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Analysis Shows Bank Failed to Fully Consider Environmental and Health Costs in Controversial South African Project
For Immediate Release
WASHINGTON, DC. March 21, 2011—The Center for International Environmental Law (CIEL), www.ciel.org, a leading non-profit that uses international law to defend the right to a healthy planet, today announced the release of a new report, “Fossilized Thinking: The World Bank, Eskom, and the Real Cost of Coal.”
The report examines the economics underlying the Bank’s $3 billion loan to support a massive new coal-fired plant in South Africa. Specifically, the report evaluates whether the Bank adequately considered the impacts the 4,800 MW Eskom Project will have on human health and the environment and the likely economic costs of these impacts. The Bank’s operational policies require that these ‘externalities’ be taken into account to determine whether a project’s long-term economic benefits outweigh its costs.
CIEL’s analysis reveals that, at least in this case, the Bank failed to adequately address and quantify important negative environmental effects, such as water scarcity and quality, air quality, and transboundary impacts. Nor did the Bank fully address the public health impacts associated with the environmental consequences of coal-based power.
“This project highlights a broader problem in World Bank funding,” explained Steve Porter, Climate Program Director at CIEL. “Because all of the costs have not been accounted for, coal projects like Eskom have been unfairly favored, which means that there has never been a real consideration of alternatives, such as wind, solar and other alternative energy sources.”
The World Bank is now in the midst of an Energy Strategy Review process. CIEL’s report calls on The World Bank to use the lessons from the Eskom project experience. A review of the Eskom project by the Bank’s Inspection Panel, also now underway, should shed greater light on the social and environmental impacts of the project, but the Inspection Panel is unlikely to issue its report before the conclusion of the Energy Strategy Review.
“The World Bank needs to move beyond the fossilized thinking that drives investment in coal,” said report co-author Niranjali Amerasinghe. “The new Energy Strategy should embrace a more sustainable future.”
Full Report Available at: www.ciel.org/Publications/FossilThinking_Eskom_21Mar11
For more information, please contact Niranjali Amerasinghe.
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