Our Orwellian Nightmare: Coal's Low Carbon Pitch
This week, I’m happy to introduce Justin Guay of the Sierra Club’s International Climate Program, who is in Cancun at the international climate negotiations, and who draws our attention in this post to a little-known problem that could spur coal development around the world:
In Cancun all eyes are on climate finance and the role it will play in delivering progress on the international stage. Yet lurking beneath the surface lies a fatal incoherency in energy sector lending that has enabled coal to pass itself off as a low carbon option for developing countries.
This is an option that consumes public finance, thus starving renewable energy of much-needed capital while providing a lifeline for a 19th century fuel that sports an outsized carbon footprint, even by fossil fuel standards. The problem is this – the UN is defining some new coal plants as a low carbon energy source, paving the way for the construction of new coal plants around the world, all in the name of clean energy.
Indeed, this Orwellian definition would be laughable if its logical extension didn’t threaten the health and well being of the world’s poor and the planet’s natural systems. The energy intensive infrastructure resulting from the financing of large scale coal plants threatens to lock the world into a reliance on coal, sending us hurdling past planetary tipping points.
The sad irony is that those most threatened by the destruction coal wreaks – the world’s poor – are precisely those in whose name the fuel is financed.
Calling coal “low carbon” is fueled by a fallacy which maintains that one type of coal plant – supercritical plants – burn coal more efficiently than standard plants, thereby reducing emissions from baseline technologies. This lunacy has permeated international financial institutions to such a degree that the United Nations Clean Development Mechanism (CDM) – a mechanism charged with supporting clean energy development for developing countries – recently approved a second coal plant (Tirora India) for carbon credits.
With up to 21 plants lined up to profit from carbon credits, such decisions threaten to flood markets with millions of sub-prime credits, further undermining the legitimacy and viability of international efforts to address climate change.
While it is painful to justify such absurd decisions with logical rebuttals, it bears recognition that supercritical technology is now the baseline technology for most rapidly industrializing countries. This means supercritical technology does not meet the additionality requirement and should therefore be denied carbon credits. In an Orwellian world, however, the real power of using the CDM is not the profits it will provide to polluters, it is the legitimization and rebranding of super critical coal as a low carbon technology.
The Tirora decision, and any that may follow, reinforces the super critical fallacy which has taken hold at a number of International Financial Institutions and Export Credit Agencies (ECAs). A prime example is the United States Export-Import Bank, which claimed that the 4,000-megawatt Sasan and 4,800-megawatt Kusile super critical coal plants met the low carbon requirements of its recently enacted carbon policy. Such decisions are particularly harmful, according to ECA Watch: “ECAs are collectively among the largest sources of public financing for fossil fuel projects in the world today, a sum which is estimated to rival or exceed financing for these activities by all multilateral finance institutions combined.”
At the same time the World Bank, which is angling to become a central player in climate finance, has thus far refused to end lending for destructive coal projects maintaining the fabrication that they provide energy access and development for the poor.
Even its Climate Investment Funds – meant to invest in transformational energy projects – leave room for low carbon technology definitions that include super critical coal plants. A loophole that must be closed as the institution drafts its energy strategy review in the wake of its disastrous Medupi coal plant loan and is pushed by civil society to phase out fossil fuel lending and ensure energy access for the poor.
With both the U.S. Export Import Bank and the World Bank playing prominent roles in climate finance discussions, as well as fast start finance pledges, it is imperative that the world recognize that super critical coal is neither clean nor transformational. Climate finance must live up to its name and reject attempts to rebrand coal as a fuel capable of fueling the future. Only then will we wake up from this Orwellian nightmare to reclaim the low carbon revolution and ensure that it delivers 21st century transformation, instead of destruction dressed up as progress.