(Thanks to Richard diPretoro for making this information available on the WISe network, and thanks to Daphne Wysham of the Institute for Policy Studies for permission to use this material. These articles have been adapted from the Institute for Policy Studies 733-15th St., NW Suite 1020, Washington, DC 20005 Email: Web:

At the same time as the US Senate urges the Clinton Administration to do nothing on climate change until large developing countries like China commit to reducing their greenhouse gases, the US government is spending billions in taxpayer dollars each year via the World Bank on oil, gas and coal projects in developing countries!

China is their number one client. The World Bank is right now considering approval of a $300 million loan for construction of new coal-fired power plants in Hunan province, China.

For those who want more background information on this issue, we provide the following from the Institute for Policy Studies:


In October 1997, Exxon Chairman Lee Raymond spoke at the 15th World Petroleum Congress in Beijing. He urged China to use more, not less, oil, gas and coal, and blamed climate change on nature. It appears that China--and the World Bank--are following Raymond's advice. The World Bank, the world's largest multilateral development bank, is on a fossil fuel spending spree in China. Since last May, the World Bank has approved over $1 billion in loans to three massive coal-fired power projects in China, a country that already burns more coal than any other country.

The burning of fossil fuels--oil, gas and coal--is the primary cause in human-induced climate change. Rich, industrialized countries like the U.S. are responsible for most of the greenhouse gases now in the Earth’s atmosphere; but countries like China will soon surpass the U.S. in their greenhouse gas emissions. We should be spending our development dollars helping developing countries choose a more sustainable energy future, thereby helping all of us save the planet from catastrophic climate change. Instead, as a recent report by the Institute for Policy Studies (IPS) extensively documents, we are:

*Spending our tax dollars fueling climate change while laying the foundation for an increased reliance on fossil fuels in developing countries.


*Funneling our tax dollars through the World Bank to members of the powerful anti-environmental "Global Climate Coalition" which opposes any action on climate change.

*Spending a significant quantity of taxpayer money on coal-fired power projects in China.

*All but ignoring the energy needs of the poorest 2 billion, while favoring of energy for export or for export-oriented industries in developing countries.

Since the first Earth Summit in 1992, when the world's countries pledged to reduce greenhouse gas emissions, the World Bank has spent over $12 billion toward oil, gas and coal projects in developing countries. These investments have a "snow-ball" effect: For every dollar invested by the World Bank, the private sector invests another four to six dollars in the same project. These projects will eventually add a whopping 36 billion tons of carbon dioxide to the atmosphere--about one and a half times ALL global fossil fuel emissions for ALL the world's countries in 1995!

The IPS study estimates that nine out of ten World Bank fossil fuel loans benefit multinational companies based in the powerful G-7 countries (US, Canada, Japan, UK, Italy, France, Germany), such as Exxon, Amoco, Chevron, and Mobil of the US--some of which are also members of the "Global Climate Coalition" (GCC). The GCC has urged the US Senate not to ratify the Kyoto agreement until China and other key developing countries agree to match planned US action on climate change. Meanwhile, GCC member and Exxon Chairman Lee Raymond urges China to increase its use of fossil fuels. This perfect formula for stasis ensures continued profits for the fossil fuel industry, but threatens to scuttle any action by the US or China on climate change, and thus to ensure the world warms to historically unprecedented temperatures, threatening all of us.

Rewarding Human Rights Abusers, Fueling Climate Change in Hunan Province, China

In June 1998, the Bank will consider approving a $300 million loan supporting 1,300 MW of new coal-fired power capacity in Hunan province. Coal is the most carbon-intensive of the fossil fuels. This plant would add another 208 million tons of CO2 to the atmosphere over 20 years. National Power of the UK has been selected to build the 700 megawatt Changsha power plant, one of two Hunan Province plants to which the World Bank's board will consider loaning $300 million at its June 1998 meeting. This loan targets transmission lines from the Changsha and the Leiyang power plants. It includes funding for two new 300 megawatt generators at Leiyang, and the privatization of the Changsha plant. Changsha will be the second power plant ever built and operated by a foreign corporation in China.

The Bank's coal-fired power plans in Hunan Province are significant not only in terms of climate change, but also on human rights ground. A provincial prison gulag holds countless political prisoners rounded up as recently as the last couple of months. After protests swept Changsha following the massacres of students in Tiananmen Square, hundreds of workers, students and professors were arrested and shipped to 10 Hunan prisons where they were beaten, whipped, shackled, shocked, forced to eat excrement, and confined in small metal boxes, according to Asia Watch.



* Visit IPS’ Sustainable Energy and Economy Network worldwide web page <>. Copies of their most recent report, "The World Bank and the G-7: Still Changing the Earth’s Climate for Business," are available on-line, along with names and addresses of Senators, correspondence with the World Bank, and much more. Or you can contact them at: IPS/SEEN, 733 15th Street, N.W., Suite 1020,

Washington, D.C. 20005. Phone: 202-234-9382.


