The World Bank’s latest report on climate change, “Turn Down the Heat,” warns that the planet is on track for a four-degree Celsius temperature rise by 2100. Like many scientists, the bank fears that such an increase would be incompatible with civilization as we know it. At the very least, rapid global warming—and the storms, droughts and other extreme weather it would unleash—would render the bank’s mission of alleviating poverty and fostering sustainable development impossible.
“This report is a stark reminder that climate change affects everything,” World Bank President Jim Yong Kim writes in the forward to the report, which was authored by the Potsdam Institute for Climate Impact Research. “The solutions lie in ensuring all our work, all our thinking, is designed with the threat of a 4°C degree world in mind. The World Bank Group will step up to the challenge.”
So far, so good. But how exactly will the World Bank “step up?” The answer, shockingly, is nowhere to be found in this report, and a review of the Bank’s history on climate issues raises many red flags.
In 1992, at the Rio Earth Summit, when the scientific community warned that a climate crisis was imminent, the World Bank was charged with the task of marshalling the funds to address the emergency. But instead, over the next two decades, the bank invested roughly $48.8 billion not in clean energy, but in dirty fossil fuel projects in the developing world. Over the same time period, the Global Environmental Facility, housed at the bank, invested only $3.5 billion in climate change mitigation projects.
In 2005, researchers at the Institute for Policy Studies calculated that from 1992 to 2004, the World Bank had financed fossil fuel projects around the world that would release the equivalent of almost two year’s worth of global greenhouse gas emissions over their lifetimes. Our research found that virtually none of this financing would meet the energy needs of the planet’s poorest 2 billion people, nearly all of whom lived without access to electricity. Instead, the projects would power export-oriented heavy industry and urban areas and bolster the bank accounts of wealthy corporations like Exxon and Halliburton.
The World Bank responded to our report by challenging our methodology. We challenged its in return and demonstrated that its analysis was deeply flawed. The bank counted only the so-called “point source” emissions from power plants they financed, ignoring the full life-cycle carbon accounting that is standard procedure in most analyses. Pressured to conduct its own review, the Bank issued a 2004 report that showed that the global poor were actually harmed by the bank’s fossil fuel investments, not helped. That 2004 report further urged the bank to stop financing coal immediately, get out of oil by 2008 and rapidly ramp up its investments in renewable energy sources.