Niranjali Amerasinghe
Center for International Environmental Law
World Bank: What Role for Coal
April 13, 2011
“Over 75% of the global increase in energy use from 20072030 is expected to be met through fossil fuels, especially
coal, and an estimated 77% of the power stations required to
meet demand are yet to be built.” World Economic Forum,
Global Risks 2011.
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Coal projects have numerous
environmental and social costs that need
to be fully accounted (see Eskom Case
Study).
Without accounting for all associated
costs, an effective evaluation of viable
alternatives is impossible.
The Energy Strategy must provide for
full cost accounting for coal and other
energy projects.
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Recent studies examining costs of coal - Harvard
Coal Study estimates that total quantifiable costs in
the US could be roughly 345 billion dollars).
A life-cycle analysis is needed (mining, processing,
transportation, combustion, and storage).
Release of toxics and heavy metals, particulate
matter, greenhouse gases etc., resulting in water
and soil contamination, and air pollution.
Implications for health: toxicity; heavy metal
poisoning; respiratory illnesses, black lung disease,
low birth weight etc.
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3.75 billion dollar loan to Eskom, South Africa, 3.04
billion dollars allocated to the 4800 MW Medupi
Coal Plant – among the largest in the world.
Inspection Panel Claim.
CIEL Report “Fossilized Thinking” examines
treatment of externalities in the context of Bank OP
10.04. Main externalities:
Transboundary Impacts
 Water-related Impacts
 Air Quality Concerns
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Concludes that the Economic Analysis for Eskom
failed to fully consider negative externalities.
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Cost Benefit Analysis: Show that benefits are
equal to or outweigh costs, and that the
benefits are equal to or greater than the
alternatives.
Section 8 essentially calls for consideration of
externalities, which involves identifying
impacts in the EIA and assigning monetary
values where possible in the Economic
Analysis.
This is very difficult, but guidance exists…
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Must identify impacts and quantify (where possible).
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E.g. Transboundary impacts
From: Limpopo River Awareness Kit
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If mitigation strategies are expected, the
impacts of those strategies must be analyzed.
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Sulfur scrubbing technology – additional 6 mil cubic
meters of water/year, additional waste, reduced
efficiency.
Opportunity Costs need careful consideration.
Water Scarcity - With sulfur abatement technology,
Medupi will need 12 mil cubic meters of water/year.
 Current Mokolo Dam already fully allocated and
Mokolo-Crocodile Augmentation Project still may
not provide enough water. Reallocation?
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Costs absent mitigation scenarios should be
quantified (if resources are constrained).
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Sulfur Dioxide emissions in an air pollution hot
zone.
Sulfur scrubbing technology – may not be in place?
If energy access is a goal and built into costbenefit scenarios, access must be demonstrably
guaranteed.
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Calculating net CO2 emissions; 30 mil tons gross
emissions v. 12.6 mil tons net emissions
Necessarily assumes energy access to those who
currently use wood burning stoves etc., but is this
guaranteed?
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The Eskom Case Study shows that inadequate
consideration of externalities in a cost benefit
analyses leads to seriously under-valued costs.
The Energy Strategy must ensure that full cost
accounting is required for all projects – note
consistency with other Bank policies.
If energy access is a stated benefit, project
documents must show how this is guaranteed
and how it will be implemented.
Niranjali Amerasinghe; namerasinghe@ciel.org