It’s getting harder and harder to find financing for new coal plants. In his much-talked-about climate change speech last month, President Obama outlined, among other things, a plan to phase out US government financing of new coal plants abroad in cases where there are “economically feasible alternatives.” The World Bank has followed suit, announcing similar intentions yesterday to limit its coal financing to countries with “no feasible alternatives.”The World Bank has been hesitant to restrict funding of such plants in the past because coal remains the cheapest option in many developing countries, notwithstanding its outsized carbon emissions and contributions to local air pollution. Reuters reports:
The World Bank argues funding coal-fired power plants is sometimes necessary to bring energy to the world’s poorest nations and to help them eradicate poverty.Analysts say coal is often the cheapest energy source in places like Kosovo, where the World Bank is mulling whether to support the country’s plans for a coal-fired power plant.
The impact of this decision will hinge on how the World Bank defines “feasible” in the phrase “no feasible alternatives.” Many countries lack the luxury of dabbling in nascent renewable energy sources, or lack the access to prodigious reserves of cleaner-burning shale gas. The World Bank seems to be aware of this, but the devil will be in the details.Aside from its copious carbon emissions, coal burns dirty, affecting the health of the communities it powers. China’s urbanites know this well, and Indian citizens are coming to terms with this too. Coal may be cheap to burn, but it carries plenty of other costs. We’re not sorry to see its financing starting to dry up in cases where alternatives are readily available.[A bulldozer moves coal at Foresight Energy LLC’s Shay coal mine in Carlinville, Illinois, U.S. Photo courtesy of Getty Images]