Tories to end taxpayer investment in 'dirty' fossil fuels

A Conservative government would scrap the Export Credit Guarantee Department that invests in 'dirty' power stations and instead use the fund to encourage green technology

Allegra Stratton, political correspondent
guardian.co.uk, Monday 23 November 2009 10.55 GMT
A Conservative UK government would bring to an end the practice of the government underwriting investment in "dirty" fossil fuel power stations around the world through the Export Credit Guarantee Department (ECGD) and instead turn the public fund into a "pro-poor ECGD" to encourage the spread of new green technology to poor countries.
The shadow secretary of state for international development, Andrew Mitchell, will say in a speech at the Overseas Development Institute today that it is "scandalous" that "Labour ministers are using taxpayers' money to guarantee unsustainable energy projects that are contributing to global warming" and will pledge that a Tory government would "never again" support dirty fossil fuel stations. Under the plans, a Tory "trade minister" would liase between the business department and the Department for International Development.
The non-ministerial department is the UK's official export credit agency and provides guarantees, insurance and reinsurance to British businesses investing overseas.
The Conservatives have obtained figures from the Department of Business, Enterprise and Regulatory Reform showing the ECGD is providing nearly three-quarters of a billion (£714,714,505) worth of support to fossil fuel projects. They also point to a report published by the National Audit Office showing that since 2000 the ECGD has not rejected a single application for support on the grounds that it did not meet minimum environmental and social standards. A 2003 House of Commons environmental audit committee inquiry stated: "An increasingly large proportion of ECGD's overall business is supporting power generation and fossil fuel dependent energy projects, often in developing countries".
The WWF describes the ECGD as "effectively a subsidy for fossil fuels".
Today Mitchell will also propose that UK Trade Investments and the ECGD should become a champion for British companies that develop and export innovative green technologies around the world but, largely undeveloped, also rely on credit guarantees to be viable in developing countries.
This would include using UKTI and the ECGD to promote "poverty-reducing, job-creating investment" in the poorest countries. He will say: "There is real potential for using taxpayer guarantees to encourage British business to invest in the countries which need foreign direct investment the most, particularly during the current crisis which has seen global investment flows fall substantially."