Citigroup, J.P Morgan Chase and Morgan Stanley impose new environmental standards for coal.

In spite of the climate change skeptics and the US reluctance to sign up to Kyoto, financial realities are finally bringing about change. Jeffrey Ball of The Wall Street Journal has reported that three of Wall Street’s biggest investment banks Citigroup Inc., J.P.Morgan Chase and Co., and Morgan Stanley have announced that they are imposing new environmental standards that will make it harder for companies to get financing to build coal-fired power plants in the U.S.

The new policy shows that these financial institutions are facing the reality that the future incoming administration will legislate to limit greenhouse gas emissions. Much has changed in last few years. Individual states are now requiring utilities to “account for potential emissions in new-plant plans.” Effectively banks are protecting themselves from the financial impost that these will have.

The banks developed the Carbon Principals over nine months in consultation with leading power companies and the environmental groups, Environmental Defense and the Natural Resources Defense Council.

The Citibank press release said it all:

“Leading utilities and financial institutions understand that the rules of the road have changed for coal,” said Mark Brownstein, managing director of business partnerships for Environmental Defense, one of the NGOs that advised with the banks in creating the Principles. “These principles are a first step in facilitating an honest assessment of electric generation options in light of the obvious and pressing need to substantially reduce national greenhouse gas pollution.”

Dale Bryk, senior attorney at the Natural Resources Defense Council added, “Expectations are rising fast for this industry. Global warming is changing the competitive landscape. Clean power is the name of the game today. Conventional coal facilities are already facing intensive scrutiny. We think the serious money is increasingly going to be on clean, efficient solutions.”

The new carbon principles that the banks have developed can be read here:

The inevitability of the need for change is becoming clearer as the US government is studying which of the Cap-and Trade systems it chooses in an effort to limit greenhouse gas emissions. As Ball says, “the banks say they don’t want to be involved with debt that goes bad as a result of government emissions caps that require the power plants they finance to buy large numbers of extra pollution allowances.” As the science emerges and populations demand it, change will inevitably overtake old polluting energies, even if only in response to market forces and financial realities.

In fact, the US has just pulled out of the FutureGen clean coal project, an obvious setback for the Australian coal industry’s plans to embrace clean-coal technology.

Soon we may be able to say, old king Coal is dead, long live the renewable energy king.

The days of conventional coal really are over!

~ by abstraktbiblos on Wednesday, 6 February, 2008.

2 Responses to “Citigroup, J.P Morgan Chase and Morgan Stanley impose new environmental standards for coal.”

  1. […] Original post by Green Icebergs – a look at the world from a different perspective […]

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