Following the release of the Intergovernmental Panel on Climate Change’s (IPCC) ‘final warning’ report on the climate crisis, UN chief António Guterres warned:
Our world needs climate action on all fronts: everything, everywhere, all at once.
Recent criticism of the World Bank suggests, however, that some other international institutions are not exactly embracing Guterres’ instruction. According to the development finance-focused nonprofit Recourse and other organisations, the World Bank has failed to align its investments with the Paris Climate Agreement. Moreover, they say its investments in Asia specifically are locking countries there into fossil fuels.
World Bank alignment with Paris goals
The World Bank Group (WBG) released its Paris Alignment Method for Development Policy Financing in March. In layman’s terms, this is the bank’s guidance for making sure its investments fit with the Paris climate goals.
The release came just ahead of the IPCC report’s publication. That report made clear that any more fossil fuel infrastructure, meaning any attempt to find and burn new sources of fossil fuels, would likely lead to global warming higher than 1.5C. Trying to limit warming to below this 1.5C threshold is a core goal of the Paris Agreement.
As the IPCC report highlighted:
Projected CO2 emissions from existing fossil fuel infrastructure without additional abatement would exceed the remaining carbon budget for 1.5C.
In other words, burning existing fossil fuels is enough to push warming above 1.5C, let alone new sources of dirty energy.
Nonetheless, the World Bank’s guidance for aligning its investments with the Paris goals doesn’t exclude support of fossil fuels overall. As Recourse has highlighted, it only limits support for coal.
Highlighting that the IPCC has stressed the need for “transformational change”, Recourse’s campaign manager Fran Witt said:
Sadly, the World Bank’s new guidance is far from transformational. Continuing to provide funding, guarantees and policy support for fossil fuels is simply fuelling the fire of the climate crisis.
While there are some positive moves in this new guidance, it is beyond belief that the World Bank’s definition of ‘low carbon’ allows so much space for fossil gas expansion and dangerous false solutions like Carbon Capture and Storage. In light of the IPCC’s stark warning that we have one last chance to limit global warming to 1.5C, this was an historic opportunity for the Bank, but these documents suggest that opportunity has been missed.
Carbon lock-ins
The World Bank’s new guidance frequently refers to “carbon lock-in”, which it generally suggests is non-aligned with the Paris Agreement. It explains that this lock-in occurs when:
an operation supports reforms, investments, institutions, or behaviors that will persist in the future in an emission-intensive way and hinder the transition to low-GHG emission development pathways, even when alternatives with lower GHG emissions become technically feasible and economically viable [i.e., it creates persistent barriers to the transition].
However, the bank itself stands accused of locking Asia into fossil gas. Climate and human rights campaigners have pointed to the WBG’s involvement in the construction of a liquified natural gas (LNG) terminal in Pakistan, along with funding from the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA) related to power plants in Bangladesh, among other projects. IFC and MIGA are members of the WBG.
Coastal Livelihood and Environmental Action Network-Bangladesh’s (CLEAN) chief executive Hasan Mehedi said:
Volatile fossil gas prices are driving Bangladesh into an energy crisis. What we need urgently is to transition to sustainable, renewable energy. The WBG and the other MDBs must honor their commitments to the Paris Agreement and stop justifying fossil gas as a transition fuel.
The Canary contacted the World Bank for comment. It did not respond by the time of publication.
A rapidly closing window of opportunity
Recourse has pointed out that the WBG has “financed and incentivised” fossil fuel investments to the tune of $165bn since countries signed the Paris Agreement. In a recent report, the organisation – along with TrendAsia and the Center for International Environmental Law – urged the World Bank to:
shift its financing policy and practice from fossil fuels investments towards supporting renewable energy economies
As the IPCC report makes clear, it’s now or never for meaningful climate action. Globally, greenhouse gas emissions need to drop by 50% by 2030. We have “a rapidly closing window of opportunity to secure a liveable and sustainable future for all”, according to the IPCC.
Support for new fossil fuels by the World Bank or anyone else squanders this opportunity to the detriment of all.
Featured image via b k / Flickr, cropped to 770×403, licensed under CC BY-SA 2.0
This post was originally published on Canary.
