Rupert Darwall: The World Bank’s Anti-Energy Policy Betrays Its Development Mission
There is a reason why the Climate Industrial Complex is targeting EPA Administrator Scott Pruitt. It recognizes that the return to energy sanity is the Trump administration’s greatest accomplishment. It ended the previous administration’s war on coal. President Trump has freed the United States from the unilateral decarbonization ratchet of the Paris Agreement. Administrator Pruitt is rolling back the Clean Power Plan. That explains the motive behind the coordinated attempt to force Pruitt out. In responding to this attack, the administration would do well to take a leaf out of the environmental establishment’s playbook. Just 500 yards from the White House, Obama-era energy policies reign supreme at the World Bank. Its president, Dr. Jim Yong Kim, is an Obama appointee. The bank uses American taxpayers’ money to wage war on American coal and has become a willing tool of European Union climate policy, foisting its anti-hydrocarbon and pro-renewable agenda on the world’s most vulnerable countries. One year after Dr. Kim was appointed, the World Bank adopted a blanket ban on financing new coal-fired power stations. For many developing nations, coal is the cheapest and most reliable generating capacity. Last December, the bank announced it was extending the ban to the financing of oil and gas exploration, which will deny poor countries the ability to develop their natural resources. Europe has Dr. Kim and the World Bank in its pocket, with American taxpayers writing the checks. The World Bank, conceived as the world’s premier development bank, has turned itself into a progressive think tank with a $406 billion balance sheet. In the name of saving the planet from global warming, the World Bank has adopted anti-development energy policies that betray its core mission. The problem of the poor is that they consume very little energy. As the World Bank recognized before its complete capitulation to green ideology, the incremental greenhouse gas emissions from extending energy access to the world’s poor will not make a “material difference” to global greenhouse gas emissions. Of world electricity production in 2014, only 19 percent was consumed in the Asia-Pacific region excluding China, and only 3 percent in Africa. The bulk of this was generated from coal and gas, with wind and solar making negligible contributions (less than 1 percent in Africa). Even so, annual consumption of coal in many of these countries is miniscule and can be measured in pounds of coal per person and, in the case of Bangladesh, ounces. Their problem is they consume too little coal, not too much, and wind and solar are never going to make up the shortfall. According to the UN, it would cost only $50 billion a year to provide the world with universal energy access. But it would cost ten times that with renewable energy and another $500 billion for energy efficiency schemes. The staggering scaling up of investment flows for a world of renewables simply isn’t going to happen. So that means that the World Bank’s decision to back wind and solar capacity and ban investment in new coal is an abandonment of the goal of providing electricity to the 1.2 billion people who currently don’t have it. Even if the investment in renewables were forthcoming (and again, it isn’t), it would still be bad for the world’s poor. Already in the developed world, the countries and states with the biggest commitment to renewables – notably California, Germany, Denmark and South Australia – have some of the world’s most expensive electricity, and none of them have solved the curse of intermittency inherent in weather-dependent generation. Last year at Davos, a priceless confrontation between former Vice President Al Gore and Bangladeshi Prime Minister Sheikh Hasina highlighted the contradiction between the dictates of Western environmentalism and poor countries’ development aspirations. Bangladesh had the fastest deployment of solar panels anywhere in the world – two per minute, night and day, Gore said, before noting with disgust that now Bangladesh wants to build a new coal fired power station to provide low cost, on-demand power that solar cannot. Responding to Gore’s attempt at green-shaming her, Sheikh Hasina pointed out that the plant will use the latest clean-burning coal technology. “We have to think about human beings,” she said, putting Gore out of sorts. “We have to provide energy to our people. We have to develop our country.”’ Of all the World Bank’s donor countries, America’s interests are most aligned with those countries wanting to develop faster, whereas the World Bank’s pro-renewable policies most benefit China, a country with less than one third the World Bank voting rights of the US. Of those solar panels crowding up the scene every two minutes in Bangladesh, you can be sure that not one produces any power after nightfall and that the vast majority were made in China. So in addition to waging war on American coal, the World Bank is using American taxpayers’ money to finance energy infrastructure that retards development and makes poor people poorer. Full post
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