World Bank Subsidizes New Coal-fired Power Stations

Despite calling on all countries to “act differently on climate change,” the World Bank is spending billions of dollars subsidizing new coal-fired power stations in developing countries.

The bank’s World Development Report says those are the very countries that will be most affected by global warming: specifically, that between 75 and 80 per cent of the damage caused by climate change through drought and floods will happen in developing countries.

But the bank also says developing countries need to use coal now to bring them out of poverty. More than 1.5 billion people are living without electricity, and the bank asserts that coal is the cheapest way to deliver it to them, according to Marianne Fay, the bank’s chief economist for sustainable development. Other economists dispute that view as the cost of coal-fired plants and coal rise while the cost of wind, solar, energy efficiency and conservation fall. Moreover, the environmental consequences of coal-generated electricity are enormous, according to scientists. 

Fay 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’.”

At the same time, the report says that unless the world acts now to cut carbon dioxide emissions, we face a 5-degree-Celsius rise in global temperatures by the end of this century, the speed and magnitude of which could wipe out more than half of all species and threaten 60 million people.

Tim Jones, policy officer of the World Development Movement, responded, “The World Bank is acting in the interests of Western countries and companies and not in the long-term interests of the world’s poor.”