It's time for the World Bank to marshal all of its energy resources to address climate change

From the outside it appears that the World Bank is going to take climate change, renewable energy, and energy efficiency more seriously.  They have appointed a new “climate change envoy”—Andrew Steer—and have appointed a top notch low carbon energy specialist— Daniel Kammen (ClimateWire, sub req.).  However, the World Bank needs to make some important shifts in order to move its entire energy portfolio toward environmentally sound low carbon energy technologies.

The Natural Resources Defense Council (NRDC) has been strongly supportive of clean energy investments in developing countries.  NRDC is working in China, India, Chile, and Costa Rica on clean energy deployment on-the-ground.  We have urged Members of the US Congress to support clean energy deployment incentives in developing countries through the US budget process.  Through this we have supported the US money towards the Clean Technology Fund (CTF) to help drive transformational change in clean energy deployment in developing countries (see here, here, and here for our statements).  We have actively pushed for the inclusion of strong provisions on clean energy deployment within the US domestic climate bill and the international climate agreement (as we discussed here and here).     

In this support, we have been clear that we see a role for the World Bank in supporting clean energy investments under two conditions (see here for more detail): (1) that the dedicated resources in the “clean energy investments” move global investment in the right direction thereby significantly reducing greenhouse gas emissions; and (2) that the larger World Bank funding doesn’t undermine the greenhouse gas emissions reductions from the “clean energy investments”.  The World Bank energy strategy should be developed with these two principles in mind. 

In response to concerns about the direction of the World Bank’s activities, NRDC joined other groups in urging that the US and other donors should only approve a contribution towards the Bank’s general capital increase if it secures a firm commitment to transition to clean energy.   

In developing its energy sector strategy, NRDC recommends that the World Bank agree to and implement four concrete steps:

  1. Integrate low carbon energy investments into all aspects of the WB lending and its energy and development planning efforts with client countries
  2. Increase renewable and energy efficiency lending
  3. Phase-out high-GHG emitting fossil fuel lending in all client countries by 2015 –unless certain narrowly defined criteria for energy access are met
  4. Decrease lending for large hydroelectric projects, using strict criteria to ensure need for any considered project and to minimize environmental and human impacts

We’ve submitted detailed recommendations on each of these aspects to key policymakers in the World Bank, the US government, and other key governments.  They are practical, but critical steps that World Bank needs to implement to transition its energy lending in a way that doesn’t move us in the right direction and wrong direction at the same time.

The World Bank needs to listen to these and other recommendations as it reforms its energy strategy.  We can’t have the bank operating as usual, while having a slight green tint to some aspects.  Without major reforms it will be hard to continue to justify their involvement in clean energy and climate lending. 

We keep hearing about the reforms working their way through the Bank.  So now is the time to turn those reforms into practical targets, actions, and commitments.  A promise just won’t do at this juncture.  As they finalize their energy strategy in the coming months we’ll have a good sense whether or not their signals are real and significant. 

The ball is in their court.

About the Authors

Jake Schmidt

Director, International program

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