Do What I Say, Not What I Do: Coal and International Finance Institutions
The world of international energy financing has become a bit stranger lately. While the World Bank came out with a new energy strategy that will end funding for coal plants except in rare circumstances, the draft language for a new energy strategy at the European Bank for Reconstruction and Development (EBRD) would allow retrofits to dirty, existing facilities, which could allow some of the most deadly plants to continue operating for decades to come. You might imagine, then, that the World Bank is actively supporting sustainable energy in Kosovo while EBRD pushes fossil fuels, but in fact the reverse is true.
Despite its new energy strategy and President Dr. Jim Yong Kim's urgent calls for the world to act on climate change, the World Bank continues to press forward with a new coal-fired power plant in Kosovo, even though there is strong grassroots opposition to the project and studies have shown the county's energy needs can be met through clean technology that will cost less and create more jobs. Meanwhile, although it may still consider supporting coal in Kosovo, the EBRD announced new sustainable energy investments in the country last week, the exact type of initiative the World Bank should promote under its more robust energy strategy.
The World Bank argues that the new plant will be cleaner than existing coal-fired power plants, which kill 835 people in Kosovo every year, but even this is a distortion of the truth. Unfortunately, it's not the statistic about the number of deaths that is being distorted, but rather the idea that the proposed plant will be "clean." In fact, the new plant will not even employ the best available technology to reduce deadly pollution.
The tide is turning against coal. As health effects are more widely known and as grassroots opposition grows, as clean technology becomes cheaper and the forecast for coal in international markets becomes bleaker, large financial institutions are turning away from the dirty fuel in droves. In June, President Obama announced an end to financing for coal plants overseas with public funds, a move that has already spurred the U.S. Export-Import Bank (Ex-Im) to reject a dirty coal plant in Vietnam, possibly signaling an end to the institution's fossil fuel binge. The Nordic countries then endorsed the plan, putting further pressure on Export Credit Agencies to follow Ex-Im's lead and cutoff support for coal. And the private sector is taking notice too. HSBC, Citi, and Goldman Sachs have all sounded the alarm on the dwindling prospects for coal and fossil fuels.
In this environment, there is no excuse for the World Bank or EBRD to leave loopholes open or make half promises. Both institutions must commit to strong policies that end support for dirty coal projects, and then they must fully implement these policies to protect public health and ensure that funding goes to clean energy projects that power local communities without the deadly pollution that accompanies coal.
-- Nicole Ghio, Sierra Club International and Trade Representative