The World Bank is taking a biased approach to coal development in its forthcoming energy strategy, one of the bank's top executives told ClimateWire.
Rogério Studart, the World Bank executive director for Brazil, seven other Latin American and Caribbean countries and the Philippines, called the agency's plan to prevent middle-income countries from accessing loans to build new coal plants, but still grant them to the poorest nations, a dangerous precedent.
"It's like you have a club and you say we're not going to have people smoking inside anymore -- except for the poorest people," Studart said. But, he cautioned, that's not to say he thinks loans for coal should be eliminated altogether. Far from it. Banning coal, he said, would only hurt the poorest countries that currently can't afford cleaner or renewable alternatives.
"I'm personally concerned about coal, because I'm concerned about the future of my children," Studart said. But, he argued, "some countries cannot provide energy access, particularly in Africa, without coal, and the bank knows that. It would be bizarre to say we're not going to do coal."
Studart's comments, in a wide-ranging interview in his 12th-floor World Bank office last week, came as he and his colleagues prepared to address the single most contentious issue that has come before the bank in years. The proposed "Energy Sector Strategy of the World Bank," a sweeping blueprint outlining the institution's plans to bring power to the 1.4 billion people living in darkness, has pitted the United States and many European nations against China, Pakistan, Africa and others hungry for electricity (ClimateWire, March 30).
Yesterday, a closed-door meeting of a key committee charged with approving the strategy ended in bitter stalemate over coal, three people close to the discussions said. One person described the proposal as now being in a state of "suspended animation."
More than a year in the making, the energy strategy has become the stage where governments and environmentalists play out the same intractable fights they wage at the U.N. Framework Convention on Climate Change -- namely, how much of the burden of fighting rising carbon emissions should developing nations bear?
An 'awkward' conversation over sustainability
Environmental groups are pressing the World Bank to eliminate coal from its energy plans altogether. Many have described the proposed energy strategy as a good first step but still inadequate. Developing countries, meanwhile, are fighting back hard -- arguing that wealthy, coal-gobbling Western nations should not try to address global warming on the backs of their citizens, many of whom are still forced to cook using dung for fuel and to wash clothes by candlelight.
At the Committee on Development Effectiveness yesterday, sources said China and others called the strategy discriminatory and accused Western nations of co-opting the bank on coal.
"This is an institution of 187 members. We should not be listening to just a few of them," Shaolin Yang, China's executive director, told the board, according to one person in the meeting. Yang could not be reached for comment.
Meanwhile, Studart, who serves this year as head of the group of developing nations at the bank, told ClimateWire that last year's pitched battle over a $3.75 billion loan to help South Africa build a coal plant underscored the institution's political divisions. The bank board ultimately approved the loan despite a global campaign waged by environmental activists and abstentions from the United States, the United Kingdom, the Netherlands and Italy.
"It makes the conversation really awkward. [Industrialized nations tell us] that we should have a low-carbon growth strategy. Yes, but how about you?" Studart said. Similarly, while he praised Brazil's efforts to protect the Amazon rainforest, Studart also noted the irony of being required to do so. "Some countries look like golf courses, and you say, 'You are destroying all your forests.' So now my people have to keep it for you guys?"
Calling poverty an "international public evil," Studart called on the World Bank directors to find a different way to fight climate change than imposing restrictions on how countries -- or a certain bloc of countries -- can rise out of poverty.
The proposed energy strategy is a "good compromise" on most items, Studart said. But he also argued that in the areas of coal and biofuels -- an energy source close to the Rio de Janeiro native's heart -- the World Bank has imposed wrongful limitations.
"I am totally in favor of the bank supporting coal because some countries can't afford the alternatives," he said. "As a general principle, I think the bank should be able to be as flexible as possible and help the countries produce and develop clean energy."
Will Zoellick step in?
Those close to the energy strategy negotiations say it's not at all clear who will win this debate. But all three who described yesterday's meeting said the United States and others that support the energy strategy offered only tepid support while China, Brazil and other critics mounted a coordinated and strategic opposition.
Asked for comment, a World Bank spokesman emailed a statement noting that the committee "agreed on the need for more time to review the document in further detail. As a result, the planned posting in late April of the strategy document on the Bank's website may be postponed."
Now, sources said, it will be up to Anna Brandt, the executive director representing Norway, other northern European countries and Iceland, who heads the development committee to work the various members and seek a compromise. Environmental activists, often loath to publicly criticize developing countries, are expected to lean heavily on the U.S. and European World Bank members to force coal restrictions upon the bank. But the fight could come down to World Bank President Robert Zoellick himself.
"That's the role that the president has to play," one person in favor of the coal restrictions said. "Zoellick is the one who has to at some point knock heads together."
Want to read more stories like this?
E&E is the leading source for comprehensive, daily coverage of environmental and energy politics and policy.
Click here to start a free trial to E&E -- the best way to track policy and markets.