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Multilateral energy lending and urban bias in autocracies: promoting fossil fuels

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Mitigation and Adaptation Strategies for Global Change Aims and scope Submit manuscript

Abstract

Energy demand is growing rapidly across the world, and international funding agencies like the World Bank have responded by emphasizing energy in their project portfolios. Some of these projects promote the use of fossil fuels, while others support cleaner forms of energy. For climate change mitigation, it is important to understand how international funders decide on the choice between fossil fuels and cleaner sources of energy. Examining the energy funding portfolios of the nine most important international funders for the years 2008-2011, we show that funding for fossil fuels has been concentrated in highly urbanized autocracies. Due to economies of scale, fossil fuels are suitable for generating heat and electricity for densely populated urban areas. Autocratic rulers are subject to urban bias in their policy formulation because the support of concentrated urban constituencies is key to an autocrat’s political survival, and in democracies environmental constituencies can effectively oppose fossil fuel projects.

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Notes

  1. The data we use are from the Shift the Subsidies database, available at http://shiftthesubsidies.org/. Accessed November 5, 2012.

  2. These agencies include three institutions that belong to the World Bank Group – International Finance Corporation, International Development Association, and International Bank for Reconstruction and Development – and six other international or regional lending institutions: African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, and Multilateral Investment Guarantee Agency.

  3. For Pakistan, see “Pakistan to Tap Coal Riches to Avert Energy Crisis.” Reuters April 13, 2012. Available at http://www.reuters.com/article/2012/04/13/pakistan-coal-idUSL6E8FC45O20120413. Accessed November 5, 2012. For Vietnam, see “Vietnam Coal Mining: A Bright Future Ahead”. http://www.vinacomin.vn/en/news/Home-News/Vietnam-Coal-Mining-A-Bright-Future-Ahead-227.html. Vietnam National Coal – Mineral Industries Holding Corporation Limited Press Release. Accessed June11, 2014.

  4. “Srikakulam Still Tense After Police Firing.” Siasat Daily July 15, 2010.

  5. “Nagarjuna Construction May Relocate Andhra Power Project.” Economic Times September 10, 2010.

  6. The dataset is available at http://www.shiftthesubsidies.org/subsidies. Oil Change International, in a partnership with CEE Bankwatch Network and Bank Information Center, collected the data.

  7. For a detailed discussion of the coding, see http://shiftthesubsidies.org/methodology.

  8. For more information on each project, see http://www.shiftthesubsidies.org/projects/636, http://www.shiftthesubsidies.org/projects/84, and http://www.shiftthesubsidies.org/projects/191.

  9. The electricity consumption data are available at http://www.eia.gov/electricity/data.cfm. The oil production, coal production, and dry natural gas production are available at http://www.eia.gov/petroleum/data.cfm, http://www.eia.gov/coal/data.cfm, http://www.eia.gov/naturalgas/data.cfm, respectively.

  10. For regional classification, we follow the United Nations Statistics Division’s composition of geographic regions. See http://unstats.un.org/unsd/methods/m49/m49regin.htm.

  11. “Frequently Asked Questions”: Tata Mundra Project. Available at http://www.ifc.org/wps/wcm/connect/region_ext_content/regions/south+asia/countries/frequently+asked+questions. Assessed June 12, 2014.

  12. For a list, see http://shiftthesubsidies.org/projects and select Pakistan from the map that appears. Accessed November 6, 2012.

  13. The data source for population in the largest city is the World Development Indicators, http://data.worldbank.org/indicator/EN.URB.LCTY.UR.ZS.

  14. See http://www.prsgroup.com/about-us/our-two-methodologies/icrg.

  15. This dataset is available at http://info.worldbank.org/governance/wgi/index.aspx.

  16. The net energy generation and the net energy capacity variables are from the U.S. Energy Information Administration’s database available at http://www.eia.gov/countries/data.cfm, and the T& D losses data are from the World Bank database available at http://data.worldbank.org/indicator/EG.ELC.LOSS.KH.

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Authors and Affiliations

  1. Columbia University, 420 West 118th Street, 712 International Affairs Building, New York, NY, 10027, USA

    Sung Eun Kim & Johannes Urpelainen

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  1. Sung Eun Kim
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  2. Johannes Urpelainen
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Correspondence to Johannes Urpelainen.

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We thank Jeremy Wallace, Alice Xu, Sana Ouji, and the anonymous reviewers for comments on a previous draft.

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Kim, S.E., Urpelainen, J. Multilateral energy lending and urban bias in autocracies: promoting fossil fuels. Mitig Adapt Strateg Glob Change 21, 167–190 (2016). https://doi.org/10.1007/s11027-014-9587-y

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