Skip directly to content

World Bank to Stop Financing New Coal Burning Facilities, With Some Exceptions

Follow

 

Following President Obama's climate speech on Tuesday, calling for cuts to power plant emissions in the U.S., the World Bank Group released a report, stating that the world financial institution would no longer finance new (also known as  "greenfield") coal-powered plants worldwide, except in "rare cases."
 

Modeled on the objectives of the United Nations Sustainable Energy for All (SE4ALL) initiative, which include achieving universal access with a focus on the poor and doubling renewable energy by 2030 by ramping up investments, the report states that the World Bank will engage in regional planning efforts, find solutions to regulatory and financial obstacles that currently impede the development of renewables and promote market and policy solutions.
 

According to the International Energy Agency (IEA), by 2017 "the world will burn around 1.2 billion more tons of coal per year," which is more than what the U.S. and Russia combined consume per year today. China is the world's largest coal importer, Indonesia the largest exporter, with Australia soon to overcome it, and India will become the largest importer by 2017. Overall, demand for coal, which supplies 40 percent of the world's electricity, is decreasing worldwide, but its share among energy sources is still increasing, with its global consumption having increased 60 percent since 2000.
 

A 2012 working paper, "Global Coal Risk Assessment: Data Analysis and Market Research," sponsored by the World Resources Institute (WRI) estimates that 1,199 new coal-fired plants are being proposed globally, with China and India accounting for 76 percent of them. In 2010, China, the U.S. and India led the world in both coal production and consumption. Chinese companies, several of them state-owned, lead in the number of proposed power plants.
 

A June 10 IEA report "Redrawing the Energy-Climate Map" found that "limiting the construction and use of the least-efficient coal-fired power plants delivers more than 20% of the emissions reduction and helps curb local air pollution. The share of power generation from renewables increases (from around 20% today to 27% in 2020), as does that from natural gas."
 

The report sets forth four objectives, known as the “4-for-2˚C” scenario, which would allow global temperatures to rise by only 2 degrees Celcius by 2020 at no net cost - all related to reducing fossil fuel production - estimating that "delay doubles the cost of action: from $1.2 trillion to $2.3 trillion."
 

A 2009 Environmental Defense Fund report "Foreclosing the Future" found that lending institutions like the World Bank funded 88 new and expanded plants since 1994, whose carbon emissions per year are projected at more than 77 percent of current coal-powered plant emissions in the European Union. Coal was the number one fuel used worlwide with an annual growth rate of 5 percent. The consumption of coal in non-OECD countries is expected to skyrocket by 2030, with 97 percent of the world's share of CO2 emissions coming from developing countries. Between 1994 and 2009, the World Bank Group was the second highest financer of coal-fired powerplants worlwide, second to the Japan Bank for International Cooperation in monetary investment, but with the highest number of plants financed.
 

Spotlight on Kosovo
 

Recently Gino Azletta, an executive director of the World Bank Group for various European countries, visited Kosovo in anticipation of the construction of a new coal-fired power plant, Kosovo C outside the capital, Pristina. A small nation of 1.6 million, Kosovo already has two coal power plants, Kosovo A and B. The government of Kosovo would decomission Kosovo A, considered one of the most polluting plants in Europe, once Kosovo C is operational.
 

The Kosovo Civil Society Consortium for Sustainable Development (KOSID) responded to Azletta's comment that the World Bank "will support the building of a new coal power plant in Kosovo as it will not allow for people there to freeze to death" by calling for investment in renewable energy, such as hydro and wind, instead and citing the detrimental environmental and health effects of burning coal that the World Bank itself has published.
 

According to a KOSID analysis, the standards set for Kosovo C allow for twice the air pollutant standards as the new U.S. emission standards and represent outdated technology in comparison with EU and U.S. standards. Investment in renewables would save over twice the initial capital cost of the proposed plant.
 

The Renewable & Appropriate Energy Laboratory Energy & Resources Group at the University of California, Berkeley published a detailed 2012 report on sustainable energy options for Kosovo. Identifying the importance of offsetting the social cost of low-quality coal and providing an impetus for job growth in Kosovo, the report found the following:
 

"A low-carbon path exists for Kosovo that integrates aggressive energy efficiency deployment, use of both large and small-scale hydropower, solar, biomass and extensive use of wind energy while reducing human and ecological damage. This path whilst delivering 38% of the energy demand through renewable resources can also provide almost 30% more jobs than a business as usual path and it does so at an estimated cost savings of 50% relative to a base-case scenario that includes a new coal power plant."


350.org is running a petition to tell the World Bank, the U.S. Embassy in Kosovo and the Kosovo Parliament to stop the construction of Kosovo C.

 

This 15 minute short documentary spans Kosovo, South Africa and Washington DC to unravel the complex and unfolding story of KOSOVO'S COAL: A World Bank Legacy: