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World Bank Climate Plan Looks to South


WASHINGTON, Apr 12 (IPS) - Large-scale projects such as dams and nuclear power plants, more funding for renewable energy and greater market liberalisation by poor nations are all solutions to climate change, poverty and fossil fuel dependence, according to an internal World Bank document leaked by a non-governmental organisation.

The document, "Investment Framework for Clean Energy and Development", obtained by IPS, will be discussed at the joint spring meetings of the World Bank and the International Monetary Fund (IMF) in Washington on Apr. 22 by the Development Committee, the senior decision-making body of the sister institutions.

It offers the first public glimpse of the potential features of a plan proposed by rich nations last summer to combat global warming and help secure future energy supplies. The strategy could affect billions of dollars in energy investments, and impact the environment and ecosystems around the world.

The document sets a timetable for financing of clean energy projects and climate change adaptation, with a "fast track" of more detailed proposals due in September that would use existing World Bank funding, like the Global Environment Facility, as well as new instruments.

Over the next two to five years, it calls for further research into new technology options, assessment of the environmental, social (including gender) and economic impacts of climate change, and specific country programmes of action.

It notes that just the cost of adapting to climate change is likely to run between 10 and 40 billion dollars per year.

The World Bank input comes amid heightened concerns over global energy prices, and the connection between high energy consumption and climate change.

A study by Science magazine in early March concluded that the Antarctic ice sheet was losing 152 cubic kms of ice each year to the sea around it due to global warming. Another study, also based on data from the National Aeronautics and Space Administration, found that the ice cover in the Arctic Sea is currently at its lowest extent since satellite monitoring began in 1979, and probably the lowest in the past century.

The issue of climate change has gained prominence recently, with growing evidence that global warming is linked to greenhouse emissions and that its effects on both climate and the world's topography are dramatic and potentially catastrophic.

At the Group of Eight (G8) most industrialised nations summit in Gleneagles, Scotland last July, the World Bank was asked to propose a plan for a global transition to a sustainable energy future, which would support energy sector expansion toward the ultimate goals of economic growth and poverty reduction.

But the proposals contained in the leaked World Bank document, which were approved by the Bank's board on Mar. 30, focus more on what developing countries need to do to help stop the phenomenon of climate change than the steps that should be taken by major polluters in industrialised countries.

Among other things, it calls for "removal of broad-based subsidies", "establishment of credible legal and regulatory frameworks", and "creation of market-based approaches such as emissions trading, energy services companies and credit guarantees".

Citing an estimate by the International Energy Agency, the Bank says that 8.1 trillion dollars is needed for the time period 2003-2030 for developing and transition economies to meet their energy needs, which are expected to grow significantly in coming decades. In the electricity sub-sector, only about half of this financing is currently available.

"The extent to which this huge investment gap... can be funded in the future would depend on the pace of policy and regulatory reform, including the measures needed to attract private sector investment in developing and transition economies," the paper says.

The World Bank acknowledges that rich nations "will remain the largest per capita emitters of greenhouse gases", but says that "the growth of carbon emissions in the next decades will come primarily from developing countries".

The International Rivers Network, a U.S.-based non-governmental organisation that leaked the document to the press, says that combating climate change is primarily the responsibility of the industrialised nations, which have a much larger environmental footprint. The per capita use of energy by poor countries is only about five percent of the modern energy services consumed by the world's wealthiest countries.

"They completely let Northern governments off the hook," said Peter Bosshard, a policy director with IRN. "They do not call on them (rich nations) to make any further commitments and rather shift the burden to the South."

Environmentalists, some scientists and a number of independent global institutions say that combating climate change primarily requires action in the North, including much deeper emissions reductions under the second commitment period of the Kyoto Protocol which runs from 2013 and 2017.

The current timeframe of the Protocol, which the George W. Bush administration rejected in 2001 because it doesn't require mandatory emissions cuts by developing nations, obliges dozens of mostly industralised countries to lower greenhouse gas emissions by at least 5.2 percent below 1990 levels by 2012.

Observers also fear that the World Bank, now under the presidency of Paul Wolfowitz, a neo-conservative known for his close relationship with the Bush White House, may be showing for the first time how close it is to U.S. policy.

The United States alone accounts for nearly 25 percent of the global carbon dioxide emissions, yet the document makes little mention of that country's responsibility.

It also talks about how major projects like hydro-electric dams and nuclear plants could help solve the world's environmental and social problems. But both types of energy production have previously come under fire for their social and environmental impacts.

Expanding the use of nuclear power has been one of the Bush administration's answers to tightening energy markets. And despite its traditional concern over nuclear proliferation, the World Bank, an international organisation, advocates nuclear power as one of the alternatives in the document.

The Bank document also restates its traditional advice to poor nations that they must allow greater room for "private participation". It urges countries to give "private ownership and financing a dominant role in energy supply" as an answer to global warming and energy security.

The World Bank notes the importance of renewable energy sources like wind, mini-hydro, and biomass-electric. Yet it makes little mention of repeated requests by green campaigners that the World Bank itself, a public institution, should shift its investments in oil and gas and fossil fuel resources to renewable energy.

The Bank's private sector arm, the International Finance Corporation, devoted only four percent of its total energy lending to renewables last year.

"Rather than devising strategies for other actors, the World Bank should clean up its own act. It should dramatically shift its own energy portfolio to energy efficiency and new renewable technologies," said IRN in a critique of the document.


Expert opinion

Halter Marek


Halter Marek
Le College de France
Olivier Giscard dEstaing


Olivier Giscard dEstaing
COPAM, France
Mika Ohbayashi


Mika Ohbayashi
Institute for Sustainable Energy Poliy
Bill Pace


Bill Pace
World Federalist Movement - Institute for Global Policy
Peter I. Hajnal


Peter I. Hajnal
Toronto University, G8 Research Group

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