OPIC to slash portfolio emissions 50%

London, 7 January: The US has introduced legislation requiring the Overseas Private Investment Corporation (OPIC) to slash greenhouse gas (GHG) emissions from the projects it invests in by 50% over the next 15 years. OPIC provides support to US companies exporting goods and services to new and emerging markets.

As 2009 drew to a close, US President Barack Obama signed into law bill HR 3288, which requires the agency to cut emissions from its portfolio by 30% in the next 10 years from June 2008 levels, and 50% in 15 years, as part of “a revised climate change mitigation plan”.

This is a tightening of OPIC’s target announced in 2007, to cap and reduce its portfolio emissions by 20% in 10 years, or from 54.7 million tonnes of carbon dioxide equivalent (Mt CO2e) to 44Mt in 2016. It also includes for the first time emissions from financial sub-projects, understood to make up a significant portion of OPIC’s portfolio.

The 2007 commitment was criticised by environmentalists as lacking in ambition.

However, Doug Norlen, Washington, DC-based policy director for environmental NGO Pacific Environment, welcomed the passage of HR 3288 as a step towards phasing out subsidies for fossil fuel. He added: “While we needed more commitments from world leaders in Copenhagen, this law will at least require the US to increase efforts to reduce GHG emissions.”

The legislation also requires OPIC to issue within nine months a “comprehensive set of environmental, transparency and internationally recognised worker rights and human rights guidelines” to be applied to all the projects, funds and sub-projects it supports. The legislation stipulates the updated environmental and social guidelines must be at least as strong as the agency’s publically announced policies and the World Bank’s policies, often used as a benchmark in the financial community.

Under the bill, OPIC will also issue a report on its plans for a “substantial commitment to invest in renewable and other clean energy technologies and plans to significantly reduce GHG emissions from its portfolio”.

OPIC did not return requests for comment before press time.