ON EVE OF CLINTON VISIT,
WORLD BANK GRANTS CHINA $330 MILLION FOR 
HIGH POLLUTING COAL PROJECT

For more information, contact:
Daphne Wysham, IPS, 202-234-9382, x208
Email: dwysham@seen.org

(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 the plants' ambient nitrogen oxide emissions (a local pollutant) will exceed the World Bank's 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.

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