Filipinos slam AIIB for allowing investments on coal in its Energy Strategy
Philippine civil society organizations, environmental groups and people’s organizations were left dismayed after the Asian Infrastructure Investment Bank (AIIB) revealed its Energy Strategy to the public, which specified that it will continue to fund coal, subject to conditionalities set up by the Bank.
In an open letter submitted to the Bank’s Board of Governors days before the Energy Sector Strategy was presented, Philippine CSOs have already called upon the AIIB to stop funding dirty, deadly, and costly energy projects such as those reliant on fossil fuel and nuclear energy. Emphasis was given to funding on coal, which have been cited as among the leading sources of Greenhouse Gas (GHG) emissions, one of the primary causes of man-made climate change.
“We are dismayed that after rounds of public consultation, the AIIB has opted to continue funding dirty energy, even if it boasts of being a ‘lean, clean, green’ bank,” said Center for Energy, Ecology and Development Convenor Gerry Arances. “The continued financing of coal is a failure from the part of the AIIB to distinguish itself from other financing institutions like the World Bank and the Asian Development Bank, which have been tagged as enemies of the environment and climate due to their continued support for dirty energy,” said Arances.
“Financing coal also makes little economic sense, especially for citizens who will be paying more and more for it, as coal is set to become ‘stranded assets’ given the declining cost of renewable energy and the hazards and risks attached to coal energy projects.” he continued. “This means that Filipinos will spend decades paying higher for energy from coal, when they could be paying less by incoporating more renewable energy in the mix,” Arances explained.
The Energy Sector Strategy noted that: “Carbon efficient oil- and coalfired power plants would be considered if they replace existing less efficient capacity or are essential to the reliability and integrity of the system, or if no viable or affordable alternative exists in specific cases,” a caveat that Philippine civil society has found unacceptable.
“In including acceptable conditions for coal to be financed, the AIIB has left the door open for policymakers and companies who intend to disregard the externalized costs of coal to the environment, livelihood and health of affected communities,” said Atty. Aaron Pedrosa of Sanlakas.
“A study by Harvard University has shown that the construction of new coal projects could lead to over 70,000 deaths in Southeast Asia alone by 2030,” Pedrosa added. “And the deadly effects of coal use and production are already being felt in a terrifying scale across the nation,” Pedrosa continued.
Pedrosa expressed that financing “clean-coal” is convenient from the perspective of business, but points out the doublespeak in the AIIB’s position on coal investments, given China’s recent phaseout of coal projects. “Due to clamor of the Chinese population against massive air pollution, Chinese investments on renewables have boomed while coal plant retirements have taken place in China at an unprecedented rate. It is quite ironic that despite China being the main architect of the AIIB, it will continue to fund coal investments.”
Philippine CSOs expressed their dismay along with other non-government organizations and grassroots communities across Asia in an open-letter submitted to the AIIB.
There is still time to change the game
However, in the Opening Ceremony of the 2nd Annual Meeting of the Board of Governors Jeju South Korea today, AIIB President Jin Liqun stated that the Bank will continue to “promote clean and efficient energy generation transmission and distribution,” and “help members meet NDCs under the Paris agreement,” recognizing its “role to play as supporter and facilitator of a transition towards a low carbon economy.”
In his speech, President Jin highlighted that currently there are no coal projects in the Bank’s pipeline, and that it will not consider any project if we are concerned about their environmental and reputational impact. “We welcome the positive take on coal expressed by the President, but it is not what the Energy Strategy Paper is saying,” said Arances.
“As there is awareness from the part of the President on the dangers and risks inherent in coal, there might still be a chance for the Bank to shift its gears and abandon coal investments until the Annual Meeting adjourns,” Arances continued. “We challenge the AIIB President to have this anti-coal perspective reflected in the Bank’s Energy Strategy. There is still time to change the game,” he concluded.