Today, the Obama administration announced a potentially important change to its multilateral financing for overseas coal plants.
Using its authority at the World Bank, the United States will oppose coal projects in all but the most extreme circumstances, reported The Hill’s Ben Goad.
“By encouraging the use of clean energy in multilateral development bank projects, we are furthering the U.S. efforts to address the urgent challenges of climate change,” said Lael Brainard, under secretary for international affairs at the Treasury Department.
In order for a coal plant to qualify for funding, it would have to be the last resort for the nation in question: there would have to be no other financially viable methods of electrical generation. The regulations match what the Obama administration is doing domestically with Environmental Protection Agency restrictions on new coal plant construction.
While Ben Goad’s reporting is quick to point out the United States does not have the weight in the World Bank to block coal projects unilaterally, the Obama administration is laying down an important marker about cleaning up energy systems worldwide.
It remains to be seen, however, whether such a policy shift would make a dent in the current demand for coal. The rule change will not affect existing power plants, nor will it slow down construction by countries that don’t rely on international financing, such as China, Japan or even Germany.
Each of these nations have invested heavily in renewable energy sources, but to date no source can match the base load power (or minimum available) supplied by fossil fuels (excepting nuclear, which is expensive compared to coal but increasingly unpopular in the aftermath of Fukushima Daichi).
In the intermediate term, coal is expected to overtake oil as the principal fuel source, particularly in East Asia, according to a report in the Sydney Morning Herald.
Nevertheless, the Obama administration’s move is an important first step. Climate hawks can only hope this is the opening salvo in an aggressive posture on green energy adoption worldwide (as well as a doubling-down on progress made in the United States). It will certainly be an uphill battle.