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.

Photo: Getty
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Who will win the Copeland by-election?

Labour face a tricky task in holding onto the seat. 

What’s the Copeland by-election about? That’s the question that will decide who wins it.

The Conservatives want it to be about the nuclear industry, which is the seat’s biggest employer, and Jeremy Corbyn’s long history of opposition to nuclear power.

Labour want it to be about the difficulties of the NHS in Cumbria in general and the future of West Cumberland Hospital in particular.

Who’s winning? Neither party is confident of victory but both sides think it will be close. That Theresa May has visited is a sign of the confidence in Conservative headquarters that, win or lose, Labour will not increase its majority from the six-point lead it held over the Conservatives in May 2015. (It’s always more instructive to talk about vote share rather than raw numbers, in by-elections in particular.)

But her visit may have been counterproductive. Yes, she is the most popular politician in Britain according to all the polls, but in visiting she has added fuel to the fire of Labour’s message that the Conservatives are keeping an anxious eye on the outcome.

Labour strategists feared that “the oxygen” would come out of the campaign if May used her visit to offer a guarantee about West Cumberland Hospital. Instead, she refused to answer, merely hyping up the issue further.

The party is nervous that opposition to Corbyn is going to supress turnout among their voters, but on the Conservative side, there is considerable irritation that May’s visit has made their task harder, too.

Voters know the difference between a by-election and a general election and my hunch is that people will get they can have a free hit on the health question without risking the future of the nuclear factory. That Corbyn has U-Turned on nuclear power only helps.

I said last week that if I knew what the local paper would look like between now and then I would be able to call the outcome. Today the West Cumbria News & Star leads with Downing Street’s refusal to answer questions about West Cumberland Hospital. All the signs favour Labour. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.