The World Bank is spending billions of pounds subsidising new coal-fired power
stations in developing countries despite claiming that burning fossil fuels
exposes the poor to catastrophic climate change. The bank, which has a goal
of reducing poverty and is funded by Britain and other developed countries,
calls on all nations in a report today to "act differently on climate
It says that the world must reduce its dependence on fossil fuels, but it is
funding several giant coal-burning plants that will each emit millions of
tonnes of carbon dioxide a year for the next 40 to 50 years.
Britain is contributing £400million to a World Bank fund that claims to
support "clean technology" but is financing coal power plants.
The bank's World
Development Report says: "Developing countries are
disproportionately affected by climate change - a crisis that is not of
their making and for which they are the least prepared. Increasing access to
energy and other services using high-carbon technologies will produce more
greenhouse gases, hence more climate change.
The report says that between 75 and 80 per cent of the damage caused by
climate change through drought, floods and rising sea levels will happen in
developing countries. It calls on richer nations, including Britain, to
increase the amount that they spend on helping developing countries to adapt
to climate change.
The bank also wants global spending on research and development on sustainable
sources of energy to be increased from the present $70billion (£40billion) a
year to $700billion.
The report says that unless the world acts now to cut carbon dioxide emissions
it faces a 5C (9F) rise in global temperatures by the end of the century.
"Such a drastic temperature shift would cause the possible dieback of the
Amazon rainforest, complete loss of glaciers in the Andes and Himalayas, and
rapid ocean acidification leading to death of coral reefs," it says.
"The speed and magnitude of change could wipe out more than 50 per cent of
species. Sea levels could rise by one metre this century, threatening 60
million people. Agricultural productivity would likely decline throughout
the world and over three million additional people could die from
malnutrition each year."
The 260-page report advises against "locking the world into high-carbon
infrastructure" but makes no mention of the bank's plans to subsidise coal
power plants in India, South Africa, Botswana and other developing
Last year the bank and its partner, the Asian Development Bank, approved
$850million in loans to finance a coal-fired plant in Gujarat, western
The Environmental Defence Fund, a US lobby group, said that the plant, the
first of nine planned in India, would be one of the biggest new sources of
greenhouse gases on Earth, emitting 26.7million tonnes of CO2 a year for the
next 50 years.
The bank is also contributing $5billion towards South Africa's power
generation expansion plan, which includes six coal plants.
Marianne Fay, the bank's chief economist for sustainable development, said
that coal was the cheapest and most secure way to deliver electricity to the
1.6billion people without it. She said: "There are a lot of poor countries
which have coal reserves and for them it's the only option. The [bank's]
policy is to continue funding coal to the extent that there is no
alternative and to push for the most efficient coal plants possible.
Frankly, it would be immoral at this stage to say, ‘We want to have clean
hands, therefore we are not going to touch coal'."
Tim Jones, policy officer of the World Development Movement, which campaigns
to reduce poverty, said: "The World Bank is acting in the interests of
Western countries and companies and not in the long-term interests of the
"It is an absolute disgrace that money meant for clean technologies will
actually be used for building new coal power stations. Every pound of green
aid that will be spent on funding coal power through the World Bank is money
that should be spent on supporting renewable energy in developing countries."
The bank said that it had lent $5billion for fossil fuel projects in the past
three years and $11billion for "low-carbon" alternatives.
A spokesman for the Department for International Development in Whitehall
said: "We have informed the World Bank that we will be scrutinising future
coal-fired power plant proposals to ensure that they have explored all other
options (including accessing the additional finance needed for cleaner
alternatives), and we would expect any future coal plants to reach the
highest international standards."