US and World Bank ‘don’t understand’ impact of coal funding withdrawal on poor countries, says senior official
(Pic: PwC)
By Sophie Yeo in Cancun
A senior official at the African Development Bank says it has no plans to stop funding coal power, accusing critics from rich countries of “hypocrisy” in blocking fossil fuel investment on the continent.
Recent moves by the World Bank, European Bank for Reconstruction and Development, Scadanavia, the UK and US to slash overseas coal funding are unfairly penalising poorer countries, said Kurt Lonsway, environment and climate change manager at the AfDB.
“It’s very easy for some of our partners sitting in the more developed countries to make certain pronouncements without understanding the whole impacts on the developing world of what they’re saying and unfortunately a lot of it’s political,” he told RTCC.
“There are obviously very strong interest groups who have the luxury now of basically deciding how other people should live elsewhere.”
He added: “I find it quite hypocritical for us to say that we’ve developed, we’ve used our coal resources and now we’re telling them they can’t do the same.”
The AfDB is one of the world’s leading development banks, with a capital rating of US$66.98 billion, and approved projects worth $4.39 bn in 2013.
US based NGO Natural Resources Defense Council says that the AfDB spent $ 2.84billion on coal projects between 2007 and 2013.
Lonsway said the Bank will promote renewables where it can across the continent, but argued countries must be given the right to develop their own natural resources.
Around 1.4 billion people worldwide lack access to electricity. Coal’s reliability, simplicity and relatively low costs makes it a fuel of choice for many governments, despite the pollution and health side-effects.
“At least in the short term the countries want the ability to use their natural resources. They insist on that. They have the right,” Lonsway said.
Climate frontline
Western governments and development banks have come under huge pressure in the past year to stop backing fossil fuel development in poorer parts of the world.
Together with divestment and Arctic drilling, the campaign has been one of the most high-profile attempts to squeeze an industry that is the biggest source of man made CO2 emissions.
In May World Bank President Jim Yong Kim said the bank would avoid coal “except in the most exceptional circumstances”, a promise that is currently being tested by the government of Kosovo, which wants the bank to help finance a $1.4 billion 600 megawatt coal plant.
But perhaps the biggest blow to the coal industry came last October, when the US Treasury declared an end to new coal plants around the world.
“What we’re trying to do is to use the leverage associated with public finance to help developing countries move in the direction of cleaner energy,” Lael Brainard, under secretary for international affairs at the Treasury Department said at the time.
But Lonsway points out that US coal exports have risen sharply over the same period, suggesting that the US has simply displaced its emissions to other countries.
He added that the government seized the boom in shale gas for its economic benefits, rather than as a pointed strategy to address climate change.
“Countries that are serious about cutting emissions would not only shut down their coal fired power plants but also shut down their coal mines. Then to me that says something,” he said.
He added that he believed Obama was serious about his climate agenda, but only if it did not prove “a burden to the economy.”
This will be tested this week, when the US Environmental Protection Agency issues its new standards for existing coal-fired power plants, in an attempt to limit domestic emissions.