Latest update on this issue


(For Immediate Release, June 25, 1998.

For more information, contact:

Daphne Wysham, IPS, 202-234-9382, x208)

(Washington, DC) Just days before President Clinton's trip to China - where talks will include China’s severe environmental problems - the World Bank granted the Asian giant $330 million for a pair of massive new coal-fired power plants in the Hunan province. The loan comes just as China’s fast-growing greenhouse gas pollution is emerging as the major stumbling block in negotiations on the global warming treaty drafted last December in Kyoto, Japan.

Coal is the most damaging fossil fuel with respect to global warming, and contributes heavily to the air pollution that kills 180,000 Chinese people each year. The plants will produce 208 million tons of CO2 - a major greenhouse gas - over 20 years, according to estimates by the Institute for Policy studies (IPS). Approved on June 18, the new loan is the World Bank's fourth coal project in China in the last year, for a total investment of $1.3 billion.

As the largest donor to the World Bank, the United States is undermining its own stated foreign policy goal of helping developing countries cut their greenhouse gas emissions. While the U.S. remains by far the world's largest greenhouse polluter, China is expected to reach the top spot within a decade or two because of rapid growth fueled heavily by coal. China's soaring emissions have become a central rallying point for treaty opponents in the U.S. Senate and elsewhere.

"The U.S. taxpayer via the World Bank is investing a phenomenal amount in coal burners in China," said Daphne Wysham of the Institute for Policy Studies, and co-author of a recent report on the World Bank and climate change. "These investments are sending China the exact opposite message our climate negotiators are sending, telling China: ‘Let us help you burn as much coal as quickly and cheaply as possible.’ This kind of investment is creating a self-fulfilling prophecy of rising carbon dioxide emissions from developing nations."

This World Bank-supported coal project was pushed through the Board in violation of several of the Bank's own policies. Experts and the public were given half the time required by law to review the environmental impact assessment for the project, and when the U.S. Environmental Protection Agency reported the plants ambient nitrous oxide emissions (a local pollutant) would exceed World Bank guidelines, the Bank asked for, and was granted by the Board a waiver on its own pollution control guidelines.

Last year the World Bank spent nearly $3.84 billion on fossil fuel projects in developing countries and economies in transition. A recent IPS study found that since the first Earth Summit in 1992, when the world's countries pledged to reduce greenhouse gas emissions, the World Bank has spent over $12 billion toward oil, gas and coal projects in developing countries. These projects will eventually add 36 billion tons of carbon dioxide to the atmosphere -- about one and a half times ALL global fossil fuel emissions for ALL the world's countries in 1995.

The study also estimates that nine out of ten World Bank fossil fuel loans benefit multinational companies based in the powerful G-7 countries (US, Canada, Japan, UK, Italy, France, Germany), such as Exxon, Amoco, Chevron, and Mobil of the US. Many of these corporations are also members of the "Global Climate Coalition" (GCC), a fossil fuel industry association that has spent millions to block action on global warming.





News of note, on the Senate, International Financial Institutions (IFIs), developing countries, and climate change:

Following are some excerpts from a letter written by Senator Lieberman (D-CT) to Treasury Secretary Reuben and State Dept Secretary Albright encouraging them "to make every effort to ensure publicly supported lending institutions, both within the United States and in other developed countries, evaluate all projects in developing countries in terms of greenhouse gas emissions."

He commends the US for taking a lead on "initiating efforts to measure carbon dioxide for each project financed" by OPIC, the World Bank and other IFIs, and to move toward lower carbon dioxide emissions in electricity generation as "good first steps."

He then writes: "[IFIs} should adopt policies to ensure that project proponents consider options that will result in lower greenhouse gas emissions than would otherwise result...Most importantly, the information obtained from lending institutions would help demonstrate that developing countries are moving down the path of meaningful participation. We can make real progress in this area before countries sign on to commitments under the Kyoto protocol, which would be an important way to get around the impasse in our country regarding developing world participation..."

He also recommends that IFIs "should adopt policies to ensure that project proponents are required to seek offsets for new greenhouse gas emissions."

On the need for consistency within IFIS: "Of course it is critical that all developed countries participate in this approach with comparable measures in their own international financing institutions, otherwise our companies would be disadvantaged with additional costs compared to their international competitors."

We support Lieberman's call on IFIs --including OPIC, EXIM, and the World Bank--to go further than the minimal calculation of emissions from power projects (which are less than 10% of all emissions they are responsible for, according to our calculations), and evaluate ALL projects for their GHG impacts. Only a full evaluation of ALL GHG impacts will allow for a well-reasoned consideration of climate-friendly alternatives. _