UK's 'green' aid to be spent on building new coal power stations in developing world

The World Development Movement slammed a UK government plan to put almost £400 million of 'green' aid designed to assist developing countries low carbon development into a World Bank fund that will subsidise new dirty coal power plants.

The £400 million represents almost half of the UK’s Environmental Transformation Fund – Gordon Brown’s flagship £800 million fund to assist developing countries to deal with the impacts of climate change and develop low carbon economies.

Benedict Southworth, director of the World Development Movement said:

"This UK government money is supposedly specifically designed to help developing countries make the transition to low carbon economies. It's an absolute disgrace that it will actually be used for building new coal power stations. This money will actually contribute significantly to climate change, rather than do anything to prevent it. This is embarrassing for the UK government; but is incredibly worrying news for the world's poorest people who will be hit hardest by climate change. They expect the UK to play a leading role in the fight against climate change both at home and through its funding.

"Every pound of this 'green' aid that will be spent on funding coal power through the World Bank is money should be spent on supporting genuinely clean technology, such as renewable energy in developing countries. It's another reminder, if one were needed, that the World Bank is institutionally incapable of considering the needs of the world’s poorest people in its decision-making, or of delivering the finance that is needed to deliver climate justice to developing countries.".

The UK money will be ploughed into the World Bank's Clean Technology Fund (CTF) which will fund the building of new supercritical coal power plants, which are already the first choice for new power plants around the world. Furthermore, the CTF specifically will not fund carbon capture and storage technology.

Coal power stations in the UK, such as Kingsnorth in Kent, are scheduled to shut down by 2015 due to European law on local pollution levels. Coal power stations in developing countries will tend not to have the same restrictions. This is likely to result in the building of new coal power stations in the developing world that emit levels of pollution into the local environment that have health impacts that are unacceptable in Europe.

Ricardo Navarro, a climate change campaigner from Central America said:

"If you look at the history of the World Bank, you will see that they have been at the centre of many problems in Central America. The World Bank has a history of funding projects that cause climate change and so this is nothing new. The UK should not give this World Bank fund a pound, I would rather that the UK government bought flowers for every household in the UK than spend this money on a World Bank coal fund. The UK should abandon this plan and make sure that the money goes to fund renewable energy, not new coal."

The World Development Movement is calling for the UK government to:

• Withhold the money for tackling climate change from the World Bank
• Work with developing countries in the international negotiations to agree in Copenhagen at the end of 2009 a new fund within the United Nations Framework Convention on Climate Change to support cuts in emissions and low carbon development in developing countries
• Find alternative ways for getting clean technology money actually spent on clean technology
• Support a UN-led process to review and fundamentally reform the World Bank’s governance, mandate, policy role and financing.

ENDS

Notes to editors

Problems with supercritical coal:

• Supercritical coal has extremely high emissions. It is slightly more efficient than old subcritical coal power plants, but far more emitting than oil and gas power stations, and genuinely ‘clean’ technologies such as solar and wind.
• The World Bank says that the typical emission factor for the typical supercritical plant is 0.80 t CO2/MWh (net); and that these plants have: “become the system of choice for new commercial coal-fired plants in many countries”.[1] 0.8 tonnes of CO2 per MWh is only slightly higher than the Clean Technology Funds’ criteria of being 0.795 tonnes of CO2 per MWh. The CTF says it will fund “transformational” technology and this is clearly not transformational.
• The World Bank allows for the criteria to be higher than 0.795 tonnes of CO2 per MWh based on country specific and site specific conditions. These conditions are not specified, so the Clean Technology Fund could fund even more highly polluting coal power plants.

Detail

There are two funds within the Climate Investment Funds – the Clean Technology Fund and the Strategic Climate Fund (adaptation and deforestation).[2]

The Clean Technology Fund is part of the World Bank’s Climate Investment Funds.

The UK pledged £800 million to the CIF in September 2008. Ten donors in total pledged US$6.1 billion.[3] The CTF will use grants and concessional loans, and will seek to leverage in investment from the private sector.[4] The CTF and SCF have yet to receive any of the money pledged.[5]

The UK has indicated that it intends to put £383 million of the £800 million into the CTF over three years (see Table below). This will all come from the Environmental Transformation Fund.

The World Bank CTF board meeting on 30 January 2009 considered a document stating that the criteria for a ‘high efficiency’ coal power plant for the CTF to fund would be:

“Carbon intensity of the power plant must be lower than 0.795 t CO2/MWh (net) based on a reference plant with defined site ambient conditions and coal type, as outlined in Annex 1.”[6]

“For each specific proposal for CTF co-financing, the 0.795 t CO2/MWh (net) threshold will be adjusted to reflect the fact that efficiency and emissions are affected by the following country and site-specific factors:”[7]

CCS has been viewed as not qualifying for CTF financing as it is “at the research and development stage”.[8] Plants will need to be “CCS ready” which is defined as a) having enough space, b) having a storage site identified and c) an economic analysis of what future CCS options may be.[9]

The co-Chairs of the meeting were Raul Delgado from Mexico and Andrew Steer from the UK.

The governments on the CTF board are: Australia, Brazil, China, Egypt, France, Germany, India, Japan, Mexico, Morocco, South Africa, Spain, Sweden, Turkey, UK, US. (Seven donors and seven developing countries).

• [1] CTF. (2009). Clean Technology Fund Criteria For Financing Low-Carbon Opportunities In Coal And Gas Power Investments. Meeting of the CTF Trust Fund Committee. Washington, D.C. January 29-30, 2009
• [2] http://www.defra.gov.uk/environment/climatechange/internat/devcountry/funding.htm Viewed on 09/02/09.
• [3] World Bank. (2008). Donor Nations Pledge Over $6.1 billion to Climate Investment Funds. World Bank. Washington DC. 26/09/08.
• [4] World Bank. (2008). The Clean Technology Fund. World Bank. Washington DC. 09/06/08.
• [5] CIF. (2009). Climate Investment Funds: Financial status as of 26 January 2009. World Bank. Washington DC.
• [6] CTF. (2009). Clean Technology Fund Criteria For Financing Low-Carbon Opportunities In Coal And Gas Power Investments. Meeting of the CTF Trust Fund Committee. Washington, D.C. January 29-30, 2009
• [7] CTF. (2009). Clean Technology Fund Criteria For Financing Low-Carbon Opportunities In Coal And Gas Power Investments. Meeting of the CTF Trust Fund Committee. Washington, D.C. January 29-30, 2009
• [8] CTF. (2009). Clean Technology Fund Criteria For Financing Low-Carbon Opportunities In Coal And Gas Power Investments. Meeting of the CTF Trust Fund Committee. Washington, D.C. January 29-30, 2009
• [9] CTF. (2009). Clean Technology Fund Criteria For Financing Low-Carbon Opportunities In Coal And Gas Power Investments. Meeting of the CTF Trust Fund Committee. Washington, D.C. January 29-30, 2009

Kate Blagojevic
Press officer, World Development Movement
0207 820 4900/4913, 07711 875 345, Email: kate.blagojevic@wdm.org.uk