UPDATE 1 - Greens target U.S. banks over coal financing

(Updates with bank comments, paragraphs 5-8)

By Steve James

NEW YORK, Oct 2 (Reuters) - An environmental group called on two U.S. banks on Tuesday to stop underwriting a "coal rush" to build 150 new coal-fired power plants, which it said would add to greenhouse gas emissions that cause climate change.

The Rainforest Action Network launched a campaign targeting Citigroup (C.N) and Bank of America Corp (BAC.N) because they finance coal company projects that the group charges cause carbon dioxide (CO2) emissions and toxic mercury pollution.

Coal mining, it said, is responsible for thousands of deaths annually, while mountaintop removal mining and strip mining destroy entire ecosystems and communities.

RAN stopped short of calling for a boycott of the banks, but Rebecca Tarbottom, the group's finance campaign director, said Citi and Bank of America could expect "a ruckus in the streets," through protests and possible shareholder action.

Both companies responded in statements to Reuters.

"The reality is that, as a country, over 50 percent of the electricity we all consume comes from coal," said Bank of America, adding it was "aggressively investing in and financing the development and use of cleaner renewable energies."

Citigroup said: "Citi, together with its clients, environmental organizations and other stakeholders, is taking a responsible and strong leadership position on climate change and is on record as supporting comprehensive efforts to move forward on the complicated issue of climate change."

The bank said it had committed to reducing the carbon emissions of its own operations by 10 percent by 2011 and was recently recognized as No. 1 among global banks by the Carbon Disclosure Project, a coalition of global investors.

During a teleconference from its San Francisco headquarters, RAN said: "Tell Citigroup and Bank of America to stop funding dirty coal projects and to redirect their resources and investments toward clean energy.

"Don't let your money be used to fund climate change.

"These banks MUST set real goals to reduce the 'financed emissions' from their investment portfolio and start funding the future," RAN said, accusing the pair of pledging to address global climate change while still funding the coal companies.

RAN said that rather than phase-out coal and reduce dangerous emissions, coal's proponents are pushing for the construction of more than 150 new coal-fired power plants throughout the United States.

"This new coal rush would add between 600 million and 1.1 billion tons of additional C02 emissions annually and negate nearly every other effort currently on the table to combat climate change," the group said.