The Center for American Progress’ recommendation for a key Export-Import Bank provision that would promote clean energy paid off recently with the inclusion of a provision in the State and Foreign Operations section of the appropriations omnibus bill passed through Congress just before the winter recess.
The bill recommends that the Export-Import Bank provide 10 percent of its financing capacity to promote the export of clean energy products and services. This provision is an intelligent, forward-looking policy that will increase American competitiveness in the rapidly growing global clean energy market and provide enormous environmental benefits at the same time.
Having supported more than $400 billion dollars of U.S. exports during the past 70 years, the Export-Import Bank is one of the most powerful tools at the U.S. government’s disposal for spurring innovation and economic growth. In the 1990s, a similar provision encouraged Ex-Im to do more work with small businesses, which at the time were receiving very little support. Today, more than a quarter of Ex-Im’s total authorizations are dedicated to small businesses, easily exceeding the original targets.
A similar process can and will occur with clean energy. Former Chief World Bank Economist Nicolas Stern has argued that the world’s growing energy demands could create a $500 billion annual market for clean energy by 2050, and the United States should act today to ensure that U.S. businesses are poised to seize this growing opportunity. Yet the Ex-Im Bank continues to provide vast support for traditional fossil fuel projects while neglecting to develop our clean energy business sector.
In fiscal year 2006, Ex-Im promoted $1.8 billion in traditional fossil fuel exports but only $9.8 million in renewable energy exports. This new provision is an important first step toward shifting this ratio in favor of the industry that has the greater growth potential: clean energy.
We at the Center for American Progress have been strong supporters of this policy because it is good for U.S. businesses and good for the environment. In the years to come, we will need many such “win-win” ideas, some of which we document in our new report, “Capturing the Energy Opportunity: Creating a Low-Carbon Economy,” which is part of Progressive Growth, CAP’s economic plan for the next administration.