The World Bank Moves Away From Fossil Fuels
Last week the World Bank Group announced that beginning in 2019 they would no longer be financing oil and gas projects. The World Bank provides loans to developing countries to help foster economic growth. In 2013, the World Bank made a similar commitment to no longer fund coal based projects. The Bank did include the caveat that under “exceptional circumstances” it will consider financing upstream gas in the poorest countries that can benefit from the energy access. But overall, this stance reflects a commitment to align development assistance with the Bank’s climate pledges.
The announcement was made at the One Planet Summit in Paris, which brought together local, regional, and national leaders to discuss climate issues on the two-year anniversary of the Paris Agreement. At the summit, World Bank president Jim Yong Kim also spoke about initiatives around the world that are helping to bring down greenhouse gas emissions including a multi-million dollar deal in India to deploy millions of LED lights and thousands of electric cars and charging stations.
Advocacy organizations and environmentalists have been pushing divestment as a key tool in the movement away from fossil fuels. The World Bank announcement to shift from fossil fuels is very significant and helps bolster the point made by environmental campaigners—in order to be committed to climate action, countries, institutions and investors, and individuals should stop funding fossil fuels. Divestment has also been employed in other high-profile environmental fights such as the Keystone and Dakota Access pipelines, where banks have been pressured by campaigners to stop financing the projects.
While many nations were hopeful coming out of the Paris Agreement in 2015, there is reason to be anxious as the world continues to warm and nations are not doing enough to hit their goals. As French President Emmanuel Macron remarked, “we are losing the battle.” Big commitments like the one made by the World Bank are needed now more than ever.
A most notable loss over the past two years was the withdrawal of the U.S. from the Paris Agreement. President Trump announced in June of 2017 that the United States would no longer be participating in the climate agreement. President Trump was not invited to the One Planet Summit and the summit slogan was “Make Our Planet Great Again,” an obvious nod to Trump’s campaign slogan.
Regardless of the fact that one of the world’s biggest players is sitting on the sidelines, analysis shows that Paris climate commitments are not enough. A recent piece by Vox shows that even if all countries (including the United States) were to fulfill their pledges, “it would account for only about a third of the needed emission reductions to get to 2 degrees.” It is time to double down on climate commitments. Therefore the announcement by the World Bank Group is all the more important.
Even without the United States, other nations and inter-governmental organizations such as the World Bank Group are united in their commitment to climate change. “I think the [U.S.] withdrawal created a huge momentum to me to create a counter-momentum,” reflected President Macron. With or without the U.S., many world leaders are trying to steer our collective climate ship in the right direction.