World Bank calls on countries to take urgent steps to protect 'natural capital'

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8. Another World-Class World Bank Fail

Cost of Kusile power station could soar, warns Greenpeace

South Africa — on the back of a $3,75bn World Bank loan, among others — is building two coal-fired power stations at a cost of R219bn and recommissioning three coal-fired plants to ensure security of supply.

Kusile would be the world’s fourth-dirtiest power station because of its size and geographical location in an area that is already heavily polluted, said Melita Steele, climate campaigner at Greenpeace Africa, at the release in Johannesburg of a report by the activist group titled "True Cost of Coal".

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The World Bank loan includes $350m for renewable energy. South Africa generates less than 1% of its energy from renewable sources.

http://www.businessday.co.za/articles/Content.aspx?id=157244

Banking On Coal

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The bank's recently released draft Energy Strategy, which will guide its energy lending and influence partner institutions for the next seven to 10 years and announces its investment in coal, is very, very bad news. Although the proportion of coal to renewable energy is falling, the shift is too little too late. Back in 2004, the World Bank's Extractive Industries Review recommended that the bank "phase-out support for oil by 2008, and formalize its moratorium on lending for coal projects immediately." That was five years ago. Today, the World Bank strategy notes that "In some countries, electricity from coal is significantly cheaper" and the bank "could use its traditional financing instruments to support client countries to develop new coal power projects under certain conditions." Indeed, the Bank Information Center finds that bank funding for coal has increased almost 200 percent between 2007 and 2009.

But even if it saves costs in the short term, each newly constructed coal plant has a life of about 50 years, during which it will emit carbon; rehabilitation extends the life of the plant by an additional 20. So even as World Bank donor countries are fighting political battles to cut emissions, their dollars are funding new World Bank coal projects that will cancel out any hard-won gains.

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Yet even knowing coal's blemished track record, the bank is not only subsidizing coal projects but doing so to an increasing degree. During the 2008 fiscal year, the World Bank and International Finance Corporation (IFC) increased funding for fossil fuels by 102 percent compared with only 11 percent for what it categorizes as new renewable energy such as solar, wind, biomass, geothermal energy and hydropower projects under 10 megawatts. On average, fossil fuel financing by the bank still accounts for twice as much as all new renewable energy and energy efficiency projects do, combined. Bloomberg News reported that thanks to World Bank financing, India's Tata "ultra mega" power plant will have the dubious distinction of being one of the world's 50 largest greenhouse gas emitters once it begins operation in 2012.

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http://www.foreignpolicy.com/articles/2009/12/09/banking_on_coal

Tata Mundra plant heads for top slot, with pollution catch

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Tata Power did not respond to an email. The IFC did.

"The greenhouse gas emissions per kilowatt hour of energy generated by the plant were estimated at 0.75 tonnes of carbon dioxide per mw hour (750 grams per KWh), which is significantly less than India's national average of 1.25 tonnes carbon dioxide per MWh for coal-based power plants," said an IFC spokesperson.

In short, it's much better than what India has. And it should feel blessed.

"But India's average for CO2 intensity is abysmal and that's not an acceptable standard for justifying IFC's world class power plant investment," said Kendyl Salcito of the CO2 Scorecard initiative.

Even in the US, power plants using supercritical technology were found by CO2Scorecard generating between 0.87 tonnes of CO2 and 1.12 tonne per MWh.

The newest of them, IATAN U-2, averaged 0.91 tonnes for every MW hour of electricity, more than 20% higher than what IFC has promised for Tata Mundra.

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http://www.hindustantimes.com/News-Feed/corporatenews/Tata-Mundra-plant-heads-for-top-slot-with-pollution-catch/Article1-707645.aspx

Yes, let's continue this discussion of the importance of preserving natural capital, while providing billions in funding for coal projects that will dump CO2 into the atmosphere and acid into the ocean for the next 50 years or more.

It's so important, preserving the environment and all that, and our actions show how committed we are! Why, we've hosted conferences and even created whole web pages about sustainable development and putting price tags on natural capital!