A New York Times article described the Tata loan agreement as illustrative of the “troubling tension” between driving development and curbing climate risk in a world still wedded to fossil fuels.
The $450-million loan from the International Finance Corporation, a branch of the World Bank, with the Asian Development Bank, Korea, and other backers, was for a planned $4 billion, 4,000 megawatt coal-burning power plant in Gujarat state.
The decision by the bank’s board of directors comes even as former Vice President Al Gore and NASA climate scientist James E. Hansen call for a freeze on new coal-plant construction in the United States unless the emissions can be captured. Still others contend that India and China need not follow the Western norm of building prosperity on fossil fuels.
China and India are the world’s most populous nations and their energy use is projected to double from 2005 to 2030. By 2030, they will account for nearly half the 55 per cent increase in global demand. Both have resisted calls to limit emissions, saying energy use per person is still much lower than in industrial nations.
What’s desperately needed is funding for new research, but as the Tata loan illustrates, subsidies still cater to the burning of fossil fuels.