World Bank moves to limit funding for coal generation

The Bank has shifted away from coal power, and is trying to encourage developing nations to do the same.

The World Bank has announced a major repositioning of how it funds energy projects in developing nations, promising to massively scale back its support for coal-powered generation. In a paper out this week, the group confirms that it will provide financial support for greenfield coal power "only in rare circumstances." It continues:

Considerations such as meeting basic energy needs in countries with no feasible alternatives to coal and a lack of financing for coal power would define such rare cases.

At the same time, the bank will support interventions aimed at reducing the greenhouse gas emissions associated with coal plants, saying that:

Efficiency improvements at existing plants are among the most cost-effective means of reducing local and global environmental impacts of coal.

The topic of emissions in developing nations is a tricky one. On the one hand, many such countries see clean power as an unaffordable luxury, and resent the fact that the global north was able to develop using polluting industry and only then develop an environmental conscience. On the other, even though developed nations contribute a disproportionate chunk of global emissions, their per capita contributions are declining (or rather, increasing at a slower rate) and developing nations' just keep on climbing.

Against that background, an obvious first step is for international development programmes to stop actively helping developing nations develop polluting technologies instead of renewable ones. And when the World Bank makes a decision to change its focus, there's some heft to it: the group financed over $50bn worth of infrastructure projects last year.

That said, in practice, the change might not mean much. The Washington Post's Brad Plumer points out that it's already three years since the Bank's last big funding of a coal project, when it loaned $3bn to South Africa to build a plant near Johannesburg.

But the new president of the Bank, Jim Yong Kim, warns that there'll be at least one difficult choice quite soon. Plumer writes:

The one major test of the new policy will come in Kosovo,which wants to build a new 600-megawatt plant fired by lignite coal, a particularly carbon-intensive fuel. The bank needs to decide whether to offer loan guarantees, and Kim has signaled before that Kosovo may be an exception to the coal ban. “Climate change and the coal issue is one thing,” hesaid in April, “but the humanitarian issue is another, and we cannot turn our backs on the people of Kosovo who face freezing to death if we don’t move in.”

The move follows the Obama administration's plan to do the same thing. In June, the president said that he was "calling for an end to public financing for new coal plants overseas unless they deploy carbon-capture technologies, or there’s no other viable way for the poorest countries to generate electricity", which mainly affected the US Export-Import Bank, an institution which loans money to foreign nations looking to buy infrastructure from American companies.

All said and done, though, the fact that the biggest recent shifts against fossil-fuel generation are limits on foreign contribution is telling. When countries start changing their own behaviour – rather than just attempting to change other's – is when we'll know they are really serious about cutting emissions. And they need to be really serious really soon, because time is running out.

The World Bank. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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David Cameron’s speech: a hymn to liberalism from a liberated PM

The Prime Minister spoke with the confidence of a man who finally has a full mandate for his approach. 

At every one of his previous nine Conservative conference speeches, David Cameron has had to confront the doubters. Those Tories who rejected his modernisation of the party from the start. Those who judged it to have failed when he fell short of a majority in 2010. Those, including many in his own party, who doubted that he could improve on this performance in 2015. Today, rather than confronting the doubters, he was able to greet the grateful. As the first majority Conservative prime minister for 18 years, he rightly savoured his moment. "Why did all the pollsters and pundits get it so wrong?" he asked. "Because, fundamentally, they didn't understand the people who make up our country. The vast majority of people aren't obsessives, arguing at the extremes of the debate. Let me put it as simply as I can: Britain and Twitter are not the same thing." Labour should pin that line to its profile. 

With a full mandate for his approach, Cameron went on to deliver his most unashamedly liberal speech to date. Early on in his address, he spoke with pride of how "social justice, equality for gay people, tackling climate change, and helping the world's poorest" were now "at the centre of the Conservative Party's mission". A lengthy section on diversity, lamenting how "people with white-sounding names are nearly twice as likely to get call backs for jobs than people with ethnic-sounding names", was greeted with a standing ovation. Proof, if needed, of how Cameron has changed his party beyond recognition. The former special adviser to Michael Howard, who avowed that "prison works", told his audience that prison too often did not. "The system is still not working ... We have got to get away from the sterile lock-em-up or let-em-out debate, and get smart about this." From now on, he declared, the system, would "treat their [prisoners'] problems, educate them, put them to work." 

There were, of course, oversights and lacuna. Cameron reaffirmed his commitment to a budget surplus but glossed over the unprecedented, and many believe undeliverable, that will be required to achieve it (and which may fail to do so). He hailed the new "national living wage" with no mention of the tax credit cuts that will leave the same "strivers" worse off. His "affordable" starter homes will be unaffordable for average-earning families in 58 per cent of local areas. But it is a mark of Cameron's political abilities that it was easy to forget much of this as he spoke. Like George Osborne, he deftly appropriated the language of the left ("social justice", "opportunity", "diversity", "equality") to describe the policies of the right. Cameron is on a mission to claim ownership of almost every concept associated with Labour. The opposition should not sleep easily as he does so. 

There was little mention of Labour in the speech, and no mention of Jeremy Corbyn by name. But when the attack came, it was ruthlessly delivered. "Thousands of words have been delivered about the new Labour leader. But you only really need to know one thing: he thinks the death of Osama bin Laden was a 'tragedy'". The description of Corbyn as the "new Labour leader" shows the Tories' ambition to permanently contaminate the party, rather than merely the man.

There are plenty of potential landmines ahead for Cameron. The comically lukewarm applause for his defence of EU membership was a reminder of how divided his party is on this issue. But today, he spoke as a man liberated. Liberated by winning a majority. Liberated by not having to fight an election again. Like a second-term US president, he was able to speak of how he was entering "the second half of my time in this job". Tributes to Osborne (the "Iron Chancellor) and Boris Johnson (greeted with a remarkable standing ovation) alluded to the contest to come. But whoever succeeds him can be confident of assuming a party in good health - and more at ease with the modern world than many ever thought possible. 

George Eaton is political editor of the New Statesman.