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World Bank urges economic growth with clean energy

01.01.70

WASHINGTON -- According to a new report validated by the World Bank, the global community needs to address issues hindering economic growth without losing sight of environmental goals. But environmental groups say the report does not indicate the way developed countries should effectively take a lead.

"The decisions countries make today on energy policies and technology will have long-term consequences for the sustainability and for the health of our environment," World Bank President Paul Wolfowitz said last week.

Titled "Clean energy and development: Toward an Investment Framework," the report discusses a framework of investment requirements in developing countries that will meet modern energy needs while considering environmental efficiency. The strategy could potentially affect significant energy investment.

The document outlines large-scale solutions for climate change such as new thermal plants and dams, greater funding for renewable energy and greater market liberalization.

According to International Atomic Energy Agency estimates, a total capital investment of $8.1 trillion is needed between 2003 and 2030, in order to meet the rapidly growing energy needs of developing countries. Using these figures, access to energy services will cost an average of $300 billion a year.

Jamal Saghir, World Bank director for energy and water, told United Press International that under the three agendas listed in the report, access to energy services will cost approximately $300 billion a year, mitigation of energy change could cost anything between $10 billion and $100 billion a year, and adapting to climate change will cost between $10 billion to $40 billion a year.

Saghir said the agenda is not a short-term one. It will take at least the next 25 to 30 years to implement, "but the decision we take today will affect the future, so we have to take the right decision and put in the investment," he said.

Saghir acknowledged -- as did the report -- that investment funding will require a much-heightened partnership between the public and private sectors in order to cover the costs of moving toward better technology. The global carbon economy is dependent on the level of stability, the report said.

"It doesn't take seriously what one would hope would be an aspect of the bank in terms of investment and energy," said David Waskow, international program director at Friends of the Earth U.S., based in Washington.

Although Waskow acknowledged that the report did flag some important questions on regulatory framework, he said there was no discussion of continued investment by the bank in oil projects around the world.

Saghir said the bank acknowledged that it needs to look at existing funds to see what it can do to mobilize additional investment for the project. "We have to look at the whole spectrum" of resources, he said.

Friends of the Earth also said that the report looks at how developing countries are going to be affected by a need to mobilize greater energy resources, but it does not explain how "rich countries are going to take the lion's share of the burden -- it shows the victims, not who is first and foremost responsible," Waskow said.

The report addresses tackling climate change for the "global public good," but simply refers to technological advancements needed for stabilizing and regulating greenhouse gas emissions.

"Because industrialized countries are responsible for most of the anthropogenic greenhouse gases currently in the atmosphere, developing countries are not expected to bear the additional costs of a low-carbon economy," the report said.

In order to mitigate carbon trading, Saghir addressed the need for a "long-term, stable system," whereby public financing could be mobilized.

But Waskow believes the Bank has not paid enough attention to the social and environmental impacts that the report's objectives aim to address through investing in mechanisms for improvement.

"They should clarify the goal in terms of reducing greenhouse emissions with a long-term regulatory framework addressing goals and objectives," Waskow said.

The paper acknowledges there is an "urgent and difficult challenge" requiring a shift in the thought processes of the Bank itself, state-wide policies and the international community.

However, with validation of the report, detailed proposals on the financing of clean development will be on the table as early as September, in the next stage on the agenda.

"The global community today is working towards a potential double dividend to provide the energy that is essential for economic growth and fighting poverty on the one hand and preserving the environment locally and globally on the other," Saghir said.

Expert opinion

Halter Marek

02.12.06

Halter Marek
Le College de France
Olivier Giscard dEstaing

02.12.06

Olivier Giscard dEstaing
COPAM, France
Mika Ohbayashi

02.12.06

Mika Ohbayashi
Institute for Sustainable Energy Poliy
Bill Pace

02.12.06

Bill Pace
World Federalist Movement - Institute for Global Policy
Peter I. Hajnal

01.12.06

Peter I. Hajnal
Toronto University, G8 Research Group