Goodbye to a Misguided War on Coal

Co-authored by Rupert Darwall


The unexpected departure of Dr. Jim Yong Kim as president of the World Bank gives President Donald J. Trump the perfect opportunity to reverse the anti-fossil fuel, energy poverty agenda the bank has pursued since Dr. Kim’s appointment by President Barack Obama in 2012.

The World Bank is the world’s premier development bank. Its knowledge of developing countries means that its participation is often essential to leverage private sector investment into some of the world’s poorest countries.

Rather than development, Dr. Kim saw the bank’s principal job as waging President Obama’s war on coal across the developing world. One of his first acts was instituting a ban on World Bank participation in any funding of new electrical generation projects using coal, other than in the most exceptional circumstances.

The United States is the bank’s largest funder, but Dr. Kim behaved as if Hillary Clinton had won Barack Obama’s third term in the 2016 presidential election. In no area was the policy rupture between the two administrations sharper than on energy, where Mr. Obama’s war on coal has been replaced by the Trump administration’s doctrine of American energy dominance.

Yet Dr. Kim decided to defy his host government and largest funder. At the December 2017 climate summit, France’s President Macron threw to celebrate the second anniversary of the Paris Agreement, Dr. Kim announced that the World Bank was extending its financing ban to upstream oil and gas. To cap it all, in October 2017 Dr. Kim said the bank would be withdrawing its support for its sole remaining coal project, a badly needed clean coal plant in Kosovo, a struggling country in the Balkans.

It’s not only that Dr. Kim misread the politics. On the fundamentals of what is good for developing countries’ economic development and human welfare, the Trump administration is right and Dr. Kim wrong. The centralized electrical grid is the single most beneficial innovation of the 20th century. In developed countries, it is what separates the 20th century from the 19th century.

It’s hardly surprising that FDR’s rural electrification program in the 1930s was one of the most popular and lasting parts of the New Deal. Rural farmers and small towns wanted all the benefits that only reliable, grid-connected electricity can provide and that city and suburban dwellers were already enjoying.

A study out this month by the London-based Global Warming Policy Foundation shows why. In the 1920s and 1930s, small-scale generation and local distribution grids were increasingly replaced by much larger coal-fired power stations connected by a national grid. In those two decades, electricity prices more than halved, something that hasn’t happened again.

This is the energy transition developing countries want and need, but is being denied them by First World environmentalists. Because Dr. Kim was out of his depth at the World Bank, he allowed the bank to be captured by climate activists prioritizing green ideology over the interests of the world’s poor.

Only last month, the World Bank announced it would be committing $200 billion to climate action. “This is about putting countries and communities in charge of building a safer, more climate-resilient future,” Dr. Kim declared. That’s not going to make energy cheaper or more accessible or keep the lights on and the refrigerator chilled.

Wind and solar power are inherently unreliable and are not a substitute for a proper grid and thermal power generation. Despite Elon Musk’s claims, the developed world has not cracked the inherent intermittency of generating electricity from the weather.

For developing countries, the economics of wind and solar mean that the more renewables they have, the more it costs to build out a proper grid and invest in reliable generation. It is simply immoral to expect developing countries to solve the intermittency problem that has defied solution by the best brains in the West and inflict higher energy costs on those who can least afford them.

Dr. Kim’s departure opens the opportunity to end the World Bank’s walk on the dark side. In selecting the U.S. candidate to succeed him, the Trump administration will have the support of developing nations angry at the West’s climate imperialism and its attempts to obstruct their economic development. It will also have the support of energy-realist nations such as Japan and Australia, while China, consuming half the world’s coal, can hardly object. On energy realism, energy access and economic development, the goals and interests of developing nations and the United States are strongly aligned.

Originally published at the Washington Times.