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Japan To Step Up Funding Coal Power Plants In Developing World

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Mari Iwata, The Wall Street Journal

Japan said Wednesday it would step up support for coal-fired power plants in developing nations, challenging a U.S. policy that seeks to discourage such plants in an effort to fight global warming.

“Without public loans and insurance from rich countries, emerging countries would turn to less costly, inefficient technologies. It could aggravate the CO2 emission issue,” said Takafumi Kakudo, coal director at the Ministry of Economy, Trade and Industry. He spoke at a meeting where a government panel of energy experts approved a new policy that promotes coal.

The move represents a repudiation of the Obama administration’s strict stance of carbon emissions. Washington is talking to members of the Organization for Economic Cooperation and Development, a club of developed nations, about a rule that would ban national export-credit agencies from financing new overseas coal power plants.

Denmark, Finland, Iceland, Norway, and Sweden joined the U.S. in the autumn of 2013. They said at the time that they would be “promoting energy efficiency and clean energy, including renewables,” while ending public financing for new coal-fired power plants overseas because of the risk of climate change.

In the policy adopted Wednesday, Japan contended that developing nations would have to use coal whether others liked it or not. “Encouraging the adoption of the most efficient coal technology as possible is a realistic way to cut CO2,” said the policy statement.

On July 17, the government-owned Japan Bank for International Cooperation announced a $202 million credit line for Vietnam Electricity to purchase Japanese equipment for a coal-fired power plant. The credit line will be insured by state-backed Nippon Export and Investment Insurance.

Under Prime Minister Shinzo Abe’s growth strategy, Tokyo seeks each year to back overseas coal power-plant projects worth about $4 billion. Typically those projects have Japanese investors and use at least some Japanese equipment.

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