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A decade
ago you would have probably been thrown into the box
called “fringe group” for simply speaking against
something as esoteric-sounding as global warming.
Nowadays—thanks to those who tirelessly ploughed the
ground earlier—it has become easier, even popular, to
talk about climate change.
The
issue has even become de rigeur for institutions with
claims to aims of sustainability, such as the Asian
Development Bank (ADB). Considering the magnitude of the
climate crisis, and however late, the ADB’s entry into
the debate is not exactly unwelcome.
This
year the ADB is set to approve a supposedly new energy
strategy crafted to address challenges that may impede
or undo the sustainable development objectives of its
developing member- countries (DMCs). Unfortunately, if
the draft strategy the ADB released to the region
recently is any indication of the role that the bank
will play in the next decade, the financing institution
is set to exacerbate, not alleviate, the economic and
ecological vulnerabilities of Asia and the Pacific.
Despite
the immense resources at its command and over a year
allocated to research and writing, the ADB has produced
an embarrassing document which, aside from a few
highlights, has mostly elicited comments ranging from
“not visionary” to “of poor quality” and “seriously
flawed.”
Indeed,
a close reading of the ADB strategy shows in
embarrassing detail how defective the document is. There
are no timetables, targets or benchmarks in the document
that will determine where its resources will be spent
and whether the ADB strategy will be successful or not.
The bank
document even includes an appalling caveat stating, “The
contents herein do not necessarily reflect the views and
policies of the ADB” which “does not guarantee the
accuracy of the data included . . . and accepts no
responsibility for any consequences of their use.”
While
the ADB identifies coal as one of the leading
contributors to global warming, the bank also advises
its DMCs that it will continue to support more
coal-fueled power plants by promoting the myth of “clean
coal,” an oxymoron redolent of fraudulent economics.
The ADB
paper largely avoided referencing available literature
or used sources, such as Wikipedia, in sections that
could have leveraged market-growth trajectories, cost
projections and policy imperatives based on reports from
leading sustainable-energy industry groups and
consulting firms. The bank even employed the dubious
work of a nuclear-industry group to belittle
sustainable-energy options.
As the
ADB correctly recognizes, and probably the only matter
with adequate clarity, economic growth in
Asia will not be
sustainable if it will be fed by fossil fuels, which
“will significantly increase greenhouse-gas (GHG)
emissions and result in dangerous levels of global
warming.”
Unless
fossil-fuel use—particularly coal-fired power
generation—is curbed dramatically and soon, runaway
climate change will intensify prevailing misery by
devastating the region’s freshwater supplies,
agriculture and fragile ecosystems.
Today,
Asia represents nearly a quarter of global GHG
emissions, compared to its previous one-tenth share.
This is largely attributable to the steep increase in
the region’s coal-fueled energy consumption, which rose
by 230 percent in the period 1973 to 2003.
Unless
financing and policy measures are diverted to energy
solutions, Asia’s dependence on coal, currently
representing 42 percent of
Asia’s CO2 emissions, is projected to grow alongside the
anticipated increase in the region’s energy demand. But
alongside coal expansion is the rapid growth of risk.
The ADB
itself recognized the problem 12 years ago when it
issued its still operative Energy Policy, which
recommended that the bank must “emphasize the need for
DMCs to incorporate systematically environmental
considerations, as well as social considerations . . .
so that project costs adequately reflect the
environmental and social costs.”
Unfortunately, the ADB has little to show in terms of
its success in mainstreaming “external costs,” which
refer to costs arising from the ecological and social
impacts of a power project that are passed on
(externalized) to taxpayers. In fact, the issue of
external costs is one of the key items in the bank’s
1995 policy that was dropped from the ADB’s 2007 energy
paper.
Coal is
a strategic option only for the shortsighted. In a
carbon-constrained world, electricity costs are
projected to rise as coal-fired emissions become
increasingly regulated.
Contrary
to coal-industry prattle, coal plants today typically
reach only up to 38 percent to 40 percent thermal
efficiencies, while improvements using even the most
modern coal-fired power plants have demonstrated
marginal results. More expensive coal-fired power
stations using supercritical and ultrasupercritical
boilers can reach no higher than 50 percent efficiency,
while plants using fluidized bed systems fare worse.
