for fossil fuel activity; and support the phasing out of funding for internal combustion engines for passenger vehicles and buses by 2030 in a just and sustainable way.
- Direct the Secretary of the Treasury to reduce the contribution of the United States to an international financial institution in a fiscal year by the amount of any loans or extensions of financial or technical assistance provided by the institution to any country or entity to create new capacity for fossil fuel activity during that fiscal year; deposit in an escrow account the amount by which the contribution of the United States to each international financial institution is reduced in a fiscal year; and release to each international financial institution the amount in the escrow account attributable to contributions that were previously reduced at such time as the Secretary determines and certifies to Congress that the institution has ceased providing financial or technical assistance to any country or entity to create new capacity for fossil fuel activity.
- Require an annual report to Congress from the Secretary of the Treasury on the amount of financing each international financial institution provides in a fiscal year to create new capacity for fossil fuel activity.
- Prohibit United States foreign assistance in support of any fossil fuel activity or related infrastructure project, including through the United States International Development Finance Corporation; the Export-Import Bank of the United States; the United States Trade and Development Agency; the United States Agency for International Development; or the Millennium Challenge Corporation.
The legislation is endorsed by 350.org, ActionAid USA, Amazon Watch, Bank Information Center, Center for Biological Diversity, Center for International Environmental Law, Climate Hawks Vote, Friends of the Earth, GreenFaith, Hip Hop Caucus, Natural Resources Defense Council, Oil Change International, Progressive Democrats of America, Public Citizen, Revolving Door Project, Sierra Club, Stand.earth, Texas Campaign for the Environment, The People’s Justice Council, Third Act, Union of Concerned Scientists, Women’s Earth and Climate Action Network, and Zero Hour.
It is cosponsored by Senators Bernie Sanders (I-VT) and Ed Markey (D-MA) and Representatives Eleanor Holmes Norton (D-DC), Veronica Escobar (TX-16), Mike Levin (CA-49), Raúl Grijalva (AZ-07), Earl Blumenauer (OR-03), Zoe Lofgren (CA-18), and Nanette Barragán (CA-44).
Full text of the bill can be found here.
What Supporters Are Saying
“Indigenous and community leaders across the world are literally risking their lives to stop fossil fuel projects that would endanger their local ecosystem, human rights and the global climate. Eduardo Menduá, an A’i Cofán Indigenous representative from the Ecuadorian Amazon, is the latest to be assassinated as a result of his activism. The United States’ Congress must match the courage of threatened environmental rights defenders by ending any financial and political support for the fossil fuel industry both domestically and internationally,” said Andrew Miller, Advocacy Director for Amazon Watch.
“Investments from major financial institutions are driving the climate crisis and environmental injustice worldwide. In order to tackle this crisis, we need to put a stop to business as usual and reinvest in a clean energy economy that works for all of us,” said Mahyar Sorour, Director of Beyond Fossil Fuels Policy at the Sierra Club. “We applaud Senator Merkley and Representative Huffman for their leadership in working to cut off the flow of money to dirty and destructive fossil fuels.”
“As the largest historical contributor to climate change, the U.S. should stop sending limited public funds towards subsidizing the expansion of fossil fuels. Instead, the US must immediately support clean energy solutions, helping countries around the world justly transition their energy sectors and economies, and adapt to the already unfolding climate impacts. We applaud this bill for ending U.S. support for fossil fuel financing through international financial institutions, and instead supporting sustainable development,” said Luisa Abbott Galvao, Senior International Policy Campaigner, Friends of the Earth.
“Reducing financing of fossil fuel expansion is fundamental to meeting our goals to reduce climate pollution and safeguard a livable planet for coming generations. We should not be using US taxpayer dollars to fund polluting and destructive projects in other countries. Instead, we should use the leadership of the US government in multilateral and bilateral financial institutions to invest in clean energy and climate solutions,” said Deborah Moore, Campaign Strategist, Third Act.
“The fossil fuel-driven climate emergency is already wreaking deadly havoc across the globe. Allowing banks to pour more gasoline on the fire is inexcusable. Senator Merkley’s attempt to prevent the financing of new coal, oil, and gas production marks a step in the right direction. Congress should pass it immediately. The devastating consequences of the climate crisis will only grow worse as long as policymakers refuse to rein in the profit-maximizing corporations most responsible for causing the problem and for delaying a just clean energy transition,” said Revolving Door Project senior researcher Kenny Stancil.
“International financial institutions have spent too long pouring fuel on the flames of the climate crisis. The SIFI Act provides a much needed impetus to end this deadly fossil finance. The Export-Import Bank and International Development Finance Corporation have poured more than hundreds of millions of dollars into overseas fossil fuel projects this year, threatening global climate goals and falling behind their peer institutions. It’s crucial that politicians at all levels end public support for oil, gas, and coal infrastructure, and we thank Sen. Merkley and Rep. Huffman for their bold leadership to end the fossil fuel era,” said Collin Rees, United States Program Manager at Oil Change International.