The World Bank has announced a new energy strategy that will limit the financing of coal-fired power plants around the globe, confining the funding to countries that have little to no clean energy alternatives.
The goal, according to the recently updated Energy Sector Directions Paper, is to balance out the impact of humans on the environment by allowing poor countries to continue to use coal where necessary, while encouraging more developed countries to switch to cleaner energy sources.
The Bank has come under scrutiny in recent years for its dedication to tackling poverty and climate change while still funding coal, but holds strong to the argument that it is sometimes necessary to help eradicate poverty, especially in poor African countries where coal is plentiful and there are limited resources available.
While this doesnâ€™t mean we will see a serious coal phase-out just yet, since plenty of funding comes from the private sector, the Bank does hope that this move will encourage investors to take their money elsewhere and to better understand the importance of investing in clean energy whenever possible.
According to Reuters, the World Bank is currently debating whether to provide a loan to a coal-fired power plant in Kosovo, a country that claims coal is the cheapest option for clean energy. The decision is expected to come out sometime next year, which will likely show environmentalists how serious this shift really is.
What do you think will happen as a result of this? At this stage, should the World Bank stop coal funding altogether, or is this a smart policy because it helps to alleviate poverty in the short term?
Image CC licensed byÂ Doc Searls: Coal-fired power plant.