In April, World Bank president Jim Yong Kim said in a panel discussion in Washington, D.C., “I don’t think it’s fair to tell the people in Kosovo, ‘While the rich countries continue to burn coal, you’re going to have to freeze to death because it’s against our political ideology to support you.’”
Kim added, “I can’t do that."
Kim’s statement puts the World Bank somewhat at odds with itself. The World Bank has been a major proponent of investment in renewable energy. Yet, it says it must choose between a coal-fired plant in Kosovo and people freezing to death.
But based on the solutions available today (some created by the World Bank itself under Dan Kammen), and where the world is heading on CO2 emissions, the choice between development and combating climate change is a false choice.
Here’s the false choice argument.
On the one hand, we are already deeply in the red in terms of greenhouse gas emissions, meaning that even if we could go carbon-free tomorrow, we are still going to subject ourselves to human-induced climate change beyond our goal of a maximum of 2° Celsius temperature rise. As a result, we must curtail any future emissions wherever and whenever possible.
On the other hand, what is one more coal-fired power plant in a nation such as Kosovo where energy shortages impact industry and economic development? This is a bright red line for the World Bank President. Are his previous words about the dangers of climate change sincere or hollow?
Development agencies such as the World Bank have generally argued that their poverty mission includes bringing energy access to those without energy. So despite the World Bank’s support of renewable energy in most cases, every once in a while, a coal plant needed to save those who are freezing trumps the environment.
But they have to dance around the central question: can Kosovo’s energy needs be met without coal?
This is the ultimate question facing not only the World Bank, but also India, China, South Africa, and all others that seek to provide power to the powerless.
It’s now 2013, and we are deploying advanced energy technologies at the billion-dollar scale -- $279 billion alone in 2012. Finance and business model innovation have made this choice of coal or freezing to death (in the Kosovo case) obsolete.
From no-money-down solar to the use of “big data” to reduce electricity theft, entrepreneurs have come up with clever ways to solve real-world problems while accommodating the power structures currently in place.
Those of us in the energy industry need to step in to help the World Bank -- not only with words, but also with action. We can make climate-friendly development a top priority, as it goes hand-in-hand with human needs.
In fact, World Bank President Kim commissioned a report last year that found “the Earth system's responses to climate change appear to be non-linear. […] If we venture far beyond the 2° guardrail, toward the 4° line, the risk of crossing tipping points rises sharply. The only way to avoid this is to break the business-as-usual pattern of production and consumption."
What is important -- and deserves repeating to all agencies involved in international development and the financing of health, education, infrastructure and other drivers of economic growth -- appears in the preface of the report written by Kim himself: "Most importantly, a 4°C world is so different from the current one that it comes with high uncertainty and new risks that threaten our ability to anticipate and plan for future adaptation needs."
So this is the World Bank president’s moment of truth.
Christiana Figueres, the United Nations' top climate change official, said last week the time has come for the World Bank to get out of coal.
Speaking in Washington, D.C. after attending the World Bank spring meetings, Figueres praised Kim for making global warming a top priority. Figueres said that nations, along with the World Bank, no longer need to invest in coal as an energy source.
However, in defiance of international pressure after the Tata Mundra coal project in India and Eskom’s project in South Africa, the World Bank is currently considering an investment in a 600-megawatt coal-fired power plant for Kosovo.
Yet Kosovo does not have a great experience with coal. The country suffers from regular power outages and from the worst coal-driven air pollution in Europe. Investing in coal when European nations are working to clean their energy economies and to set region-wide standards to push out coal would be handing Kosovo a discriminatory, backward-looking investment package.
Instead, this should be an easy decision for investors and the World Bank. The World Bank’s own study found that Kosovo has wind, biomass, solar, hydro, and energy efficiency resources available that are more than sufficient to meet the 600-megawatt supply needs. Further, European investors have already proposed over 200 megawatts of privately funded wind energy investments in Kosovo. This shows that industry is ready to move at the scale needed to put clean energy to work in Kosovo today.
Entrepreneurs have stepped up with solutions -- now we must convince the World Bank to believe its own analysis and deliver the best energy solution to the people of Kosovo. It is high time for the World Bank to take a moral stand and prove to the world that we don’t have to choose between catastrophic climate change and development goals.
Jigar Shah is the author of the upcoming book, Creating Climate Wealth: Unlocking the Impact Economy, and the founder of SunEdison, the world’s leading solar services company.