The World Bank Is Still Pumping Billions into Fossil Fuels
Despite attempts to position itself as a leader on climate, a new report from the NGO coalition Big Shift Global reveals the World Bank has financed $14.8 billion directly into fossil fuel projects and policies since the signing of the 2015 Paris Agreement. The global lender had pledged in 2019 to end upstream oil and gas financing, and then in 2021, adopted a vague climate action plan. Their commitments, however, contain a giant, often-used loophole known as indirect investment. This loophole has allowed the World Bank to continue to pour billions into fossil fuel projects, as long as they do so through financial intermediaries.
“It’s pretty damning,” report author Katherine Kramer told the Guardian. “The World Bank takes a leadership role, and in some cases can provide just a small amount of support that facilitates much bigger investment from elsewhere. They have huge amounts of leverage, and we have found many cases where that has been used unhelpfully, in climate terms.”
The Big Shift Global: World Bank | A Broken Promise, October 5, 2022.
Urgewald: World Bank Action Day 2021 | Stop Driving Fossil Fuel Investments!, October 10, 2021.
The YEARS Project: The World Bank Backs Off Oil and Gas, December 13, 2017.
Why This Matters
The World Bank could play a major role in supporting a clean energy transition worldwide, if gas projects like pipelines, refineries, and powerplants ceased to make up the majority of the institution’s fuel investments. While the bank argues that natural gas can serve as a critical “transition fuel,” scientific experts agree that the world must undertake no new development projects in order to limit warming to below 1.5 degrees C.
DW: Time is running out | WMO warns 1.5 degree threshold could be topped by 2026, May 18, 2022.
NBC: Low Income Countries Bear Brunt Of Climate Change, September 23, 2022.
Oxfam International: Climate loss and damage, July 20, 2022.
BBC: How Climate Change is Making Inequality Worse, September 27, 2021.
Though the World Bank’s stated goals are to end extreme poverty and promote shared prosperity, their activities undermine these aims. Climate change and poverty are inextricably linked, and by funding fossil fuel development in low and middle-income countries, the bank is further solidifying a long-standing colonial order. Instead, the World Bank could help to prevent the next climate disaster by investing more in renewable energy and resiliency measures.
Bloomberg: Summers Says 'World on Fire' Needs IMF/World Bank Support, October 10, 2022.
World Bank Under Fire
The World Bank, however, disputes claims that they have propped up fossil fuel projects, pointing to the $31.7 billion they say they have invested in climate measures. Yet according to research by Oxfam, up to 40% of the World Bank’s climate-related spending cannot be traced or verified. The World Bank’s lack of transparency is just one example of the rampant greenwashing among the world's leading financial institutions.
BBC: What Is Greenwashing?, January 23, 2022.
Worse, World Bank President David Malpass, a Trump appointee, has failed to take a stance on issues relating to climate. At a New York Times event in September, Malpass evinced actual climate denial when he refused to even state whether he accepted climate science. Many, including former Vice President Al Gore, are publicly calling for a new leader with expertise on climate change.
New York Times Events: World Bank, IMF and Bahamian Leaders Talk About Climate Finance, September 20, 2022.
As World Bank researcher Jake Hess writes for the Guardian, the change must start at the top:
Institutional failures are destroying our ability to deliver on climate, which is the most pressing global development priority… Civil society campaigners, as well as World Bank staffers, have been raising these issues for years. It’s time for our bosses to start listening -- because poverty cannot be eradicated on a planet whose ecosystems are unraveling.
DW: Banks increase funding for fossil fuels despite 'net zero' pledges, February 15, 2022.
Our Eden: Your Bank is Funding Climate Change, November 13, 2021.
The YEARS Project: Five Years Post Paris: Big Banks Pour Trillions Into Fossil Fuels, April 15, 2021.
Foreign Policy Association: US Senator Debunks "The Big Lie" of the Fossil Fuel Industry, April 22, 2022.
Democracy Now: Bill McKibben | Latest IPCC Climate Report Underscores "Fossil Fuel Is at the Root of Our Problems," April 7, 2022.
TED: Fossil fuel companies know how to stop global warming. Why don't they? | Myles Allen, December 4, 2020.