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US Asks World Bank To Stop Funding Coal-Fired Power Plants In Developing Countries

In an attempt to step up pressure on the developing countries to take up ambitious emissions reductions and forcing them to move to renewable energy sources for power generation, a high ranking US official has written to the World Bank recommending it to stop financing coal-fired plants in the developing countries.


In a letter written to the World Bank, the United States Executive Director at the World Bank Group, Whitney Debevoise said that multilateral development banks like the World Bank have the responsibility of building a financing framework that ensures mitigation of greenhouse gas emissions and strengthens the developing countries economies against climate change.

These controversial recommendations have the potential of sparking off an international diplomatic storm if the developing countries like China and India opt to challenge the contents of the letter. India and China, along with scores of other developing countries, continue to rely on coal as their primary power generation source. Developing countries are looking to expand their coal-fired generation in order to boost economic growth while looking to mitigate carbon emissions by gaining access to clean technology through an international climate deal.

Major growth in coal-fired power generation is expected to come from Asia. China has build huge reserves of coal while India intends to bring cheap electricity to its villages. There is no doubt that international financing institutions have a responsibility towards ensuring that the projects are environmentally sustainable and ultimately contribute to cleaner economic growth of the country. However, these institutions must also ensure that clean technologies are available to the developing countries.

Pulling the plug off the power generation projects would directly impact the economic growth and rate of improvement of standard of living of the local people. The solution to the rising carbon emissions is not as simple as forcing the developing countries to move to renewable energy sources for meeting their basic needs like power generation.

The developed countries must not force the developing and poor countries to move to renewable energy based power generation in a short span of time and without providing technological and financial support for the clean technologies. In the absence of coal the only other options with the developing countries are oil/gas-fired power plants or big hydro power plants. Oil and gas prices continue to remain high and not every country is blessed with adequate hydro energy potential to meet a substantial amount of their energy demands.

While the World Bank must ensure a smooth and affordable transition to renewable energy infrastructure in developing countries it must also ensure that its principle of providing financial assistance to boost economic growth in developing and poor countries. The official negotiations over the size and management of the international adaptation fund still have produced any result, in addition, there is no consensus on the issue of technology transfer and intellectual property rights.

Such a recommendation that this time only signals the actual intent of the US policy. The letter seems to be aimed at pressurizing the developing and poor countries to move to cleaner energy sources without considering the fact that these countries do not have access to affordable renewable energy solutions.

via The Times of India

Image Credit: Polyurban (Wikimedia 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.

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Written By

Mridul currently works as Head-News & Data at Climate Connect Limited, a market research and analytics firm in the renewable energy and carbon markets domain. He earned his Master’s in Technology degree from The Energy & Resources Institute in Renewable Energy Engineering and Management. He also has a bachelor’s degree in Environmental Engineering. Mridul has a keen interest in renewable energy sector in India and emerging carbon markets like China and Australia.


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