Sustainable International Financial Institutions Act of 2021
Bill: S.3106 | Sponsor: Sen. Merkley, Jeff (D-OR)
Policy area: International Affairs

Summary:
Sustainable International Financial Institutions Act of 2021
This bill directs specified international financial institutions to use the influence of the United States to advance the cause of reducing greenhouse gas emissions and transition the global economy to a clean energy economy. It also prohibits the United States from providing direct or indirect assistance to any country or entity to support any fossil fuel activity.

To require the use of the voice and vote of the United States in 
     international financial institutions to advance the cause of 
   transitioning the global economy to a clean energy economy and to 
 prohibit United States Government assistance to countries or entities 
        to support fossil fuel activity, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Sustainable International Financial 
Institutions Act of 2021''.

SEC. 2. CLEAN ENERGY AND CLIMATE JUSTICE AT INTERNATIONAL FINANCIAL 
              INSTITUTIONS.

    The International Financial Institutions Act (22 U.S.C. 262c et 
seq.) is amended by adding at the end the following:

              ``TITLE XX--CLEAN ENERGY AND CLIMATE JUSTICE

``SEC. 2001. CLEAN ENERGY AND CLIMATE JUSTICE.

    ``(a) In General.--The United States Executive Directors at the 
international financial institutions specified in subsection (c) shall 
use the voice and vote of the United States in those institutions--
            ``(1) to advance the cause of reducing greenhouse gas 
        emissions and transitioning the global economy to a clean 
        energy economy, including by seeking to channel assistance 
        toward countries and entities that are building clean and 
        sustainable energy systems;
            ``(2) to oppose any policy reform, or investment, loan, or 
        extension of financial or technical assistance to any country 
        or entity, that is intended to create, or will have the effect 
        of creating, new capacity for, or the expansion of, fossil fuel 
        activity, including--
                    ``(A) any such policy reform, investment, loan, or 
                extension of assistance that would support the 
                refurbishment or life extension of existing fossil fuel 
                capacity; or
                    ``(B) any such investment, loan, or extension of 
                assistance to a country or entity that would 
                necessitate, or is predicated upon, increased fossil 
                fuel capacity outside of the country receiving the 
                investment, loan, or extension of assistance or the 
                country in which the entity operates, as applicable, 
                without regard whether the activity falls within the 
                portfolio of the international financial institution 
                providing the investment, loan, or extension of 
                assistance; and
            ``(3) to support the phasing out of funding for internal 
        combustion engines for passenger vehicles and buses by 2025 in 
        a way that is sustainable and sensitive to communities in need 
        of mobility.
    ``(b) Reduction of Contributions; Deposit in Escrow Account.--
            ``(1) Determination of expenditure on new fossil fuel 
        capacity.--In each fiscal year, the Secretary of the Treasury 
        shall--
                    ``(A) determine the amount of investments, loans, 
                and extensions of financial or technical assistance 
                provided by each international financial institution 
                specified in subsection (c) to any country or entity to 
                create new capacity for fossil fuel activity during the 
                preceding fiscal year; and
                    ``(B) reduce the contribution of the United States 
                to that institution by the amount determined under 
                subparagraph (A).
            ``(2) Deposit in escrow account.--The Secretary shall 
        deposit in an escrow account the amount by which the 
        contribution of the United States to each international 
        financial institution specified in subsection (c) is reduced 
        under paragraph (1)(B).
            ``(3) Release from escrow account.--The Secretary shall 
        release to each international financial institution specified 
        in subsection (c) the amount in the escrow account under 
        paragraph (2) attributable to contributions to that institution 
        reduced under paragraph (1)(B) at such time as the Secretary 
        determines and certifies to Congress that the institution is no 
        longer providing investments, loans, or extensions of financial 
        or technical assistance to any country or entity to create new 
        capacity for fossil fuel activity.
            ``(4) Reports required.--Not later than 120 days after 
        depositing amounts into the escrow account under paragraph (2) 
        attributable to contributions to an international financial 
        institution specified in subsection (c) reduced under paragraph 
        (1)(B), and annually thereafter until amounts are released to 
        that institution under paragraph (3), the Secretary shall 
        submit to Congress a report that documents investments, loans, 
        and extensions of financial or technical assistance provided by 
        that institution to any country or entity to create new 
        capacity for fossil fuel activity during the preceding fiscal 
        year.
    ``(c) International Financial Institutions Specified.--The 
international financial institutions specified in this subsection are 
the following:
            ``(1) The International Bank for Reconstruction and 
        Development.
            ``(2) The International Development Association.
            ``(3) The International Finance Corporation.
            ``(4) The Multilateral Investment Guarantee Agency.
            ``(5) The African Development Fund.
            ``(6) The African Development Bank.
            ``(7) The Asian Development Fund.
            ``(8) The Asian Development Bank.
            ``(9) The European Bank for Reconstruction and Development.
            ``(10) The Inter-American Development Bank.
            ``(11) The Inter-American Development Bank Invest.
            ``(12) The North American Development Bank.
    ``(d) Definitions.--In this section:
            ``(1) Fossil fuel activity.--The term `fossil fuel 
        activity' means the exploration, development, mining or 
        production, processing, refining, transportation (including 
        pipelines transporting gas, oil, or products thereof), 
        combustion, distribution, or marketing of, or the construction 
        or operation of plants for the processing or refining of, coal, 
        petroleum, natural gas, or any derivative of coal, petroleum, 
        or natural gas that is used for fuel.
            ``(2) Fossil fuel.--
                    ``(A) In general.--The term `fossil fuel' means all 
                forms of coal, oil, and gas.
                    ``(B) Inclusions.--The term `fossil fuel' 
                includes--
                            ``(i) bitumen from oil sands;
                            ``(ii) kerogen from oil shale;
                            ``(iii) liquids manufactured from coal;
                            ``(iv) coal bed methane;
                            ``(v) methane hydrates;
                            ``(vi) light oil derived from shale or 
                        other formations;
                            ``(vii) natural gas liquids; and
                            ``(viii) all conventionally and 
                        unconventionally produced hydrocarbons.
            ``(3) Policy reform.--The term `policy reform' means a 
        process at an international financial institution that changes 
        rules, regulations, or institutions and results in 
        incentivizing fossil fuel investment, such as by lowering tax 
        liability or increasing energy tariffs.''.

SEC. 3. PROHIBITION ON FOREIGN ASSISTANCE THAT WOULD SUPPORT FOSSIL 
              FUEL ACTIVITY.

    The United States may not provide, directly or indirectly (such as 
through a financial intermediary), any loan, insurance, guarantee, or 
extension of financial or technical assistance, including policy 
guidance, to any country or entity for any fossil fuel activity (as 
defined in section 2001(d) of the International Financial Institutions 
Act, as added by section 2) or a related infrastructure project, 
including through the United States International Development Finance 
Corporation, the Export-Import Bank of the United States, the Trade and 
Development Agency, the United States Agency for International 
Development, or the Millennium Challenge Corporation.
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