Between 2009 and 2012, the World Bank spent billions of dollars funding coal-fired power stations in the global south. But coal stations are toxic to local environments, and are the cause of many health problems, including asthma and tuberculosis. In the US, pollution from coal stations has caused over 13,000 premature deaths, leading to domestic restrictions of their use. How will the World Bank’s new president, Dr. Jim Yong Kim, an expert in human health, address these controversies?
By George Gao
Global Policy in Brief
July 2, 2012
July 2, 2012
During the presidency of Robert Zoellick (2007-2012), the World Bank spent a record sum to finance fossil fuel power projects -- despite its commitment to address climate change. The Bank’s new president, Jim Yong Kim, must immediately decide whether to continue multi-billion dollar coal-fired electricity projects in the global south.
US citizens have always held the World Bank presidency. In 2012, for the first time since the Bank’s founding in 1944, non-US candidates campaigned notably for the position. Columbian Jose Antonio Ocampo and Nigerian Ngozi Okonjo-Iweala attracted considerable media attention, before ultimately yielding to the US nominee.
Yet many progressives see Kim as more radical than his opponents. Kim is an MD and an anthropologist by training, which makes him the first World Bank president without a background in economics or politics. Kim has worked with Paul Farmer in Haiti and has directed the World Health Organization’s HIV/AIDS program. He has a public image of near-celebrity status, as an engaged and caring advocate for the world’s most impoverished people.
Kim’s book, Dying for Growth: Global Inequality and the Health of the Poor (2002), gained attention after his nomination. He wrote, “The studies in this book present evidence that the quest for growth in GDP and corporate profits has in fact worsened the lives of millions of women and men.” The statement opposes, ideologically, much of the World Bank’s privatization and trade liberalization tactics of the past three decades.
Kim will be in charge of the World Bank’s $250 billion dollar budget and over 9,000 staff members. His decision on the future of coal-fired power plants will have serious implications for global health and the environment.
In 2009, the World Bank invested a record $4.7 billion in fossil fuel power projects. During 2010, the Bank continued the trend, investing $3.8 billion in a single coal-fired power station in South Africa. Michael Stulman of Africa Action called the project “one of those stereotypical development disaster stories.” Soon afterwards, the World Bank funded another multi-billion dollar coal-fired project in Kosovo.
In 2011, the Bank decided to direct its coal power outlays away from middle-income countries and to restrict such loans to the world’s poorest nations. Media sources like the New York Times criticized the Bank for the move, saying that it would slow economic growth in many developing nations, sacrificing the welfare of the poor to environmental concerns. This is a false narrative -- one that pits development against the environment, and one that perpetuates business as usual.
The Bank has said it will move ahead with funding of coal-fired power plants in the world’s poorest regions to help with their development. Fossil fuel companies benefit immensely from these projects under the new “restriction,” and the poorest of the poor suffer the resulting health effects.
The poorest countries often have the weakest governments and the least effective environmental regulations. Companies benefitting from World Bank projects take advantage, gaining easy access to resources and high profit margins. The local community cannot afford to buy the energy generated by these new coal plants. The vast majority of income and benefit goes far away and little returns to the affected community, in schools, in healthcare, or in aid.
The World Bank’s projects commit the local regions to coal for 50 years -- the average life-expectancy of such a plant. This commitment bars investments in alternative energy and holds the region back from adopting new energy technologies.
The Kosovo coal plant and South Africa’s Medupi plant have touched off mass protests in their local communities. Workers, citizens, and children suffer from tuberculosis and asthma as a direct result of the plants’ air pollution. The plants’ waste runs off into local water resources. The United States heavily restricts these technologies domestically, due to harmful health and environmental effects.
Studies show that in the US, coal plants have caused an estimated 13,000 premature deaths and have resulted in over $242 billion in health care costs. The US Environmental Protection Agency has worked with environmental organizations to limit coal power and to close half of existing coal-fired plants. So why aren’t similar concerns addressed in the global south?
The World Bank is not obligated under international law to consider environmental justice or human rights concerns when funding projects, a status that the Bank has used to defend itself from past criticism. Ironically, the Bank continues to push for more international funding of its own environmental programs, seeking to become the world’s foremost lender for environmental projects. It has already received billions of dollars earmarked for climate change mitigation and adaptation. Over 250 organizations from 50 nations have demanded that the World Bank hand over the climate change funds to the United Nations.
Jim Yong Kim’s presidency will challenge the status quo at the Bank and in the larger multilateral development community. Ocampo and Okonjo-Iweala’s campaigns have shown that the global south has an intense interest in the Bank and its lending programs. Like Zoellick, Kim will face harsh questioning over the coal plants’ effects on human health -- questions that he is expected to address. If Kim instead follows Zoellick’s path, the new president will have a much more difficult time than his predecessor in making excuses.
