Co-authored with Vrinda Manglik, Sierra Club Associate Campaign Representative, International Clean Energy Access
The World Bank released a new report on Sunday sounding the alarm that climate change impacts, such as extreme heat events, may now be "unavoidable". The report concludes this based on the growing evidence that exists today and confirms that "warming close to 1.5°C above pre-industrial levels is locked into the Earth's atmospheric system due to past and predicted emissions of greenhouse gases." Despite the World Bank's own recognition of the threat, and the renewed call for global leaders to act, the World Bank has yet to take the leadership to adopt sound climate policy and to stop funding fossil fuels. As a result, President Kim of the World Bank is ensuring his mission of ending poverty will fail.
The third issue of the "Turn down the heat" report informs us that, among other impacts, the agricultural productivity, hydrological regimes and biodiversity will be largely affected in Latin America and Caribbean due to heat extremes and changing precipitation patterns. The report concludes that, in Brazil alone, at 2°C warming, crop yields could decrease by up to 70 percent for soybean and up to 50 percent for wheat. The Middle East and North Africa will be faced with more scarce water resources that, in turn, will have major consequences for regional food security. The whole ordeal that comes with further warming will result in more migration, while the "climate-related pressure on resources might increase the risk of conflict," the report finds. On the other hand, forest dieback and thawing of permafrost in Russia could result in the stored carbon and methane being released into the atmosphere, thus threatening to further amplify global warming.
Video caption: How coal plants in South Africa kill. Medupi coal plant is financed by the World Bank. (Video credits: Sourced TV)
The new report has been released just a few days before governments gather in Lima for critical negotiations on a new climate treaty, which is sought to be finalized next year in Paris. Presenting the new report, President Kim of the World Bank said that "global leaders will need to take difficult decisions that will require, in some instances, short term sacrifice but ultimately lead to long term gains for all." He also pledged that the Bank would be innovative and "bring forward new financial instruments" to tackle climate change.
The World Bank's current developmental mission is to end extreme poverty and to promote shared prosperity in the world. In this latest report, the Bank already admits that achieving this would be seriously affected by further global warming and practically impossible if world leaders fail to act.
Nevertheless, the Bank's own investment portfolio and policies in place that result in the current investment outcomes are far from matching the urgency, raised by President Kim himself, to act on climate. The Bank is currently reviewing, for the first time in the history of its existence, its environmental and social policies. Climate change has been identified in this process as an emerging issue. Civil society organizations submitted to the Bank a detailed model policy on climate change, asking President Kim and the management to adopt it as part of the new policies.
When management published the first draft of new policies in July, CSOs were astonished to see only a couple of lines on climate change in the whole new set of policies. Almost half of Bank's investment portfolio, known as the Development Policy Loans (DPL) and Program for Results (P4R) portfolios, won't be covered at all by any climate policies. For the part of portfolio that is covered, the policies don't require any assessments to identify potential climate change impacts on the resilience of host communities and ecosystems. CSOs rejected the new draft and asked the Bank to withdraw it to address real needs vis-à-vis climate change. Dr. Kim himself has pledged in one of his public forums to address these CSO calls.
Video caption: Affected communities representatives speaking against the Tata Mundra coal project in India, financed by IFC. (Video credits: CIEL)
Besides not addressing climate issues systematically in its policies, the Bank's portfolio continues to inlclude investment in fossil fuel projects. In 2010, the World Bank approved a $3.75 billion coal power project for South Africa. The new 4,800 MW coal power plant, the fourth largest in the world, will come online and start polluting more in the next few months. On the other hand, the Bank's private lending arm, International Finance Corporation, continues to finance the Tata Mundra project, a 4,000 MW coal plant, in Gujarat, India. President Kim has, in many instances, declared that the Bank will continue financing coal and has called this approach a difficult "trade-off" that will be embraced in the countries where other options of energy don't exist. Kosovo seems to be the next country where the Bank is set to invest more money into coal and the institution is eyeing countries in Africa for possible such projects in the future. According to a study by Oil Change International on subsidizing coal, the Multilateral Development Bank that provides the most coal funding is the World Bank Group with $6.1 billion between the years of 2007 - 2013.
Furthermore, the Bank has been criticized for failing to improve energy access. In October of this year, Sierra Club and Oil Change International issued a new report with data about how the Bank investments are not distributed in the manner most likely to end energy poverty. Despite having a nearly $4.1 billion dollar annual energy portfolio, the World Bank has failed to pony up a meager $500 million in investment for beyond-the-grid clean energy markets.
With such poor performance, CSOs are asking President Kim of the Bank to walk the talk on climate and steer the World Bank away from investing further into global warming. When the Bank has recently highlighted the significant quantifiable economic and development benefits of taking even modest action on climate change, it is problematic and borderline hypocritical, that such analysis and messaging is not being matched by the Bank's own core operational policies. As President Kim calls on the world leaders to take difficult actions, it's time that he leads by example and introduces strong climate policies that would allow for the Bank to stay away from more carbon intense projects. As long as the Bank invests into more carbon pollution, its mission of ending poverty will be mission impossible, as Bank's own report warns.