Pledges are great, but they amount to little if they’re not backed by action. The World Bank, one of the biggest multilateral development banks, supporting developing countries, has pledged to take climate action — but they’ve given almost $15 billion to fossil fuel projects in the Paris Agreement on climate change was signed in 2015, according to new research. The bank is likely to have given an even larger investment indirectly.
Back in December 2018, the World Bank committed publicly to align its spending more closely with the goals of the Paris Agreement, which seeks to limit global warming to 2 degrees Celsius at most (with a bonus goal of not exceeding 1.5 if possible). But the promise didn’t pan out, a report by the Big Shift Global, a coalition of over 50 environmental NGOs, has found.
The coalition, which seeks to bring transparency to global energy investments, analyzed public data from Oil Change International’s Public Finance for Energy database. They found that new investments from the World Bank in fossil fuels between the fiscal years of 2018 and 2021 amounted to about $14.8 billion.
The findings put further pressure on the World Bank’s president, David Malpass, who was appointed by former US president Donald Trump in April 2019. Malpass refused to affirm climate science when confronted by a reporter last month, calling his leadership into question. Upon repeated questioning on his position and if he accepted the scientific consensus on climate change that human fossil fuel consumption was a leading cause, Malpass refused to answer and said “I’m not a scientist.” This led to mounting criticism from campaigners and politicians, and while Malpass went on a subsequent interview and said he is not a “denier,” campaigners are calling for a vote of no confidence.
“The report shows that even after the Paris Agreement, climate science and climate impacts should have been focusing minds at the WBG on the need for a transition to clean renewables sources of energy, the Group remained in a fossil-funding paradigm, harmful to people, countries and planet,” the report’s authors wrote on the foreword.
The main projects
In truth, the fiscal year 2022, the World Bank Group delivered a record $31.7 billion for climate-related investments. But having a foot in the climate-friendly world just isn’t going to cut it — especially because it’s only a handful of large-scale fossil fuel projects, from which it’s relatively easy to divest.
About a quarter of the fossil fuel funding identified in the report is associated with just ten World Bank-backed projects. The most expensive one is the Trans Anatolian natural gas pipeline, which will stretch about 1,150 miles across Turkey and is expected to deliver 16 billion cubic meters of gas from Azerbaijan to Europe per year.
Before deciding to make the $1.1 billion investment, the World Bank did an environmental and social impact survey of the project, which found the pipeline could have “irreversible” and “unprecedented” social and environmental consequences on air and water quality and workers’ health and safety. The investment was still green-lit.
Other projects include the Ghorasal Polash urea fertilizer production plant in Bangladesh, which seeks to replace decommissioned facilities, a gas combined cycle power plant in Brazil, with climate and biodiversity impacts, a greenfield combined-cycle gas turbine in Uzbekistan and a heavy crude refinery expansion in Argentina.
Many of the fossil fuel projects identified in the report are related to natural gas, which some countries have described as a transition fuel between coal and renewable energy. The report’s authors reject this, claiming no new gas development should be allowed if the world wants to avoid temperatures exceeding 1.5 Celsius degrees.
A separate report on the World Bank published earlier this week raised doubts over the bank’s transparency in how it reports on climate finance. Oxfam found, using the bank’s own figures, it couldn’t verify about $7 billion of the $17.2 billion the bank said to have spent in climate finance in 2020 from its two main lending organizations.
In a statement, the World Bank said it disputed the findings of the reports as they make “inaccurate assumptions”. In the fiscal year of 2020, the statement reads, the bank allocated a record $31.7 billion from climate-related investments.