Report: Foreclosing the future
Investment in coal-fired power plants hinders the fight against global warming
An Environmental Defense Fund report [PDF] has found that the World Bank and other international public financial institutions are continuing a 15-year trend of supporting coal-fired power plant construction throughout the developing world and economies in transition.
By financing this new carbon-intensive infrastructure, multilateral development banks (MDBs) and export credit agencies (ECAs) of the industrialized world are hamstringing the fight against global warming and setting back longer term efforts to alleviate poverty in the world's poorest countries.
- Since 1994, the World Bank, other MDBs and ECAs financed new construction or expansion of 88 coal-fired power plants.
- These plants will generate roughly 791 million tons of CO2 emissions per year, or more than 75% of the current emissions for coal-fired power in the entire European Union.
- According to the International Energy Agency, without a decisive reorientation of energy investment from carbon-intensive sources in developing and emerging economies, atmospheric CO2 will overshoot the point of no return for dangerous global warming, even if the industrialized world were to reduce its CO2 emissions to zero by 2030.
The time for change is now
EDF urges the MDBs and ECAs to hasten the shift to renewable energy by adopting the following recommendations:
- Deploy public international finance in support of renewable energy, energy efficiency and other alternatives to coal. Scarce public international resources should go to renewable technologies and energy efficiency programs, which will help countries grow and alleviate poverty while reducing the impacts of global warming on the poor.
- Calculate coal's true cost; MDBs and ECAs should institute comprehensive Greenhouse Gas Screening and Accounting and Shadow Carbon Pricing for all projects that emit greenhouse gases. (Shadow Carbon Pricing includes the external cost of carbon emissions to society and the economy.)
- Create under the auspices of the United Nations Framework Convention on Climate Change the first international database of GHG-intensive investments (including coal plants) and their emissions by public finance institutions. No such database currently exists.
- Negotiate as soon as possible, an international agreement among OECD member nations on a common climate/GHG policy for their ECAs.
Read the summary [PDF] of "Foreclosing the Future" to learn more about the financing behind these plants and their impact on the fight against global warming.