World Bank track record continues to falter: leadership doubts climate impact while still funding fossil fuels despite 2019 ban, new study shows
New analysis shows contradiction in the World Bank’s funding patterns against their stated commitments to climate change.
A study released by a group of 50 nonprofits earlier this month finds that the Bank continued to fund fossil fuel projects despite its announced phaseout in 2019.
The Big Shift Global is a group that advocates for international economic institutions to stop funding fossil fuels. Their study, “Investing in Climate Disaster: World Bank Finance for Fossil Fuels,” points out that since the Paris Agreement in 2015, the World Bank has funneled $14.8 billion to projects involving fossil fuels.
The authors analyzed the “‘top ten’ financially largest direct loans or support by the [World Bank Group] in the period of fiscal years 2018–2021,” and highlighted another five smaller financial contributions that had a sizable climate impact.
The Bank announced that as of 2019, it would stop funding any coal or upstream oil and gas projects. However, the report authors find several projects that support these fuels after 2019 — some as recent as this year.
World Bank proceeded with projects known to have climate impact
The report points out several negative climate and social outcomes. The 2018 Trans-Anatolian Pipeline, for example, running from Azerbaijan to parts of Europe, was expected to have a significant climate and local pollution impact in its Environmental and Social Risk Assessment, conducted by a branch of the World Bank.
The pipeline was approved, despite “potentially significant adverse social and environmental impacts that are diverse, irreversible and unprecedented,” as stated in the Bank’s Assessment.
The Bank’s assessments did not consider greenhouse gas emissions for this pipeline and several other projects, according to the report.
Report author, Kat Kramer, tells the Guardian, “The World Bank takes a leadership role, and in some cases can provide just a small amount of support that facilitates much bigger investment from elsewhere. They have huge amounts of leverage, and we have found many cases where that has been used unhelpfully, in climate terms.”
Despite that leverage, some projects turned out not to deliver on the economic gains they promised.
In a deal with Exxon, Guyana was expected to receive 50% of the profits, but may only end up with 12% after Exxon finishes charging development costs to the government. Ghana is also on the hook to pay for an oversupply of fossil fuel energy that it cannot use (yet still faces severe power outages).
The World Bank is a development institution, created to provide financial support for lower-income countries to strengthen their economies. Big Shift Global believes the Bank can revert course on this if it “shift[s] all [its] money out of dirty fossil fuels and into sustainable, renewable energy to benefit the most vulnerable and remote communities.”
Banks’ recent climate remarks further instill doubts from US leaders
This study came out shortly after World Bank president David Malpass expressed doubts about climate change at a New York Times event last month, facing heavy backlash.
When asked if he believed the burning of fossil fuels is warming the planet, Malpass dodged the question multiple times before finally stating, “I don’t even know. I’m not a scientist.”
He later publicly apologized, though these comments have still led to calls for his resignation, including from 27 U.S. House Democrats and former Vice President, Al Gore. In a letter to President Biden, House Democrats stated, “it is unacceptable for David Malpass, as President [of] this leading international development institution, to be so brazenly ignorant toward the impacts of the climate crisis.”
At a White House press briefing, press secretary Karine Jean-Pierre condemned Malpass’s statement, saying “we disagree with the comments made by President Malpass. We expect the World Bank to be a global leader of climate ambition and mobilization as well of significantly more climate finance for developing countries.”
Jean-Pierre did not comment on the White House’s stance regarding the calls for Malpass’s resignation, POLITICO reported.
Malpass has until 2024 to serve the position’s 5-year term since assuming the role in 2019. Many are already looking ahead to who may take his place when that time comes.
