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When push comes to shove, who really defines the green agenda?

Finance Blogger: Anthony Harrington Anthony Harrington

One of the problems with green politics is that for the leading nations it is always so much easier to instruct others on the necessities of cutting emissions than it is to make deep cuts themselves. The unseemly spat over the World Bank’s $3.75 billion loan to the South African power giant Eskom for its Medupi power station, with both the UK and the US initially objecting to the project and blocking the funding, is a prime case in point.

South African cities are already experiencing frequent brownouts because of weaknesses in the country’s electricity grid, which the Medupi plant is designed to address. The loan is the World Bank’s first major engagement with the South African government since the fall of apartheid 16 years ago. The project, generally speaking, would be considered a good thing for the South African economy by the world at large, if it were not for the fact that the Medupi plant is a coal-fired plant. Even with the latest technology planned for the plant, it still contravenes what the US and the UK consider to be “desirable.” Gas-fired plants are desirable. But South Africa is rich in coal, not in natural gas.

The fact that both the US and the UK still have and operate far dirtier plants is not the point. We are in an idealistic space here and the problem with idealistic spaces has always been that they define their own premises, which have a habit of wandering away from what the rest of the world thinks of as practical reality.

If you are designing the world from scratch, why not insist on the greenest possible solutions? The obvious answer is that sometimes one has to go for the more immediately practical solution or nothing gets done. In the case of South Africa, doing nothing would be economically disastrous. As a general point, this is precisely why business and the various regulatory regimes often butt heads, despite the best efforts of business to comply. It is not that one side is wrong and the other right, it is simply that their different perspectives on a particular issue are on a collision course because each is working off different premises.

Within a country, when business and the regulatory regimes clash and business says: “If I do that I can’t make a profit,” the regulator can simply reply “Tough, it’s my way or the highway…” Pose the same problem at the national level and it gets very much more difficult since the issue of who, ultimately, has the power, is so much less well defined. Neither the UK nor the US want to be in the hugely unpopular position, as far as the developing world is concerned, of playing the “heavy” and blocking growth, yet both (the UK rather more than the US so far) are committed to doing something to prevent runaway global warming, which would be catastrophic for everyone and particularly for the developing world.

If, say 50 years from now, the world is being hammered by extreme weather events and rising sea levels, and some scientist somewhere works out that the Medupi project was the point where the “green” agenda faltered and failed, we’ll all have a very different view of things. But the probabilities of this being the case, from our current standpoint, look vanishingly remote. It is the World Bank’s job to fund development projects. Whether it is the West’s job to hold a green magnifying glass to those projects and to block them wherever the pure green light seems somewhat tainted, is a much more debatable proposition. Regulation at the supra-national level needs a great deal of common sense and a willingness to accept that sometimes three steps forward, two steps backwards, is the best speed available.

Further reading green development

Tags: developing world , fossil fuels , global warming , green agenda , power generation , regulation , sustainability
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