The World Bank responds to Greenpeace

Friday, December 11, 2009 - 6:23 PM Share

Jamal Saghir, the director of the energy, transport, and water programs at the World Bank responds to a Foreign Policy article by Phil Radford, the executive director of Greenpeace USA.

Mr. Radford's recent column "Banking on Coal" provides a highly misleading and inaccurate picture of the World Bank Group's efforts to help countries fight poverty and develop energy sustainably.

He asserts that the World Bank Group is funding coal projects to the detriment of renewable energy (RE). Wrong. Our RE and energy efficiency (EE) financing levels are at historic highs -- over 40 percent of total fiscal year 2009 energy financing.

He says the Bank has been increasingly subsidizing coal projects. Wrong. Our fossil fuel share of financing has been declining for years, and two thirds of our fossil fuel financing is for natural gas, the cleanest fuel for base-load supply. Mr. Radford cites 2008 as a big year for coal financing, but neglects to mention that in fiscal year 2009 our coal financing then dropped 62 percent. Mr. Radford says that Bank fossil fuel financing is twice what we finance in RE/EE projects. Wrong again. In fiscal year 2009 we financed more RE/EE projects (over 40 percent) than fossil fuels (about 32 percent).

Over the last six years, coal represented 7.5 percent of all World Bank Group financing for energy. In some years it was as low as one or two percent. And fully a third of the spending on coal is to clean up inefficient, polluting old plants, something that surely Greenpeace would not want us to stop.

Mr. Radford criticizes the Bank's recently released draft energy strategy. We haven't issued a draft strategy. What we are doing is consulting in an open way with key stakeholders, including civil society organizations, whose input will help us to write a draft strategy next year.

Mr. Radford's criticisms lack context. He says that the Bank-financed projects are a significant source of the world's greenhouse gas emissions. Wrong. Our projects are a minuscule fraction of the global footprint. The new proposed South African project he criticized will use the cleanest super-critical technology and has $750 million in financing for renewable energy and low carbon energy efficiency components that otherwise would not be part of the project.

We're proud to be a leader in advancing environmental financing innovation, such as the Climate Investment Funds ($6.3 billion pledged with $3.2 billion in investment plans already endorsed to support more than $30.5 billion in clean technology projects), the Forest Carbon Partnership Facility, climate risk management products, and "Green Bonds."

The bottom line is that for our 186 member countries, our primary focus is fighting poverty. There are 1.6 billion people living today without access to electricity. Under very limited, case-by-case situations with strict criteria, and when alternative lower-carbon technologies are not immediately available, we will support least cost, carbon-based energy solutions. And we will do this as an interim measure while we continue to help a country prepare for a cleaner energy development path in the medium term.

The Indian plant he references will have lower emissions than the average for OECD countries (2005). Turning away from South African or Indian aspirations for affordable energy means turning away from energy for schools and hospitals and homes in those countries. It's particularly ironic for Mr. Radford in the United States to criticize our very modest portfolio when half of U.S. electricity comes from coal. While the World Bank Group is working to support low carbon paths, Mr. Radford advocates a double standard that will help ensure poor countries will not cooperate in addressing global climate change.

The World Bank Group is committed to fighting poverty and supporting economic growth and opportunity in a sustainable manner. Our increased lending for renewable energy and energy efficiency and our innovative financing demonstrates that we are serious about it.

See the World Bank's climate site here.

John Moore/Getty Images

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ASH-S

6:11 AM ET

December 15, 2009

Does the Bank really need to distort what the article says?

It's a bit worrying if the best defence the Bank can manage is to misrepresent what the original author says to try to make itself look better.

Saghir makes two valid points: one is that there are sometimes decisions to be made as to the balance between poverty reduction through access to electricity and environmental concerns. The other is that their funding can pay for cleaner technology where plants will be built anyway. However rather than using those as a basis for a reasoned defence of the policy, he quickly descends to dissembling and deliberately not addressing the points.

Let's take the WB reply point by point:

1. "He asserts that the World Bank Group is funding coal projects to the detriment of renewable energy (RE). Wrong. Our RE and energy efficiency (EE) financing levels are at historic highs"

Wrong. That this funding is at historic highs is irrelevant to the point that the Bank is funding coal projects. And money towards coal projects is money that is not going towards RE and EE.

2. “He says the Bank has been increasingly subsidizing coal projects. Wrong. Our fossil fuel share of financing has been declining for years, and two thirds of our fossil fuel financing is for natural gas, the cleanest fuel for base-load supply. Mr. Radford cites 2008 as a big year for coal financing, but neglects to mention that in fiscal year 2009 our coal financing then dropped 62 percent.”

Sorry but this is deliberately misleading on Saghir's part. He correctly points out that FY08 was a big year and then FY09 coal financing dropped 62%. But that was from the huge amount spent in 08 – FY09 funding was still 90% higher than FY06 and 61% higher than FY07, with an overall clearly increasing trend. Overall fossil fuel funding also showed an overall increasing trend over the last 4 years – while Saghir mentions the share of financing, this is clearly less relevant than the absolute values for this discussion.

3. “fully a third of the spending on coal is to clean up inefficient, polluting old plants, something that surely Greenpeace would not want us to stop”

Meaning that two thirds is for construction of new facilities, something that almost everyone would question much more and that was kind of the point of the article, no?

4. “He says that the Bank-financed projects are a significant source of the world's greenhouse gas emissions. Wrong. Our projects are a minuscule fraction of the global footprint.”

Oh come on, we know the Bank is not so large it is going to fund a significant percentage of the world’s overall emissions, but Radford clearly is pointing out that emissions financed by the Bank have a significance beyond their values. Also this is additional emissions rather than from existing sources. And you don’t even try to challenge that the India project will be one of the 50 largest single greenhouse gas emitters apart from that it will have “lower than OECD average” emissions based on a 2005 standard, hardly a high bar to set when most of these plants were decades old and emissions were not a major issue.

Come on World Bank, can you really not justify yourselves better than that? There's a real discussion to be had on some of these issues, but it seems to be one you don't want to address through that "consulting in an open way" that you mention.

DENEME456

2:34 AM ET

December 19, 2009

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