Record coal spending not the answer

What’s more important: fighting poverty or developing clean, renewable energy sources over fossil-fuel power that’s known to degrade the environment, contribute to health problems for the world’s poor and accelerate climate change?

On a planet in which nearly 1.1 billion people live on a dollar or less per day and 3 billion still use wood, dung or coal for cooking and heating, that’s not a glib or easy question. Given those figures, it’s tempting to say the top priority is to get the world’s poorest people access to electricity as quickly as possible so they can light their homes at night, reduce the indoor air pollution estimated to kill 1.5 million a year and start moving up the economic ladder.

But doing that with fossil-fuel-based power is a double-edged sword. A growing number of very serious people — including the US and German military — are considering the possibility that global oil production has already, or will very soon, peak. And coal, the fossil fuel that still powers most of the world, might be following in petroleum’s footsteps. (One recent study concludes global coal production will peak next year and then begin declining.)

Furthermore, while it might still be a relatively cheap form of energy, coal use also creates health risks. A report this month from the Clean Air Task Force finds that particulate pollution from coal-fired power plants will be responsible for more than 13,000 premature deaths (pdf) this year in the US alone.

Finally, of course, there’s the fossil fuel contribution to climate change, which is expected to hit the world’s poor the hardest.

So what’s to be made of the fact that the World Bank this year invested a record $4.4 billion in coal-fired power projects around the world? That’s 37 times as much as it spent on coal projects in 2006. Does that translate to a 37-fold improvement in electricity access for the world’s poor over the past five years? Or should it be viewed as a potential 37-fold worsening of the planet’s environmental problems … which, after all, also affects the poor the most?

Sadly, the conclusion has to be that the World Bank’s investment strategy reflects small and short-term thinking, even if the coal-fired projects take many years to complete. It’s an unfortunate, business-as-usual strategy for an organisation that understands the benefits of cleaner energy sources such as solar thermal, but continues to give those short shrift compared to big-money coal. Clearly, the World Bank’s own experience demonstrates it’s possible to both fight poverty and develop renewable energy. It needs to start doing more of that.