Several years ago I edited an article by a guy from the World Bank saying how it was essential to shift investment towards renewable energy. Well I have just come back from a consultation meeting called by the Bank to help them decide their new energy strategy. The same guy was there, heading up the consultation. He spoke of the need to shift investment into renewables, and the difficulties they face. His slide show had plenty of pictures of turbines and solar panels. So far so banal.
The interesting point came when the floor was opened up and questions were asked about the World Bank’s recent investment of $3.75 billion in a massive new coal power station in South Africa (see here). This will produce millions of tonnes of CO2, increase demand for coal (which brings with it mining) and, according to many NGOs and energy companies, do little to alleviate inequality, since the electricity is to be provided cheap to large industrial interests.
The guy from the WB was fairly defensive, but after rattling on about how little power there is in Africa (true, but South Africa is the exception) and saying they took many things into account it came down to this (I am paraphrasing): We looked at how many megawatts we could get for our dollars and coal came out cheapest. Well, if that is the sole criteria for World Bank decisions, why bother with the consultation?
So we now have the ludicrous situation where the donor countries for the Bank are accepting that they will need to provide money for climate change adaptation to the poorest countries, as well as technology and money for mitigation. At the same time, the Bank is providing cheap loans to build hugely destructive infrastructure. So the western taxpayer is being asked to fund the coal power station, and fund the mitigation measures to deal with it. Somewhere in the middle big business makes money. The World Bank says it is powerless to intervene or put green qualifiers on its loans.
The UK is currently the single biggest contributor to the World Bank. While it is admirable the country puts so much money into a development institution, one can’t help but feel that the WB is not fit for purpose. I would propose that the UK, and any other country which was unhappy with the South Africa decision, should consider withdrawing their money from the WB, and using it to form the nucleus of a Green Infrastructure Development Bank.
As an aside, I never fail to be amused by the cheek of some in this business. There was a guy from an oil major who stood up and said that the primary function of the WB in energy should be ensure the functioning of the market. He then went on to say that his company (one of the biggest) needed money to help it develop its carbon capture and storage. Now, you will never hear me say that the job of anyone is to defend the market, but you can’t have it all ways.