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KYOTO,
Japan—The
Asian Development Bank (ADB) will continue funding coal
projects for lack of an energy exit amid an ongoing
review of its energy policy—one meant to widen its
lending window for cleaner energy sources, according to
a bank official.
But
Woochong Um, director for energy, transportation and
water, added fossil-fuel projects have to pass the
bank’s stringent evaluation standards before being
funded.
Coal and
other fossil-fired power projects are environmentally
harmful since these release carbon dioxide, one of the
major greenhouse gases responsible for climate change.
Coal emits around 80 percent more carbon per unit of
energy compared to gas and 29 percent more carbon than
oil, said the environment activist group Greenpeace.
“Our
current strategy is to move towards cleaner energy . . .
but we have no strategy to exit on coal. When ADB deals
with countries on their energy option and they want
coal-based energy source, we engage them by promoting
cleaner use of coal,” Um told civil society
organizations in an energy forum.
ADB’s
current review of its energy policy, approved in 1995,
emphasizes the need to accelerate widespread application
of renewable energy in its 48 developing member
countries.
Um said
the bank also allotted $1 billion a year for its clean
energy operations starting 2008, including the financing
of smaller efficient energy projects, technology
transfer costs, and grant assistance for developing its
knowledge base.
ADB
total investment between 2000 and 2005 was about $720
million, including the $161-million Renewable Energy
Development Project in Indonesia, the $35-million Gansu
Clean Energy Development Project in China and several
private-sector equity investments geared for clean
energy projects.
Um
reiterated the need for countries to diversify their
energy sources, but conceded that coal-based energy
sources remain comparatively dependable with the
stability of coal prices and supply compared with
others.
Civil
society organizations have urged ADB to stop funding
coal-fed power plants and other environmentally harmful
energy projects like big hydropower, which they claim
produce toxic levels of methane gases.
Environment advocates want ADB to keep coal projects out
of its $1-billion pipeline to further improve the
environmental integrity of its clean energy facility.
Greenpeace said that each $1 ADB invests in coal
projects is equivalent to $3 in external losses, mostly
environmental and social costs.
Um said
the bank’s new undertaking, the Carbon Market
Initiative, aims to further promote cleaner energy and
climate change mitigation by bridging the funding gap
for projects eligible for carbon credits. “We provide
upfront financing for projects that need it . . .
[right now] funding comes only after credits have been
generated.” |
