Solar is much better than fossil fuel for bringing electricity to the poor, so Old King Coal is quitting Asia.
LONDON, 14 May, 2021 − The Asian Development Bank (ADB), which serves more than half the world’s population, has decided it will no longer finance coal for electric generation and heating plants and instead will aid poor countries in the rapid phase-out of existing coal plants. So for Old King Coal, it’s good-bye to Asia.
The bank’s new policy document says coal has no future if developing countries are to avoid the worst effects of climate change. It aims to phase out all coal plants in Asia by the middle of the century.
Despite the shift in policy, the plan remains to equip the entire population of the region the bank serves with access to electricity by 2030. It will also commit US$80 billion between now and 2030 to support climate change mitigation and adaption in the most vulnerable communities.
The bank’s decision is important because the Asia-Pacific region is home to the largest proportion of the world’s population and to many of its poorest people. It includes both China and India and also many island states in the Pacific.
ADB says the region’s progress in poverty reduction and economic growth has been remarkable, but that reliance on coal has not solved the problem of access to electricity. Fossil fuels are harming the region’s environment and accelerating climate change.
Vulnerable region
Because of this reliance on coal the bank’s developing member countries contribute 45% of the world’s emissions of carbon dioxide from the energy sector. “With continued economic growth, emissions from these countries will further increase if energy systems continue to rely on the expanded use of fossil fuels,” the policy document says.
In addition to the challenges of climate change mitigation, many member countries “are highly exposed and vulnerable to natural hazards and impacts of climate change, such as the growing frequency and intensity of extreme weather events, sea level rise, changes in rainfall patterns, and increasing temperatures.
“Disaster-related losses are already growing due to insufficient regard for climate and disaster risk in either the design or location of new infrastructure. Climate change impacts and disruption of ecosystem services can lead to severe effects on livelihoods and food security, which in turn would affect human health.
“Indeed, the region is known to be the most vulnerable in the world to natural disasters, from typhoons and flooding to earthquakes and tsunamis.
“To become truly sustainable, economic growth must be decoupled from environmental degradation.”
“Investors have already caught on to the fact that coal can no longer be the least-cost option”
Instead of investing in coal, the bank will give priority to energy efficiency and renewable energy. Even without coal, it believes it can secure a grid supply by 2030 for the 200 million people in the Asia-Pacific region who still lack access to electricity. This, it says, can be done best with renewables, especially solar power.
The bank says some countries have made notable strides with electrification since 2010. One of the greatest success stories is Cambodia, where electrification has increased from 31% in 2010 to 93% in 2018.
South Asia, as a whole, has extended electricity services to a “remarkable 286 million people” in the same time period. All countries in the region now have more than 50% of their population with grid electricity, although a number still fall below 80%.
These countries include Pakistan, Myanmar, Papua-New Guinea, the Solomon Islands and Vanuatu. The people still without a supply are largely in outlying islands or in hard-to-reach mountainous regions. Solar energy is particularly suitable for these areas.
Expanding access to clean cooking facilities, vital for promoting indoor and outdoor air quality, has been less successful. Central and South Asia had less than 50% access in 2018, and other regions only about two-thirds.
Gas still an option
Ensuring 100% of the population rely primarily on clean fuels and technologies for cooking by 2030 “is clearly more challenging than electrification,” the bank says.
Partly for this reason, it has not entirely ruled out the use of gas, particularly for cooking, but says it would need to be convinced that there was not a better alternative. It will review its energy policy in 2025.
Chuck Baclagon, Asia Finance Campaigner for 350.org, said: “We welcome this step because it brings to fruition the years of painstaking resistance from communities and organisations against energy projects that come at the expense of health, ecosystems, and the climate.
“The exclusion of coal in the new investment policy further affirms that coal is not only bad for the environment and our climate, it is also a bad investment because of the growing risk of coal infrastructure becoming stranded assets.
“Investors have already caught on to the fact that coal can no longer be the least-cost option for demand, even before factors such as public health impacts and environmental damage are priced in.” − Climate News Network