We promote clean energy policy to deliver the low carbon economy

Ending World Bank Coal Lending

Timely, data-rich and politically astute analysis by Climate Advisers contributed to the successful effort to end most World Bank financing of coal-fired power plants.

The World Bank has helped reduce global energy poverty, but often with a big carbon footprint. Climate Advisers calculated that shifting World Bank energy lending from coal to renewables and energy efficiency would reduce emissions by 250 million tons of carbon per year through 2030 – and inspire other investors to take similar action with even larger climate dividends.

Climate advocates tried unsuccessfully to convince the World Bank to stop financing coal projects. Developing nations refused so long as developed nations continued to build new coal plants themselves and progress seemed unlikely.

Climate Advisers then conducted an original analysis to change the conversation and show that financing coal plants in middle income countries isn’t just bad for the climate – it’s also bad development policy. In a paper published with the Brookings Institution, we demonstrated after a careful review of thousands of financial transactions that coal plants in developing nations do not require international subsidies – most are highly profitable and can be financed locally at low interest rates.

The Climate Advisers analysis not only emboldened climate champions to push harder, but also helped depoliticize international negotiations by shifting the terms of the debate. The key moment in this campaign came when the World Bank announced it would cut off almost all funding for new coal plants in middle-income countries around the world.

Enshrining Energy Efficiency in the Asian Infrastructure Investment Bank

With 80 member countries, the Asian Infrastructure Investment Bank (AIIB) was established to meet the region’s massive need for infrastructure spending. The bank’s investments will dramatically affect energy policy in Asia over the next two decades and beyond – an opportunity to build one of the world’s fastest-growing areas for a cleaner economy.

In 2016, ClimateWorks funded Climate Advisers to lead an international coalition of NGOs who, together, would advocate for the inclusion of strong language that mainstreamed energy efficiency within the newly-formed AIIB’s Energy Strategy. The group – which also included the Energy Foundation China and the China Energy Council, Deutsche Umwelthilfe in Germany, and the International Institute for Energy Conservation in India – sought to engage the AIIB’s senior leadership, Board of Directors, International influencers and in-country stakeholders to raise the profile of energy efficiency and develop a strategy to incorporate it into their daily operations.

This engagement resulted in the AIIB adopting its first-ever Energy Sector Strategy, which prominently features energy efficiency. The Strategy elevates energy efficiency as one of the Bank’s Guiding Principles for lending, supports the mainstreaming of energy efficiency across portfolios, outlines strong energy efficiency and energy productivity indicators in its Results Monitoring Framework and recognizes the importance of energy efficiency in both supply- and demand-side.

While we are pleased with the strategy and its strong focus on energy efficiency, Climate Advisers and our partners will be paying careful attention to its implementation – especially the design of demand-side financial products and promotion of best practice EE technology – in order to identify opportunities to build on this initial success.

Mobilizing the U.S. Government to Support Sustainable Energy for All

Worldwide, about 1.3 billion people lack access to electricity, while 2.7 billion lack access to clean cooking fuels. Meeting their needs is central to reducing poverty. At the same time, we need to shift toward sustainable energy to confront climate change, the impacts of which are already being felt disproportionately by the poor. That requires a mix of renewable energy sources, fossil fuels, and energy-efficiency measures.

Fortunately, the two goals of ending energy poverty and protecting the Earth’s climate are compatible: ending energy poverty with this smart mix of energy sources and policies would only increase carbon dioxide emissions by 0.7 percent in 2030.

Climate Advisers worked with the Center for Global Development to synthesize extensive data and analysis on energy poverty, and created straightforward, politically realistic recommendations for how the United States should lead. We then organized a high-level event featuring a keynote address by the Secretary-General, who together with other distinguished speakers led a thoughtful discussion of one of the world’s most pressing development issues. Finally, we organized an exclusive meeting between the Secretary-General and top administration and political decision makers. Following these efforts, the United States joined other leading nations in endorsing efforts to end energy poverty in climate friendly ways by 2030.

A Carbon Tax and Global Trade: New Ideas for American Competitiveness

To be environmentally effective, climate policies need to protect against simply shifting pollution from one country to another.  To be politically sustainable, climate policies need to create a level playing field for domestic manufacturers and their international competitors.  Measures to achieve these goals, such as levies and rebates on imported and exported goods to equalize climate costs (border measures) also need to comply with international trade laws.

To inform public debate on these issues, Climate Advisers analyzed whether carbon border measures would comply with World Trade Organization obligations.

This study, published with the American Acton Forum and the German Marshall Fund, found that carbon border measures could indeed be applied in a way that met competitiveness and environmental objectives without violating U.S. trade obligations. We also found that allocating the revenue from a border measure to international climate programs would further strengthen the legal case.

America must address climate change to be competitive on the world stage – and we can do it in a way that addresses both policy and political concerns.