World Bank Group President Jim Yong Kim on fossil fuels: 'Do as I say, not as I do'. Photo: World Bank Photo Collection via Flickr (CC BY-NC-ND).
World Bank doubles fossil fuel funding in four years
Victoria Seabrook / DeSmog.uk
18th April 2016
World Bank President Jim Kim talks a good talk on cutting support to fossil fuels. But what the bank does, writes Victoria Seabrook, is a whole other story. Not only is the WB Group still pouring money into the sector, but its funding doubled between 2011 and 2015.
The World Bank Group invested more than twice as much in fossil fuels in FY 2015 as in 2011, whether measured in absolute dollars or as a percentage of the World Bank Group's total energy portfolio.
The largest development bank in the world is still pouring millions of dollars into oil, gas, and coal projects every year, despite repeated calls by its president to end global subsidies of dirty energy.
The World Bank Group, which provides loans to developing countries, stumped up $313 million just for fossil fuel exploration projects in the 2015 fiscal year alone, according to research by Oil Change International (OCI).
The organisation shelled out over $1.7bn in total in investments for exploration, or projects that included an exploration component, between the fiscal years 2011 - 2015.
"Nobody in their right mind should be funding fossil fuel exploration projects", said Alex Doukas, senior campaigner at OCI. "It's time for the World Bank to stop."
As OCI's report states: "In 2015, the World Bank Group's actions continued to speak louder than its President's strong words on climate change ...
"The World Bank Group continues to invest in exploration for new fossil fuel reserves despite clear signs that we already have far more fossil fuels than we can afford to burn, and over the last five years, the World Bank Group's total fossil fuel finance has trended upwards, with finance into the billions of dollars nearly every year."
The rhetoric goes one way - the money goes the other
The financial flows into fossil fuels fly in the face of repeated calls by the World Bank head to end fossil fuel subsidies. As the World Trade Organisation defines it, a subsidy is a "financial contribution by a government or any public body", including loans and loan guarantees.
In fact, on the same day the OCI analysis was published, the World Bank's president, Jim Kim, warned that climate change rivals migration and pandemics as the major threat to global economy. He urged that current plans to build hundreds of carbon-intensive energy plants must be stopped urgently.
"We are working with countries to make renewables cheaper than coal and push forward efforts to mitigate the effects of climate change", Kim told a press conference on 14th April.
He had previously stated: "We've come together in the shadow of an undeniable truth: We simply cannot afford to continue polluting the planet at the current pace. Unless we drastically cut emissions and do more to help countries adapt, the effects of climate change could push an additional 100 million people into poverty by 2030."
Video: World Could Be 4 Degrees Hotter By End of This Century - by the World Bank.
Yet over the last five years, the World Bank Group's total fossil fuel finance has trended upwards, pushing billions of dollars nearly every year, the OCI research found:
"From FY 2011 to 2015, World Bank Group finance for fossil fuel projects also exhibited an upward trend. While fossil fuel finance declined in FY 2015 in absolute terms, the overall five year trend indicates that World Bank Group finance for fossil fuel projects has increased.
"The World Bank Group invested more than twice as much in fossil fuels in FY 2015 as in 2011, whether measured in absolute dollars or as a percentage of the World Bank Group's total energy portfolio."
It's simple - World Bank must stop funding fossil fuels!
Doukas pointed out that governments around the world agreed under the Paris climate agreement - also known as COP21 - that shifting finance away from dirty fossil fuels and toward renewable energy is an urgent priority. "Yet public finance institutions like the World Bank are using our tax money to bankroll dirty energy investments."
As the report makes clear, "According to the Intergovernmental Panel on Climate Change, at least three quarters of already-known fossil fuel reserves must remain unburned if there is a reasonable chance of limiting climate warming to below 2 degrees C. In light of the Paris Agreement, which enshrines this 2 degree target and indicates that governments will strive to keep warming to below 1.5 degrees, an even higher proportion of already-known fossil fuel reserves must stay in the ground."
Of the 180+ countries that submitted national pledges for climate action before and during COP21, more than 130 work with the World Bank Group.
Doukas said: "The Asian Development Bank has had a ban on financing fossil fuel exploration projects for years. There's no reason the World Bank couldn't adopt a similar policy as a first step toward phasing out all finance for polluting fossil fuel projects."
In 2013, the World Bank urged the "$1,000,000,000,000 in harmful subsidies" to be cut to prevent the fatal effects of global warming in this YouTube video (see embed, above). But as the OCI points out,
"Despite the fact that the world already has far more reserves of oil, gas and coal than we can afford to burn if we hope to avoid the worst impacts of climate change, the World Bank Group - the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA) - continues to finance exploration for unburnable fossil fuels."
- Victoria Seabrook writes about climate change, the criminal justice system, and social justice. She is news editor at independent local newspaper Hackney Citizen, co-editor of Prison Watch UK and a contributor to DeSmog.uk. She tweets @v_seabrook.
- This article was originally published on DeSmog.uk. Additional reporting by The Ecologist.
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