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Monday, February 24, 2020
WASHINGTON, Jun 6 2008 (IPS) - "Climate Investment Funds" to be run by the World Bank and backed by the George W. Bush administration are drawing fire from lawmakers and environmentalists who say the initiatives will accomplish little against global warming.
Critics question whether the funds – including a planned 10-billion-dollar Clean Technology Fund – set out a clear way to reduce pollution, whether they provide the right type of financing for poorer countries, and whether the World Bank is the right choice to run them.
"The Clean Technology Fund has no definition of clean technology," said Kenny Bruno, international programme director at the lobby group Oil Change International.
Bruno's is one of 121 organisations from 40 countries that on Thursday delivered a joint petition asking developing countries to reject the funds at talks this week in Bonn, the German capital.
In their view, the technology fund leaves open loopholes through which environmentally questionable energy initiatives could be financed.
"What they are really proposing is a slightly less dirty technology fund which will include financing of coal plants that are somewhat less polluting than the dirtiest plants out there," Bruno said.
Proponents of the upgraded coal-burning technology say it qualifies as a "clean technology" because it produces sufficiently lower levels of climate-distorting pollutants than do conventional coal-fired power plants. Opponents disagree, adding that the new technology does nothing to minimise the environmental damage wrought by coal mining in the first place.
For many environmentalists, only renewable energy – power drawn from the wind, sun, tides, or heat from below Earth's surface – should qualify as clean technology. Any burning of fossil fuels such as oil or coal, they say, will contribute in some way to climate change because of the release of carbon dioxide or other greenhouse gases.
"Clean coal is a false solution," said Janneke Bruil of Friends of the Earth International. "It has nothing to do with renewable energy."
The bank has not been alone in defending clean coal projects. The U.N.-led Kyoto Protocol on climate change also endorses such efforts as helping to shift energy production from highly polluting power plants to cleaner and more efficient ones.
Also at issue is the type of financing to be provided.
The clean technology initiative is aimed at helping developing countries to pay for newer, cleaner, but more costly energy and industrial technology, and thereby to help wean them off dirtier but cheaper equipment. The Strategic Climate Fund, a second multi-billion-dollar endowment, would seek to help poorer countries to cope with floods, storms, and other increasingly common and severe symptoms of climate change. Plans for the funds envision a mix of loans, grants, credit guarantees, and equity investments.
Lobby groups warned that because some of the money would come in the form of loans instead of grants, the climate funds would saddle these countries with new debts.
"The bank's plans are unfair and unethical," said Janet Redman of the Washington-based Sustainable Energy and Economy Network. "The loans would further indebt poor countries as they adapt to climate changes caused mainly by the countries providing the loans."
Britain and Japan have committed undisclosed amounts to the technology fund and Arab Gulf states and others also have pledged support, David McCormick, the U.S. Treasury undersecretary for international affairs, told a Congressional committee Thursday.
The Bush administration is asking Congress to free up two billion dollars over the next three years for the technology fund, which it hopes to launch in coming months.
"We are aiming, along with our donor partners in the G8 and beyond, at a global effort of up to 10 billion dollars over the next three years with the U.S. as the lead donor," McCormick said in prepared testimony before a U.S. House of Representatives panel on monetary policy, trade, and technology. He referred to the Group of Eight major economies, finance ministers of which are expected to discuss the funds at their Jun. 13-14 talks in Osaka, Japan.
Lawmakers, however, assailed the choice of the bank to administer the funds.
"The World Bank has not compiled a record that most environmentalists approve of in its general operation," said Barney Frank, the Democrat who chairs the House of Representatives financial services committee. "It's like they do their environmental work one day a month and then they undo it."
Frank echoed environmentalists' complaint that the bank had spent much of its 60-plus years backing projects that caused pollution and just this year financed the construction of clean-coal power plants in India.
Green groups, in their appeal to developing countries, said responsibility for the climate investment funds ought to be placed not with the World Bank but with the U.N. Framework Convention on Climate Change.
According to the bank, the additional cost of deploying clean energy technologies for power generation in developing countries could reach 30 billion dollars a year.
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