On 6^th April, the World Bank took a step that underlines how the developing world’s determination to achieve rapid economic growth makes a mockery of the West’s loudly proclaimed intention to “save the planet” by reducing CO₂ emissions. In doing so, it was helped by the British government. 

What happened was that the Bank approved a $3.75 billion loan to build one of the world’s largest coal fired power plants in South Africa – it will, for example, be far larger than Drax, the biggest coal-fired power station in the UK. The new plant, a 4,800 megawatt plant estimated to emit 25 million tonnes of CO₂ per annum means that South Africa is now most unlikely to meet its promise to curb future greenhouse gas emissions. That is significant enough – but the main importance of this rests with the circumstances of its happening and especially with what it tells us about global political realities.

Inadequate electricity supply is a serious and worsening obstacle to South Africa’s economic development and political stability. The South African government says the plant is essential if millions of very poor people in southern Africa (the plant will provide energy beyond South Africa itself) are to get the energy security and basic services the developed world takes for granted – water supplies, health care, education, food preservation etc. all depend on the reliable supply of electricity. Obiageli Ezekwesili, the World Bank’s vice president for Africa said, “Without an increased energy supply, South Africans will face hardship for the poor and limited economic growth. Access to energy is essential for fighting poverty and catalyzing growth, both in South Africa and the wider sub-region.”

The project will use similar technology to a huge (described as “Ultra Mega”) coal-fired plant in India (one of six planned) already supported by the World Bank and the UK; absurdly, this project is also eligible for huge payments from the West under Kyoto’s carbon trading scheme. When that loan was announced, Tom Picken of Friends of the Earth said, “This plant exposes how the World Bank’s attempt to get involved in combating climate change is nothing but a farce”.

It’s no surprise, therefore, that environmental activists saw the South African proposal as a precedent too far. Christian Aid adviser, Eliot Whittington, said “This is a massive amount of international public finance going to the dirtiest form of energy in a highly unequal society without strong indications that it will have any positive impact on energy access for the poorest”. Therefore, with the USA already committed to abstention and the UK (because of its voting strength in the World Bank) with the casting vote, activist groups – notably Greenpeace, Friends of the Earth and Christian Aid – mounted a major campaign for the UK to block the proposal with a clear “No”.

But, in the event, Britain also abstained. This allowed the proposal to proceed with the consensus support of countries whose growth is massively dependent on coal, especially India, China and Brazil – together with South Africa itself. Environmentalists feel badly let down by the UK. After all, the Department of Energy and Climate Change is clear: noting that climate change is “a massive threat to the global environment [demanding] … an urgent and radical response across the developed and developing world”, its website states that the first of its “Strategic Objectives” is to “Secure global commitments which prevent dangerous climate change”. How can this possibly be reconciled with the UK’s decision on the South African loan?

Ruth Davis, chief policy adviser for Greenpeace said, “Britain could have stopped the loan if it had wanted to but it took the easy way out”.

In fact, Britain now seems likely to have achieved the worst of all outcomes. In sharp contrast to the above, its failure to support the proposal could damage its relations with a developing world which may well see it as further evidence of the patronising and comfortable West’s reluctance to support their economic development – and the wellbeing of millions of the world’s poorest people. It could jeopardise the Mexico climate summit later this year.

But, in my view, Roger Pielke Jr. has identified the real significance of this story:

“When GDP growth comes into conflict with emissions reduction goals, it is not going to be growth that is scaled back. Further, when rich countries wanting emissions reductions run into poorer countries wanting energy, it is not going to be rich countries who get their way. When energy access depends upon cheap energy, arguments to increase energy costs or deny energy access are not going to be very compelling. The South African coal plant decision well illustrates many of the political boundary conditions that shape climate policy. Policy design will have to accommodate these conditions, rather than ignore them or think that they will somehow go away”.

In other words, we in the West may be prepared to wreck our economies with “green” policies, but the developing world – rapidly increasing its CO₂ emissions – is not going to follow suit.