YOKOHAMA, JAPAN—More than 5,000 people participated in ADB’s 50th Annual Meeting of the Board of Governors held on May 4-7, 2017. One of the key agenda discussed was ADB’s decarbonization efforts in response to the challenges posed by climate change.
ADB has projected that electricity demand in Asia and the Pacific will more than double between 2010 and 2035, reaching some 16,169 terawatt-hours in 2035—that is equivalent to half of the world’s energy consumption by the same year.
By then, Asia will also be responsible for almost half of global carbon emissions, 35% higher than current emissions.
ADB is known to be a major funder of coal-fired power plants globally. Between 1994 and 2012, the institution was the third largest public international financier of coal-fired power plants, investing $3.9 billion in 21 projects. This data is based on the Global Coal Risk Assessment conducted by the World Resources Institution.
Over the past decade, the institution invested $1.69 billion in different coal projects. These include the controversial 4,000-megawatt Tata Mundra Ultra Mega Coal plant in the Indian state of Gujarat and the Jamshoro coal-fired power plant project in Pakistan.
Is ADB consistent with its energy policy?
It became a heated argument between representatives from the Asian Development Bank (ADB) and NGOs, as the latter began to question the former’s continued investments in coal projects despite its commitment to clean energy.
Atty. Jose Aaron Pedrosa, Secretary General of SANLAKAS, argued that because of continued investment by banks such as ADB in coal projects, Southeast Asian countries are expected to increase their greenhouse gas emissions as their dependence on fossil fuels increased from 1.2 Gigatons (Gt) of carbon dioxide (C02) in 2013 to almost 2.4 Gt in 2014. This amount is equivalent to the current C02 emissions of Japan.
He also presented how these investments are negatively affecting the health of residents living near the coal plants.
“Communities continue to suffer [due to] exposure to coal dust…so this is ADB’s definition of clean energy,” quipped Pedrosa. He further argued that despite its energy policy, ADB continues to promote and support coal projects, which essentially undermines the global campaign to break free from fossil fuels.
“Thus, renewable energy, even though it is mentioned in the energy policy of the Bank, remains a hollow commitment with finance still being made available to coal projects. [We] challenge ADB’s portfolio on continued reliance to coal despite its so-called commitment. Otherwise, this all boils down to propaganda,” the lawyer added.
It is not only Pedrosa who share the same sentiments on ADB’s decarbonization efforts. Hemantha Withanage, Executive Director of the Centre for Environmental Justice, called on ADB to stop funding any future coal mine or coal-fired power station projects.
He said that there is a need for the Bank to prioritize the development and establishment of sustainable renewable energy projects and promote community energy and energy efficiency. He also suggested that ADB should use its profile to lobby other finance institutions in the Asia Pacific region to rule out funding dirty energy projects.
Asia’s remaining carbon budget to limit global temperature increase to 1.5 degrees Celsius is only about 630 Gt C02. According to the International Energy Agency (IEA), India and China can emit some 108 Gt C02 by 2050.
Considering the current coal projects being constructed, these two countries will reach up to 169 Gt C02—an overshoot of more than 50%. Withanage warned that if all planned thermal coal power stations go ahead, this figure can even reach to almost 200 Gt C02 by 2050.
For Yongping Zhai, Technical Advisor for Energy in ADB’s Sustainable Development and Climate Change Department, “ADB’s role is to support developing countries in meeting their energy access goal and also their NDC (Nationally Determined Contribution) for their greenhouse reduction goal.”
Despite pressure from NGOs, however, the Bank cannot stop financing coal projects right away.
“We do not, right now, rule out financing coal because there are some exceptional cases where people would like to use [energy from coal] to meet their basic needs like heating. In some places, [we] don’t have other solution, so we don’t want to leave out that option for our developing member countries,” Zhai explained.
In the Paris Agreement, world leaders agreed to limit the global temperature increase to only 1.5 degrees Celsius. Continued investments in dirty energy like coal can make us breaching this mark even faster than we think—and that translates to even uglier consequences for mankind.
Meeting our growing energy needs is undoubtedly one of the most significant challenges of our time. But this doesn’t mean we have to put the planet at stake. The question we have to answer is not just a mere issue of energy security but rather energy security in a climate crisis era.