King Coal gets a chill as the World Bank tackles global warming
By Geoffrey Lean (The Telegraph) - July 19, 2013
It had to come, but it is still a significant moment. The World Bank – which over the last 20 years has financed more coal-fired power stations around the globe than any other international institution – has just announced that it will stop doing so “except in rare circumstances”.
The announcement marks an important symbolic step in the bank’s transition from being one of the world’s principal environmental bogeyman to being a champion of combating climate change, a process accelerated by its relatively newly appointed President, Jim Kim.
The new policy – which follows a similar pledge by the US administration – will restrict financial support for electricity generation from coal, the dirtiest and most climate threatening of the fossil fuels, to countries that have “no feasible alternatives”. It will instead scale up its support for hydroelectric power and natural gas.
The practical effect of the announcement will, in fact, not be that great. The bank, which annually funds over $50 billion of infrastructure projects, has not financed a major coal plant since lending South Africa $3 billion in 2010 for a highly controversial power station near Johannesburg. And, as a further sign of its new environmental emphasis, it has doubled its support for renewable energy around the world.
The greening of the World Bank owes much to two Brits, Ian Johnson its Vice President of Sustainable Development for the best part of a decade from 1998, and Rachel Kyte, who now holds the post. But it has been given a big push by the arrival of Kim, the first scientist to serve as its president, who has made tackling global warming one of his chief priorities and has produced two groundbreaking reports warning of its dangers in less than a year in the job.
Not that the move has escaped environmental criticism. Greens point out that hydropower dams also cause grave environmental damage, flooding valleys and displacing people, and often silting up – while burning gas also releases carbon dioxide, if only about half as much as coal. They would like it to put much more emphasis on solar, wind, tidal and geothermal power, pointing out, for example, that over the last decade the world has installed more windpower than hydroelectric generation.
But Ms Kyte calls it “a pragmatic set of directions for energy development”, adding: “We need to be sure that everyone is reaping the benefits of modern energy by 2030, and we need to do it sustainably.” In 20 African countries, only one in five of the people at present have electricity.
The hope is that the move will stimulate other lenders also to heavily restrict support for coal. But most are built without such international funding, especially in China. In one mildly encouraging sign, however, China did not block the new policy, as it did previous attempts to cut back funding for the fuel.