Even the
few integrated combined- cycle coal plants in pilot
project stage, which are considered costlier than
conventional coal technologies, are expected to improve
coal-combustion efficiencies of only up to 50 percent.
Promoting the option of carbon capture and storage (CCS)
is even more problematic. The use of CCS will actually
increase power-generation costs between 40 percent to 80
percent. Between 10 percent to 40 percent more fossil
fuel must also be burned when CCS is used just to
achieve the same power output.
CCS is
also not expected to begin commercially till 2020 (at
the earliest), which means that during the very period
when huge emissions reductions are required, CCS will
not be relevant.
Intelligent use of energy, not abstinence, is an
imperative in a regional energy regime increasingly
dominated by the concerns of climate change and energy
security. Even the ADB’s Operations Evaluation Division
recognized this in its review of the bank’s
energy-sector performance, where it explicitly called on
the bank to make as its single highest priority the full
utilization of the energy efficiency potential of a DMC
before considering financing any power-capacity
additions in its DMCs.
This
discussion, however, is absent from the ADB energy
paper.
Keeping
to rigorous environmental and efficiency targets in the
energy sector will pay off in terms of economics.
According to the European Renewable Energy Council (EREC),
which is composed of some of the largest global players
in the sustainable-energy industry, it is technically
and economically possible to halve CO2 emissions in the
power sector by 2030 not through the expansion of coal
or nuclear energy but through energy efficiency
measures, combined heat and power (CHP) and renewables.
Numerous
studies have shown that the increased use of CHP will
improve the supply system’s energy conversion efficiency
by increasingly utilizing natural gas and sustainably
sourced biomass. With the right policy support, it is
also commercially feasible for 70 percent of global
electricity to be supplied using renewable energy
sources by 2050.
Large
up-front costs of renewable electricity systems are one
of the key barriers to greater market penetration, but a
number of programs friendly to renewables have been put
to use over the years to address such hurdles. These are
policies that the ADB have avoided to promote with even
a fraction of the zeal that has marked its region-wide
backing of debacle-ridden, cookie-cutter privatization
schemes.
One
instrument involves feed-in tariffs where producers of
electricity are given the right to feed renewable
electricity into the public grid, receive a premium
tariff per generated kilowatt-hour that reflects the
benefits of renewable electricity compared to power
produced from fossil sources, and receive the premium
tariff over a fixed period of time.
Feed-in
tariff systems are responsible for the rapid growth of
renewables in countries such as
Germany,
Denmark, Spain and even India.
Another
policy mechanism is the Renewable Portfolio Standard,
responsible for the surge of development that has
attended the wind market in Texas, USA.
Renewables-friendly policy programs are behind the
dramatic growth of the global renewable energy (RE)
market, which saw China lead the global increase in
renewable power capacity (excluding large hydropower) in
2004.
In 2006
RE-oriented policies leveraged around $100 billion (or
18 percent) of global investment in power generation.
Much of the investments have come from the wind
industry, which enjoyed a record year in 2006 when wind
turbine sales alone were valued at around US$23 billion
and when global demand for wind power capacity grew by
32 percent.
In terms
of total installed wind capacity, India has jumped to
fourth place in the global ranking—ahead of Denmark—when
it added 1.4 gigawatts in 2005. Solar applications,
geothermal expansion and the increase in uptake of mini
hydro options have also registered phenomenal growth.
Industry
advocates, such as EREC, calculate that fuel cost
savings under a sustainable energy scenario can reach up
to $202 billion per year, which would dwarf the “extra
global annual investment of $22 billion in clean and
renewable power plants on top of current expenditure.”
In
addition, converting the $250 billion in subsidies that
coal and gas receive annually to sustainable renewables
could more than cover the shift towards more efficiently
run, renewable energy-powered economies.
Deep-seated changes to the way energy is produced and
used will require determination on the part of
governments and institutions to put in place policies
that can tap into the renewables investment sector.
“The
renewable industry is willing and able to deliver the
power plants the world needs,” said EREC policy director
Oliver Shafer. Renewables simply need the right climate
and energy policies. “Decisions made in the next few
years,” said Schafer, “will continue to have an impact
in 2050. Only if a renewable energy path is taken can we
avoid the worst excesses of climate change.”
Renato
Redentor Constantino is a writer based in Quezon City,
Philippines, and is currently climate campaign advisor
to Greenpeace in
Asia. Views expressed in the article are the author’s alone. |
