World: Environmentalist Accuses World Bank of Fuelling Climate Change Chaos
By Shadrack Kavilu
A new report released by Friends of the Earth International shows that the World Bank Group has been increasing its investments in fossil fuels and promoting corporate-led false solutions to climate change, including carbon trading, that serve to deepen rather than alleviate the current environmental crisis.
The report, 'Catalysing Catastrophic Climate Change', follows widespread concerns voiced by developing countries about the growing role of the World Bank in delivering climate finance.
The report released early this month shows how the Bank’s dirty fossil fuel financing is on the rise, locking countries such as India and South Africa into an even greater reliance on coal.
The report accuses the global financial institution of driving the expansion of carbon markets, an escape hatch for rich industrialised countries from cutting their emissions, whilst causing ecological damage and the displacement of communities in the global South.
It shows that in 2010 the Bank hit a new record in terms of its fossil fuel funding, totaling US$6.6 billion, accounting for 116 per cent increase over 2009. US$4.4 billion of this total was invested in coal, also a record high, and a 356 per cent increase over the previous year.
And despite negative environmental, social, and climate change impacts, the World Bank is
significantly scaling up support for large hydropower projects in different parts of the world.
The report notes that despite the Bank’s lending for highly unsustainable projects around the world, it is seeking an influential role in the UN’s new Green Climate Fund and in mechanisms to reduce emissions from deforestation and forest degradation (REDD).
“The World Bank is part of the climate problem, not the climate solution. Its conflicts of interest, and appalling social and environmental track record, should immediately disqualify it from playing any role whatsoever in designing the Green Climate Fund, and in climate finance more generally,”said Sebastian Valdomir, Friends of the Earth International Economic Justice Programme Coordinator.
The World Bank has been accused of having a conflict of interest with regards to serving as both the interim trustee of the Green Climate Fund (fiduciary function) and on the Technical Support Unit designing the fund (consultancy function). In effect, the report points that the Bank would be designing a fund that is meant to oversee its own activities.
In April 2010, the World Bank approved a massive US$3.75 billion loan, the overwhelming majority of which will finance the 4,800 megawatt Medupi coal-fired power plant being built by Eskom, South Africa’s state-owned power utility.
The loan will lead to 40 new coalmines opening up to feed the Medupi plant and related projects. South Africa is currently responsible for 40 per cent of all of Africa’s greenhouse gas emissions, and this loan will add to these emissions.
The World Bank’s private lending arm, the IFC, approved investment of US$450 million for the Tata Mundra 4,000-megawatt coal-fired power plant in Gujarat, India, which is expected to emit an estimated 25.7 million tons of Carbon Dioxide annually for at least 25 years.
The World Bank’s fossil fuel lending practices and propagation of false solutions to climate change, such as carbon trading and large dams, should lead to its exclusion from any role in designing the UNFCCC’s Green Climate Fund.
The World Bank has been increasing investment in large hydropower since 2003, following a lull in such investment in the 1990s, despite that dams have already displaced 40 to 80 million people.
Friends of the Earth International calls for climate finance that is derived from assessed budgetary contributions and other non-market-based innovative sources like financial transaction taxes that are
commensurate with rich countries’ disproportionate role in creating the problem of climate change.
Kate Horner, a policy analyst at Friends of the Earth said the World Bank increasing role of providing leadership on climate change, as shown in this report, is a major funder of dirty fossil fuel projects, carbon trading and mega dams.
“These initiatives deepen poverty and push us closer to the brink of a global environmental disaster,” she observed.