How the World Bank Could Lead the World in Alleviating Climate Change

Robert Goodland <rbtgoodland@aol.com> and
Simon Counsell <simonc@rainforestuk.com>

Executive Summary

A hurricane-damaged home in Gulf Breeze, Florida. Scientists suggest that climate change may be leading to more devastating and more frequent natural disasters, like hurricanes and floods.

Energy use is the source of about 65 percent of anthropogenic greenhouse gas (GHG) emissions; land-use changes, including deforestation and livestock production, account for more than 20 percent of GHG emissions. 1 The World Bank Group (WBG) is contributing significantly to climate change by financing fossil fuels, deforestation, and livestock production. In this paper we urge the Bank to switch to vigorously reducing climate change risks. The Bank can achieve this goal by financing fewer fossil fuel projects, reversing deforestation, and halting its financing of livestock production. Unfortunately, the Bank seems to be doing practically the opposite.

The WBG is aware that it handles generic environmental issues poorly. Nearly one-third of all Bank-financed ³environment² projects, whose combined commitment value was $892 million, are judged unsatisfactory or worse, making it the worst-performing sector by a large margin (IEG 2007). This paper shows that the WBG has mostly progressive policies and strategies in place, but it fails to follow them.

The Problem

Atmospheric CO2 concentration in 2007 was c. 384 parts per million (ppm), considerably more than the pre-industrial value of 280 ppm. The rate of rise now averages between 1.5 to 2.5 ppm each year and is accelerating in response to the increase in human emissions and the relative decline in global sink capacities to assimilate GHG. Following present trends, atmospheric CO2 levels globe could exceed the 450 ppm ceiling within twenty years, and with it what many now regard as the upper ppm limit for keeping under the maximum global temperature increase of ~2 degrees Celsius above pre-industrial levels; beyond this lies runaway chaos. The hard truth is that near-zero global net emissions by 2050 are required to keep below 450 ppm atmospheric CO2 concentration; this in turn is the most frequently cited maximum within which it may be possible to arrest the rise in global temperature to no more than one further degree rise (www.gci.org.uk/briefings).

To avoid tipping the planet over the widely accepted danger threshold of 450 ppm of atmospheric carbon dioxide, humans can afford to burn fossil fuels only in the low hundreds of billions of tons of carbon. Industry estimates suggest that remaining oil reserves alone exceed this figure. As scientific evidence accumulates, the priority to achieve stability seems to be to cut GHG emissions to 30 percent below 1990 levels by 2020 and to net zero by 2050. A temperature rise of 1.1šC now seems inevitable. The next five to ten years are critical in achieving substantial progress toward these targets. Failure to do so renders the task exponentially more difficult beyond 2020 without severe economic disruption.

The Solutions: The Top Priorities

“Prevention first by reducing GHG emissions; adaptation second”

1. Forest Conservation: Switch from current financing of industrial logging and forest destruction to support strengthening of tenure rights of forest-based communities, community-based forest management, and more conservation, reforestation, and afforestation for carbon sequestration. This is the most cost-effective GHG measure, according to Nick Stern.

2. Comply with WBG Livestock Rules: Instruct IFC to follow all WBG policies and strategies, especially: (a) the Livestock Strategy (no more financing for industrial livestock production), and (b) the Nutrition Strategy, which does not recommend meat consumption. This would be the second most cost-effective method, according to FAO.

3. Renewable Energy: Switch from current massive financing of fossil fuels rapidly toward renewable energy (solar, wind, wave, tidal, micro-hydro) with conservation and energy efficiency, and especially decentralized systems for the poor. Eliminate all subsidies for fossil fuels. Assist developing countries to plan for and implement a prompt and orderly transition to renewable energy and GHG reduction.

o Get the Price Right: Promote all nations' adoption of clear price signals, such as a global carbon tax to be used as each nation sees fit. The C-tax must be revenue neutral for the poor.

o Contraction and Convergence: Finance, advise on and otherwise encourage contraction and convergence to reduce GHG emissions. Persuade borrowing member nations to adopt that principle. Support a physical limit (hard cap) that declines to zero before the threshold 2š C rise in temperature occurs.

o International Agreements: Vigorously support the process for the comprehensive post-Kyoto international agreement under the auspices of UN FCCC.

o Stringent Energy Standards: Accelerate improvement of WBG end-use standards commensurate with evolving science for vehicles, lighting, building codes, electric motors, and appliances.

o GHG Sources and Sinks: Monitor GHG emissions & carbon-sink capacities, including oceanic (marine acidification). Implement agreements on deforestation and livestock.

4. Prioritize Poverty Reduction: Reinvigorate meeting the Millennium Development Goals as the WBG's top priority to reduce poverty and to assist the poor in becoming more resilient to withstand climate impacts. Ramp up direct funding for poverty reduction, job creation, nutrition, education, and health. Move away from indirect and inefficient trickle-down economics.

o Adaptation to climate change: Assist developing countries to adapt to climate change, starting with vulnerability assessments of small island nation states such as the Maldives and deltaic countries such as Bangladesh.

Goodland & Counsell End of Executive Summary