MEMBERS of the Organization for Economic Cooperation and Development (OECD) struck an historic agreement yesterday to scale back public financing for coal-fired power plants, dealing another blow to the industry ahead of a global summit on climate change in Paris.

    Under the agreement, the world’s richest economies will restrict subsidies that helped companies export technology to build coal-fired power plants, among the largest sources of emissions blamed for rising global temperatures.

    The policy would cut off financing for 85 percent of coal projects going forward, according to a senior administration official who briefed reporters.

    Major lenders, including the U.S. Import-Export Bank, the World Bank and the European Investment Bank, have already cut support for coal projects. The new agreement among the 34 OECD nations means countries, including Japan and South Korea, will for the first time restrict their funding as well. It’s more bad news for a coal industry already hit by slumping global prices, new environmental regulations and slowing growth in China.

    The agreement is also an international environmental victory for U.S. President Barack Obama, whose domestic climate policies remain under attack. The Republican-led U.S. Senate voted Tuesday to block new rules on power plant pollution, saying they’d be too costly. The White House threatened to veto the measure.

    According to an analysis by the World Resources Institute in Washington, some 1,200 coal-fired plants have been proposed for construction across the globe. More than three-quarters are in India and China.

    “Climate change is one of the greatest challenges of our time,” OECD nations said in an official communique Tuesday. “We reaffirm our commitment to rationalize and phase out fossil fuel subsidies that encourage wasteful consumption.”

    The Obama administration has sought the international financing change for years but faced opposition by Japan, which opposed reducing subsidies benefiting domestic technology exporters including Toshiba Corp. The breakthrough came earlier this year when the two countries agreed to a deal to allow some financing to continue.

    The new policy, which will take effect in a year, would provide subsidies only for so-called “ultra-supercritical” coal-fired power plants — those built to the most stringent environmental standards. The Obama administration estimates that 85 percent of coal power plants will be ineligible for financing from OECD countries going forward.

    Financing restrictions would again tighten in four years under the agreement. (SD-Agencies)