Eberhard Rhein is the former chef de cabinet for external relations at the European Commission. He often blogs on climate and energy issues on EurActiv's associated platform BlogActiv.eu.
"Coal-fired power plants have repeatedly be shown to be the worst emitters of greenhouse gases. The United States, China, India, Australia, Poland and many other countries all depend on coal for either exports or energy production.
It is therefore urgent to curb their emissions by:
- setting strict CO2 standards;
- subjecting bank loans for power plants to strict emissions standards.
The USA is attempting to follow the first approach.
In future, its power plants will have to respect a cap of 500g CO2/kWh. That is what highly efficient gas-fired plants emit. Coal-fired power plants will have to be equipped with carbon capture and storage equipment (CCS), which is expensive and risks making them uncompetitive.
The European Investment Bank is following the second approach.
It has most recently decided to tie loans for power plants to the respect of a strict emission standard of 550g CO2/kWh, more or less equivalent to the new US standards. That will probably end financing for new coal-fired power plants in the European Union.
The World Bank has reduced its lending for coal-fired power plants to a minimum. But other development banks, in particular Chinese and Arab ones, continue financing without a care for emission standards.
To tackle the issue globally, all global and regional development banks should apply strict emission standards for lending to the power sector and concentrate their lending on gas, wind, solar and biomass power plants.
The World Bank should rapidly take the initiative for such a deal to which major private lenders should be associated in a second stage.
By the end of 2015, in parallel with the decisive International Climate Conference in Paris, such a deal should be in place. It would be one of the most effective tools in the fight against climate change and make often politically difficult regulation by individual governments largely superfluous."