Under a settlement agreement in a lawsuit brought by Greenpeace and Friends of Earth, the U.S. Export-Import Bank and the Overseas Private Investment Corp. have agreed to ask for environmental statements from countries seeking US financial aid to set up projects. Both the financing groups have also agreed to invest $250 million each in renewable energy and ensure that the projects they have invested in reduce carbon emissions by 20 percent.

Greenpeace and Friends of Earth, along with three cities from California and one from Colorado, filed the lawsuit against the financing groups in 2002 arguing that the projects they help fund could affect earth’s climate which, in turn, could effect the sea levels around America’s coasts. From 1995 to 2006, the Ex-Im Bank and OPIC provided more than $21 billion in financial aids to countries around the world for projects like oil & gas pipelines, electric power plants and oil refineries.

It is astonishing to know that these groups never asked for environmental statements from the companies managing the projects, even the international investments agencies like the World Bank and Asian Development Bank ask for environmental statements. The credit for the delay in this procedural change is partially shared by the Bush administration.

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Environmental groups and food producers oppose the Renewable Fuels Association’s requests for support from the stimulus package that includes $1 billion to finance current operations and a $50 billion federal loan guarantee, as well as job tax credits.

The Clean Air Task Force, Environmental Working Group, Friends of Earth, and the Network for New Energy Choices released a statement today saying that federal government subsidies and mandates for corn-based ethanol produce potentially catastrophic consequences to the environment, and have no payback to taxpayers in terms of alleviating global warming effects, providing for energy security, or even simply reducing the cost of driving. The group’s stance:

“With evidence mounting that biofuels are worsening global warming and harming water quality and wildlife habitat, it makes no sense for the federal government to lavish billions more on an industry already flush with government assistance. It is time for ethanol to stand on its own.”

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