trends and future of sustainable development - TransEco

and programs both reflect and shape global agendas on how countries should develop their energystructure and run their economies. (Florini & Sovacool, 2009) In relation to current energy policy it is ofgreat importance to understand how World Bank is articulating the relationships between the currentmain three energy objectives - energy security, climate change mitigation and access to energy for thepoor.World Bank and other Multilateral Development Banks view electrification as necessary componentof poverty alleviation and development, but the argumentation on which the development banks basetheir energy policies have changed from decade to decade. In 1980s the banks basically only fundedconstruction of energy infrastructure funding mostly coal, oil and gas projects. In early-1990s a newpolicy focus emerged; the banks began to emphasize the importance of privatization of state monopolies.The Banks started lobbying for the restructuring of public energy services, privatization of state-ownedelectricity companies and increasing share of private investments. The hopes for privatization were sohigh that donor spending on infrastructure fell: the World Bank’s lending for energy infrastructureinvestment declined by 50% between 1993 and 2002. Also during this period by far most funding wentto fossil fuel projects and gird extension. At the end of 1990s faced by severe criticism especially fromenvironmental groups the banks began to integrate environmental and poverty reduction concerns totheir energy policy. (Kaisti & Käkönen 2010.)Besides privatization, also another major change began at the end of 1990s and early 2000s, namelya climate turn in World Banks energy portfolio. World Bank had been strongly criticized for the climateimpacts of the fossil fuel projects the Bank was financing in the developing countries and the Bank beganto emphasise more clean energy and climate-friendly low carbon solutions including different renewableenergy and energy efficiency projects. Also the price of oil increased rapidly which made the Bank evenmore interested in renewable energy. Even nuclear is a recommended low-carbon option for somecountries especially in East Asia, even though the banks are not ready to fund it themselves. This in theWorld Bank vocabulary is called clean energy revolution. (World Bank 2010, 1)These tendencies have been manifested in the responses of the World Bank to the ExtractiveIndustries Review (2003) which was commissioned by the Bank itself and in which the criticism theBank had faced very much culminated. The Review called the World Bank to re-consider its projects thatmost strongly contribute to climate change – particularly projects on oil and coal extraction. It alsorecommended an immediate moratorium on coal, a phasing out of investments on oil by 2008 and thatthe resources to energy investments should be devoted to renewables. In the following year there was aseries of responses from the World Bank Group’s side. It referred to its past commitments byannouncing that since 1990’s it had directed $6 billion to renewable energy and energy efficiencyinvestments (World Bank 2004a). In the report World Bank Group also announced its futurecommitments by stating that it was “committed to nothing less than a revolution in the rate and scale”of investments to renewables (World Bank 2004a, 2) Very soon after this the targets were specified in apress release were it was announced that the WBG will commit 20% annual increase in finance ofrenewable energy and energy efficiency projects (WBG 2004b). This target has been later started to becalled as the Bonn Commitment. After the bold announcements of Bonn Commitment the Bank wasfaced with contestations that question the figures WBG had presented. One report from SustainableEnergy and Economy Network (SEEN) accused World Bank Group for “renewable deception” (Valletteet al. 2004). The SEEN report claimed that according to their calculations of $6 billion only 1,65 billion111