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dam-l WBank urged to "green" energy loans/LS
Apologies for cross listings***
>>
>>Andrea Durbin
>>Director, International Program
>>Friends of the Earth - United States
>>1025 Vermont Avenue, NW 3rd Floor
>>Washington, DC 20005
>>telephone: 202-783-7400, ext 209
>>fax: 202-783-0444
>>
>>>Copyright 1999, Inter Press Service
>>> ENVIRONMENT: World Bank Urged to Boost 'Green' Energy
>>> By Abid Aslam
>>>WASHINGTON, Feb 3 (IPS) - Power companies and environmental groups
>>>are joining forces in urging the World Bank to overhaul its
>>>agreements to lend money for energy projects in the developing
>>>world. <P>
>>> In an open letter to the Bank, multinational corporations and
>>>non-governmental organisations (NGOs) have asked the global
>>>lender to boost support for renewable energy development in poor
>>>countries and to drop plans for a controversial pollution-swapping
>>>fund. <P>
>>> ''We are united in our belief that clean energy technologies
>>>provide solutions to environmental problems while fueling economic
>>>development in Bank client countries,'' says the letter, released
>>>Tuesday. <P>
>>> For the past month, the World Bank has been seeking public
>>>comment on its energy lending strategy. The business-NGO coalition
>>>wants the Bank to earmark 20 percent of its total energy lending
>>>for renewable technologies - including wind, solar and geothermal
>>>power, which harnesses heat energy from Earth's crust. <P>
>>> ''This mandate is clear and enforceable, and it demonstrates the
>>>type of leadership that will make the Bank's sustainable energy
>>>proposals a reality,'' they argue. <P>
>>> Some Bank staffers support the 20-percent goal and, in fact,
>>>first suggested it in 1997. But the idea was dropped last year
>>>amid internal squabbles. ''Let's face it, there are varying
>>>viewpoints on the (Bank's executive) board and within Bank
>>>management,'' says Charles Feinstein, chief of the agency's
>>>Global Climate Change Unit. <P>
>>> Eight percent of the Bank's total energy portfolio is allocated
>>>to renewable technologies, according to Feinstein. The agency is
>>>embarking on ''business planning and forecasting exercises'' to
>>>determine achievable targets, he says. ''There's no sense in
>>>promising things that can't be delivered.'' <P>
>>> At issue is how the largest public financier of power projects
>>>in the developing world can help meet the needs of the two billion
>>>poor people in the world's rural areas, who have no electricity,
>>>without contributing further to climate change. <P>
>>> Most scientists assert that, in particular, global warming
>>>threatens vast portions of the world with extremes of drought and
>>>flooding. In some scenarios, entire island nations such as the
>>>Maldives could be lost to rising seas as Earth's polar ice caps
>>>melt. <P>
>>> Reformists at the Bank fret about the likely consequences for
>>>poor countries and favour increased energy efficiency and greater
>>>use of renewable technologies. But they are hindered by the
>>>lending agency's stated mission of economic development,
>>>according to Daphne Wysham, research fellow at the Washington-
>>>based Institute for Policy Studies. <P>
>>> ''Energy consumption is a key indicator of a nation's economic
>>>growth, so it is no surprise that roughly one-fifth of the World
>>>Bank's lending goes toward increasing energy and power supply in
>>>poor nations,'' she explains. <P>
>>> In the absence of clear targets for cleaning up the Bank's
>>>energy lending portfolio, it remains ''strongly biased in favour
>>>of the more polluting, fossil fuel energy projects which
>>>contribute to global warming,'' says Andrea Durbin, international
>>>programme director at Friends of the Earth. <P>
>>> Since the 1992 Earth Summit alone, the Bank has approved fossil-
>>>fuel projects which will burn enough oil, coal and gas to add 1.3
>>>times more carbon dioxide to the atmosphere than was emitted by
>>>all countries in 1995, Wysham notes. Carbon dioxide is a prime
>>>culprit in climate change. <P>
>>> ''It is these emissions from which the Bank now hopes to
>>>profit,'' she says. Under a 'Prototype Carbon Fund' now being
>>>developed, the lending agency ''plans to enter the market in
>>>pollution credits - estimated to reach 150 billion dollars by 2020 -
>>>and skim five percent from each trade it brokers.'' <P>
>>> According to Bank documents, 60 percent of the agency's take
>>>would be ''profit above administration costs.'' <P>
>>> The letter from the business-NGO coalition calls on the Bank to
>>>halt these plans, which critics say will exacerbate climate
>>>problems by allowing dirty nations and corporations to skirt
>>>emissions-reduction targets agreed under the Climate Change
>>>Convention. <P>
>>> Under emissions trading, industrial companies and countries
>>>could buy cheap carbon 'credits' from low-level polluters by, for
>>>example, building new, more efficient coal-fired power plants in
>>>developing countries. They would then take credit for the
>>>resulting efficiency and convert this into a 'right' to keep
>>>polluting at home. <P>
>>> According to the Bank, this eventually would yield reduced
>>>carbon emissions while boosting power generation. <P>
>>> The U.S. Treasury Department, however, notes in a document
>>>leaked during last November's climate change conference in Buenos
>>>Aires, Argentina, that: ''The Bank has a credibility problem,
>>>having long supported fossil-fuels development.'' <P>
>>> Compounding the Bank's credibility problem is the secrecy with
>>>which it has pursued its emissions trading ambitions, say the
>>>companies and environmental groups. <P>
>>> ''There has been a relative lack of information flow,''
>>>Feinstein acknowledges. ''But this is not because of
>>>deviousness.'' Rather, the Bank has been seeking guidance from
>>>its lawyers and the U.S. Securities and Exchange Commission on how
>>>to talk up the fund without violating securities laws or
>>>appearing to solicit investors, he says. <P>
>>> Bank staff can now begin ''outreach'' activities this month,
>>>starting with talks involving officials, NGOs, and private market
>>>players in the Nordic countries, Feinstein says. <P>
>>> Bank staff also will draft a new environmental strategy
>>>document for the energy sector which should be ready by mid-March.
>>>Agency higher-ups have yet to decide whether to release it to the
>>>public. <P>
>>> Among the 26 institutions signing on to this week's open letter
>>>are the NGOs Friends of the Earth and the US-based Union of
>>>Concerned Scientists. <P>
>>> Business groups include the U.S. Business Council for Sustainable
>>>Energy, whose members include the multinational Enron Corporation
>>>and American Gas Association, and the European Business Council
>>>for a Sustainable Energy Future, which counts Cogen Europe and
>>>numerous industry associations among its flock. (END/IPS/aa/mk/99)
>>>
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