In a couple of weeks I’ll be flying into the toxic pea-soup air of Beijing, for our next round of work on “Growing a Green Bonds Market in China”. The health impacts of all those coal-fired power stations around Beijing are leading the central government to close down coal-fired power stations – they’re becoming stranded assets. Yes, Chinese provinces still have 450 coal-fired power plants on the drawing board, but the Chinese now have a cap for growth in coal usage and they did one third of last year’s global renewable energy build.
Asia is where we will win or lose the fight to stop catastrophic climate change.
Right now I'm at the OECD in Paris listening to a speech by an Asian Development Bank (ADB) VP on all their green investments They do wonderful work on funding mitigation (e.g. renewable, energy efficiency) and adaptation (e.g. water) projects around the region - including in China.
But this is the rub: they’ve also been a major funder of coal-fired power plants. Between 1994 and 2012, the ADB invested $3.9 billion in 21 projects. In the past 6 years they have invested $1.69 billion in five coal plants, including $900 million in the Jamshoro plant in Pakistan and $450 million in the Tata Mundra Ultra Mega Coal plant in Gujarat.
This, frankly, is crazy. Especially when you consider that the ADB is also helping fund the Philippines recovery plan from Hurricane Haiyan, the strongest storm ever recorded on land. The incredible ferocity of that storm and others in recent years is linked to the consistent and substantial warming of the ocean to the East of tropical Asia - because of climate change.
As shareholders in the ADB through our governments, we are using our scarce public money to undermine all our own green development work by continuing to lend to coal.
When you ask ADB staff about their coal lending they, rightfully, describe places like rural India where so many people are without power (1.2 billion worldwide) and coal looks cheap. Fair comment … but with awareness of danger comes great responsibility to act. And no one would argue the ADB isn’t aware of the danger of climate change; there are better ways to act than to build coal, even if they might take more work.
Last year the World Bank, the European Investment Bank and the European Bank for Reconstruction and Development all adopted policies restricting financing for coal plants. The ADB has in practice been reducing its coal lending; closing this door publicly, as the other banks have done and tied to a strongly pro-active program to finance clean energy options for those folks in rural India, is absolutely doable.
It's time to do it.
