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Green Energy Funding Abuse Challenged

Fast-developing countries like India and China are seeking to subsidize new, "ultra-mega" coal plants with a funding mechanism set up under the Kyoto Protocol, which limits the amount of global warming pollutants developed countries can emit.

Allowed by Kyoto, certain clean energy projects that reduce greenhouse gas emissions in developing countries (for example, a wind farm in India) can generate offsets credits that can then be sold to developed countries to use in meeting their greenhouse gas emission reduction targets.

The funding -- known as the "Clean Development Mechanism" or CDM -- is intended to finance low-carbon technologies for quick deployment in developing countries. In theory, the CDM will allow fast-growing economies to leap-frog dirty energy sources like coal that are a primary cause of climate change.

Recently, however, new coal plants that use more efficient, "super-critical" technology have been applying for CDM funds on the grounds that they emit less carbon than the sub-critical coal plants that are common in the developing world. The first project -- a 1,320 mega watt power plant in India -- was registered in early December, and several "ultra-mega watt" (4,000mw) coal plants are now seeking funding.

Earthjustice, in alliance with other groups, is striving to alert the CDM offset crediting board -- and the international community -- to the folly of subsidizing such projects. Using scarce financial resources to subsidize the construction of new coal plants -- regardless of how efficient they are -- will only postpone the day when clean technologies are cost competitive with coal and other fossil fuel-based energy sources.

Moreover, such projects frustrate the goals of the Kyoto Protocol by accelerating global climate change and undermining sustainable development. Coal plants are a primary contributor to global warming not only as a result of greenhouse gases that are emitting during the combustion process, but also due to the substantial indirect emissions of methane -- a highly potent greenhouse gas -- that occur during coal mining.

And coal plants, no matter how efficient, lead to environmental degradation and harm human health. Coal combustion releases dozens of substances known to be hazardous to human health, while coal mining and waste (slurry and ash) wreak havoc on the environment.

There is little doubt that India and China will continue to rely on coal to meet energy demand in the near-term. However, using scarce financial resources to facilitate new coal plants is, at best, short-sighted, and serves only to perpetuate the world's addiction to dirty fossil fuels.

The anticipated efficiency gains that result from super-critical coal technology are minor (natural gas, by comparison, emits half the global warming pollutants of coal), and therefore, hardly sufficient to offset the price we pay in terms of climate, human health and the environment.