by Aven Satre-Meloy
Originally published on Mosaic
In a historic move, the World Bank has just agreed to stop funding coal projects. This comes as welcome and exciting news to those who were wondering whether or not the World Bank would lead the inevitable transition away from coal financing.
Over the past five years, the World Bank has funded nearly $6 billion in coal projects, but now it has a new energy strategy and will only do so in rare circumstances under specific conditions. These conditions,according to the World Bank, take into account considerations such as “meeting basic energy needs in countries with no feasible alternatives to coal and a lack of financing for coal power.”
The new commitment should help the World Bank focus on investing in clean energy and meeting the needs of the poorest people in the world while stepping up to fight climate change. Indeed, investments in clean energy sources should help the poorest citizens gain access to energy, since sources such as wind, solar, and geothermal are decentralized and can be applied to isolated communities in the developing world that lack electrification programs.
As the cost of renewable sources continues to fall, clean energy will become cost competitive with coal generation without even taking into account the external costs of pollution and other health and environmental concerns.
With so many benefits, especially to people in the poorest regions of the world, renewable sources should be the focus of major international financial institutions such as the World Bank — many have wondered, though, why it has taken so long for the transition to occur.
Still, the World Bank’s leading efforts are welcome news, and now the hope is that it will pave the way for similar institutions to follow its lead. As the benefits of clean energy continue to stack up against the costs of coal, oil, and gas, hopefully we’ll see even more financial institutions go the route of the World Bank sooner rather than later.