World Bank misses double dividend on poverty and climate change

Press Release
Friends of the Earth International
International Rivers Network

Aviva Imhof, campaigns director of International Rivers Network, comments:
“The Development Committee today approved a business-as-usual plan that will fail the poor and fail the climate. Governments and the World Bank should massively increase their funding for energy efficiency and renewable technologies like wind, solar, efficient biomass and mini hydro. Such technologies bring a double dividend of combating climate change and reducing poverty.”

Janneke Bruil, IFI program coordinator of Friends of the Earth International, says:
“The investment framework that the Development Committee approved today lets Northern governments off the hook. Rather than promoting more destructive large dams, coal, oil and nuclear power projects in the global South, Northern governments should clean up their own act and reduce emissions at home. We don’t see how the poor or the global climate will truly benefit from the World Bank’s new energy plans.”

Background:

The Development Committee today discussed the World Bank report, Clean Energy and Development: Towards an Investment Framework. The report contains the following f

Most large dams have massive social and environmental impacts, but hardly benefit the poor in off-grid areas.

Many large reservoirs cause significant greenhouse gas emissions. The World Bank’s Nam Theun 2 Project has the potential to release roughly the same amount of greenhouse gases as a combined cycle natural gas project generating the same amount of electricity.

Since global warming is worsening droughts, increasing dependency on large hydro increases the risk of power cuts and the vulnerability of poor countries’ economies to climate change.

Fundamental flaws:

The World Bank approach will not achieve poverty reduction:

Nearly 1.6 billion people do not have access to electricity. Most of them live in rural areas, and many of them are not connected to electric grids. An approach that concentrates on centralized, grid-based power plants will not reach these people. Decentralized, renewable sources of energy such as wind, mini-hydro, solar photovoltaics and biogas are often the least-cost solutions for off-grid areas.

The World Bank’s proposed Investment Framework gives short shrift to such solutions. It focuses on large-scale projects, including coal, large dams and nuclear power. The World Bank report admits that “renewable energy technologies – wind, mini-hydro, and biomass-electric – are the least-cost option for off-grid electrification applications” (p. 91), but does not propose any additional funding for such options.

The World Bank approach does not appropriately address climate change:

Combating climate change is primarily the responsibility of the North. Per capita, poor countries use only 5% of the modern energy services consumed by the industrialized countries. Meeting the basic human needs for electricity of all the 1.6 billion people who presently have no access to modern energy would only increase global carbon emissions by 2%.

Effectively combating climate change primarily requires action in the North, including much deeper emissions reductions under the second commitment period of the Kyoto Protocol. The World Bank claims that its paper “takes a global perspective and is not Bank-centric” (p. 1). Yet its recommendations fail to address the responsibility of the North, and do not call for any commitments under the Kyoto Protocol post-2012. In addition, the framework does not address the need to phase out subsidies for export-oriented oil, coal and gas projects.

Large dams – no solution to the world’s climate problems:

In addition to promotion of coal and nuclear power, the Bank’s paper proposes large dams as a central pillar of its new Investment Framework, particularly for Brazil, India, and Sub-Saharan Africa. It ignores the following lessons of hydropower development:

• Most large dams have massive social and environmental impacts, but hardly benefit the poor in off-grid areas.
• Many large reservoirs cause significant greenhouse gas emissions. The World Bank’s Nam Theun 2 Project has the potential to release roughly the same amount of greenhouse gases as a combined cycle natural gas project generating the same amount of electricity.
• Since global warming is worsening droughts, increasing dependency on large hydro increases the risk of power cuts and the vulnerability of poor countries’ economies to climate change.

For more information
Aviva Imhof, IRN, aviva@irn.org, mobile +1 510 717 4745
Janneke Bruil, Friends of the Earth International, email: janneke@foei.org, mobile +1 202 492 2155 (until Apr 25 only)
‘Business as Usual Will Not Achieve Climate and Development Goals’, a critique of the World Bank’s new investment framework prepared by International Rivers Network, available at www.irn.org/programs/finance/index.php?id=060414critique.html .
Previous release: https://www.foei.org/media/2006/0419.html