Britain could vote against World Bank granting a $3.7 billion loan to South Africa to build a coal power plant that would be bigger than Britain's largest coal power plant. Green activists are trying to pressure the government to oppose this loan grant by making it an election issue. If Britain does vote against the proposal on 8th April it would follow the United States in at least partially adopting a policy to oppose World Bank sponsored carbon-intensive power plants in developing countries.

The US Executive Director at the World Bank Group Whitney Debevoise wrote a letter to the World Bank in January saying that multilateral funding agencies like the World Bank should ensure that developing countries embark on a less carbon-intensive economic development path. These controversial developments would only make the path of reconciliation after the fruitless and confrontational Copenhagen Climate Summit.

Asia, Africa: 'Fossil-fueled' Economic Growth

Major growth in fossil fuel-based power installations would be witnessed in Asia and Africa as the major economies in the regions look towards rapid economic and social development. Major economies like India, China and South Africa are still heavily dependent on fossil fuels especially coal with millions of homes still not connected to the grid.

Demand for rural electrification would fuel the bulk of power installations in the near to medium term and expensive and relatively less efficient renewable energy cannot provide a reasonable and affordable solution to this problem. Coal is readily available in all these countries with China and India even looking strategic partnerships to secure adequate and continuous supply of better quality coal.

Although developed countries had agreed to set up an adaptation fund to help developing and poor countries get access to renewable energy technologies, the realization of the plan could take at least few years. Therefore, attempting to block the conventional means of generating power makes little economic, political and strategic sense.

The Asian economies are leading the global economic resurgence, blocking financial help to such core economic and infrastructure installations could not only impact their economic growth but could also have ripple effects around the world.

Progressive Transition to Renewables

Transition to renewable energy is essential but it faces several political, social and economic hurdles which the developed countries are aware of, given there inability to lead the world in reducing carbon emissions and stimulating substantial investments in renewable energy sector. Developing countries cannot be dictated when and how to make the transition to renewables. They simply do not have the resources to take along the millions who are still struggling to be a part of the rapidly growing economies.

The developed countries must provide for adequate economic and technological resources to the developing countries to make the transition clean energy transition before they proceed to block funding for fossil fuel-based infrastructure. As agreed at the COP15 Copenhagen Climate Summit, developed and developing countries should collaborate on developing affordable clean energy technologies. International R & D initiatives could also possibly address the issue of intellectual property rights which is currently delaying the transfer of technology.

Incidentally, the loan grant also includes $260 million for wind and solar energy and $490 million to reduce carbon footprint of the power plant. It is clear that the developing and poor countries would require more time to move to renewable energy sources for power generation and thus the developed countries should support their efforts no matter how small they seem.

The developed countries should refrain from adopting such controversial policies as they can adversely impact the progress on an international climate deal. The World Bank should proactively set standards while giving financial assistance to developing countries. The World Bank should consult with the government of the applicant country and chalk a plan to mitigate the carbon emissions that would result from the fossil fuel-based power plant. No blanket rule can be applied to all developing countries since the have different natural resources and have different social and economic needs. Thus, the World Bank should aim at progressive inclusion of carbon mitigation measures while funding energy projects in poor and developing countries.

Source: The Times
Photo Credit: Davipt at Flickr (Creative Commons)
The views presented in the above article are author’s personal views and do not represent those of TERI/TERI University where the author is currently pursuing a Master’s degree.