World Bank backs massive India coal plant, calls it "clean development"
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The World Bank has seized upon the immense challenges climate change poses to humanity and is now front and center in the complicated, international world of carbon finance. It can turn the dirtiest carbon credits into gold.Skip to next paragraph
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How exactly, does this work, you ask?
Quite simply: The Bank finances a fossil fuel project, involving oil, natural gas, or coal, in Poor Country A. Rich Country B asks the Bank to help arrange carbon credits so Country B can tell its carbon counters it’s taking serious action on climate change. The World Bank kindly obliges, offering carbon credits for a price far lower than Country B would have to pay if Country B made those cuts at home. Country A gets a share of the cash to invest in equipment to make fossil fuel project slightly more efficient, the World Bank takes its 13% cut, and everyone is happy.
Everyone, that is, who is cashing in on this deal. If you’re after a real solution to the climate crisis, these shenanigans can and should make you unhappy.
But despite the dubious environmental benefits of the Mega Ultra, the fact remains that India desperately needs reliable power. It's very easy for someone like me, sitting in a well-lit Boston office (okay, cubicle), to gloss over what it's like to live with sporadic power. According to the Mega Ultra's project description, the states that the plant would serve currently face energy shortages ranging from 7 percent to 19 percent and peak power shortages ranging from 10 percent to 30 percent. And more than half of India's rural households have no electricity. If India is ever going to lift its population out of poverty, it needs electricity.
But there could be a better option. An analysis by David Wheeler, a former World Bank economist, shows that the Mundra region is a great candidate for thermal solar power because it's sparsely settled and gets a lot of sun. The cost of solar power, he says, would cost 8.23 cents per kilowatt-hour, versus 7.65 cents for Mega Ultra's coal. He shows that the remaining cost gap could be completely covered by financing from international clean technology funds, that is, true carbon offsets. If Mundra went solar, Wheeler argues, the project would improve the World Bank's image and help advance technology in renewable energy. Not to mention keeping Gujarat's skies free of mercury and toxic particulates.
But the check has already been signed for the Ultra Mega, so it would take tremendous public pressure to keep it from going online. Given India' acute need for electricity, those opposing the plant will need to work hard to reframe the debate away from one the environment versus prosperity.