The World Bank is calling for an end to fossil fuel subsidies, but at the same is increasing its support for the development of polluting energies, thus mining its credibility as a global leader in sustainable development.
During the World Bank’s Spring Meeting held in Washington DC in April, the Bank’s President Jim Yong Kim announced a five-point plan to cut fossil fuel subsidies and guarantee a sustainable growth.
However, a new report by Oil Change International (OCI) reveals that the World Bank’s institutions have spent US$3.4 billion last year to support the development of fossil fuels, 22% more than in 2013. The report also shows that they are still subsidising coal-fired power plants – even though they pledged not to do so unless there was no alternative – and funding further exploration for fossil fuels. This proves a serious inconsistency in the financial institution’s approach towards energy supply, and comes as a massive blow in its credibility as a global leader in sustainable development.
It is crucial that the World Bank’s activities match its statements on climate action, especially when it comes to climate finance for developing countries, but rather than keeping its promises the Bank is behaving irresponsibly by allowing fossil fuel subsidies to be tagged as climate finance. In fact, given the lack of a definition for climate finance within the UN, this month the Bank issued a series of “common principles” for climate finance to explain what kind of investments can be considered climate friendly, and also investments in “efficient” coal power and carbon capture and storage are included in the list, thus risking to set a dangerous precedent.
The World Bank plays a critical role in shaping the energy sectors of developing countries, and should therefore lead by example and eliminate its back up for fossil fuel investments instead of using its power to encourage investments in stranded assets.
The gLAWcal Team
Tuesday, 21 April 2015