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NGOs Oppose World Bank Management of Climate Funds

POZNAN, Poland, December 9, 2008 (ENS) – Bearing banners with the message “World Bank Out Of Climate,”and “Climate Justice Now” environmentalists protested outside the main entrance to the UN climate conference on Tuesday in an attempt to keep the bank from controlling climate change finance.

Today, 142 nongovernmental organizations issued a joint statement rejecting any such role for the World Bank.

International Finance Campaigner Karen Orenstein with Friends of the Earth US said, “The World Bank is not a credible institution to play any role in addressing the climate crisis. Its Climate Investment Funds are irreparably flawed and should be shut down.”

“Developing countries urgently need billions of dollars – to cope with the increase of storms, droughts, famines and floods that they face due to climate change, and to build low carbon economies. But these funds must come through financial mechanisms controlled by the UN climate convention, in which all parties have equal say,” declared Orenstein.


NGOs demonstrate outside the UN climate talks in
Poznan. December 8, 2008 (Photo courtesy
Earth Negotiations Bulletin)

The Adaptation Fund was approved at the Bali talks last December. Theoretically, the multi-billion dollar fund provided by industrialized countries is supposed to help least developed countries cope with the potentially disastrous effects of climate change and build low carbon economies.

The least developed countries countries want “direct access” to this money without having to go through the World Bank, headed by former U.S. Trade Representative Robert Zoellick.

Although some industrialized countries are not comfortable with allowing such direct access, UNFCCC Executive Secretary Yvo de Boer said Tuesday, “We have agreed on direct access to the fund through accredited national agencies.”

Yet some least developed countries have no “accredited national agencies,” and the debate about whether their governments will be able to access these funds directly is ongoing. De Boer said the issue may be left up to the ministers to decide when they arrive for the high-level part of the climate talks on Thursday and Friday.

The NGOs are critical of the World Bank in part because they say least developed countries deserve grants, not loans, to adapt to global warming caused by the greenhouse gas emissions of the industrialized economies.

“World Bank climate funds force developing countries to pay for the industrialized world’s pollution by providing loans for them to adapt to a climate crisis they did not create,” the NGOs said in their joint statement.


NGO banners displayed in front of the Poznan
conference hall. (Photo courtesy ENB)

“This contravenes the UN climate change convention obligation that industrialized countries are obligated to provide finance for mitigation and adaptation, and compete with UN schemes for money,” they said.

“The World Bank has serious conflicts of interest with tackling climate change,” the NGOs state. “As a major climate polluter and a major deforester, the World Bank is in no position to address the climate crisis that it is helping to cause. The Bank increased its lending for fossil fuels by 94 percent between 2007 and 2008; coal lending alone increased 256 percent. It is even financing coal in the name of fighting global warming.”

Lidy Nacpil, coordinator of the Jubilee South – Asia/Pacific Movement on Debt and Development, said, “It is simply outrageous for climate financing to be given to southern countries in the form of loans. Peoples of the South are the most vulnerable to the effects of climate change because of poverty and lack of government programs and resources, which is in no small part due to the debt they are forced to pay to northern countries.”

“Now the World Bank and northern governments, who bear overwhelming responsibility for the climate crisis, want our people to assume the cost of dealing with its impacts and add to our debt burdens,” said Nacpil. “This is unjust on many levels.”

In addition to the NGOs, the G-77 and China bloc of developing countries – representing 133 developing countries at the UN climate talks – also favor climate funds under the UNFCCC rather than the World Bank.


UNFCCC Executive Secretary Yvo de Boer discusses
the status of negotiations. (Photo courtesy ENB)

But de Boer acknowledged access to the Adaptation Fund to be a difficult issue among other tough decisions that may not even be decided by next December when the UN holds its annual climate conference in Copenhagen, Denmark. This is the crunch meeting that is supposed to conclude with an agreement limiting greenhouse gas emissions after the current Kyoto Protocol commitment period expires in 2012.

During the daily noon briefing on the status of negotiations, De Boer said, “I don’t think it will be feasible to have a fully elaborated long-term response to the climate crisis by the Copenhagen summit. We should be careful not to reach too far and achieve nothing.”

The UN climate chief said he does expect a “clarity on commitments from industrialized countries, including on numbers, for the Copenhagen summit, plus some form of engagement on mitigation of greenhouse gas emissions from major developing countries. Though what form it will take is not clear to me,” he said.

In October, the World Bank Group released a Strategic Framework for dealing with the demands of climate change. The bank said it would:

* Support climate actions in country-led development processes
* Mobilize additional concessional and innovative finance
* Facilitate the development of market-based financing mechanisms
* Leverage private sector resources
* Support accelerated development and deployment of new technologies
* Step up policy research, knowledge, and capacity building

The World Bank Group said it will increase financing for energy efficiency and new renewable energy by an average 30 percent a year, from a baseline of US$600 million, and expand lending to hydropower, with the share of low-carbon projects rising from 40 percent in fiscal years 2006–08 to 50 percent in fiscal year 2011.

The bank said it will scale up support to sustainable forest management, sustainable agriculture and food production, transport and urban development programs.

But nowhere did the bank say that least developed countries would not have to pay back money they receive to adapt to climate change.

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