We thank James Close, former director of the Climate Change Group in the World Bank, for his contribution, and note that although the conclusions made in this article were informed by Close, they were not endorsed by him.
As part of its commitment to the 2015 Paris Agreement, the World Bank Group (WBG) developed its Climate Change Action Plan (CCAP) as a set of ‘concrete actions to help countries deliver on their NDCs [Nationally Determined Contributions] and sets ambitious targets for 2020’ (World Bank, 2016). The Bank comfortably exceeded the commitment laid out in the CCAP of 28% of total financing being climate related, with 32.1% ($20.5 billion) in Fiscal Year 18 alone (World Bank, 2018). Committed to putting climate change at the heart of its strategy, WBG pledged a further $200 billion for climate related projects in 2021-2025, approximately doubling its commitment; this spending is shared equally between public and private enterprises, leveraging private sector finance and supporting increased systemic climate action at the country level (World Bank Group, n.d.a). The sheer scale of this plan is set to consolidate the WBG as central to enabling the implementation of the Paris Agreement.
This came as a result of the WBG realising the impending climate disaster as the principal opposition to its institutional axioms: to ‘[e]nd extreme poverty by decreasing the percentage of people living on less than $1.90 a day to no more than 3% [and to] promote shared prosperity by fostering the income growth of the bottom 40% for every country [by 2030]’ (World Bank Group, n.d.b). It is, however, this intense institutional commitment to reducing absolute poverty and distributing prosperity which is potentially the very reason why the Bank should not assume the central role in mainstreaming climate policy. This is because, although the Bank’s current axioms of policy are aligned with that of the Paris Agreement, it would be fallacious to assume that this is necessarily anything other than temporary. Currently, the WBG recognises climate change as a threat to its core mission due to the strong correlation between its effects and poverty rates (Dunlop et al., 2019, p.169). However, if the conditions of this core mission were to change, allowing for the mass reduction of absolute poverty and distribution of wealth without the burden of mitigating the effects of climate change – perhaps through advancements in agri-environmental technology – then the WBG could be institutionally aligned with the acceleration of climate catastrophe. The danger then, of the WBG holding such a great influence over global climate policy, becomes clear.
To gain a better understanding of the Bank’s current climate change policy, I spoke with James Close, Director of Climate Change at the WBG (2014-2018) who was central to the publication of the CCAP and the rapid increase in climate-related spending. When asked on the value of the WBG holding such a central position in shaping global policy, Close said, ‘it has the capability and track record, acting in concert with others, to play a major role in a sustainable future. Its combination of knowledge and finance – together with its global reach – is unique and very valuable’. He also acknowledged the benefit of the “bottom up” structure of the Paris Agreement as the solution to the structural shortcomings of previous international climate agreements: ‘The Kyoto Protocol was originally “top down” and the failure at the Copenhagen Conference of the Parties was, in part, a result of this construction’. The difference with the Paris Agreement, Close noted, is that the onus is on each nation to take responsibility for climate action through their NDCs. To achieve the scale of financing required to implement the Paris Agreement, Close noted the opportunity for ‘creating payments for ecosystem services’ to alleviate the economic pressure on developing economies and reduce poverty. This, he argued, in conjunction with reducing the demand for the products produced by environmentally unsustainable industries – such as forestry, palm oil and soy – is the beginning of the sustainable development pathway needed to avert the climate catastrophe (World Bank Group, 2015).
It is apparent then, that though the WBG may face an institutional dilemma over future technological developments, its place at the centre of international climate policy is well recognised. The sheer scale of climate-related financing is a strong indicator of its commitment to reducing the factors behind rising global temperatures which will have a catastrophic effect on organised human life. This, coupled with its unique position to mainstream ‘the integration of climate considerations into national policy planning, investment design, budgeting, public procurement and implementation and evaluation’, proves the Bank to be an invaluable weapon against climate change (World Bank Group, n.d.a). Therefore, the WBG should continue to play a central role in shaping climate policy as it holds a unique position in the global economic system which will be invaluable this coming decade: our last chance to avert a climate catastrophe.
References
Chochran, I, Colombier, Morel, R., Spencer, T. and Zou, S. (2015) Mainstreaming Climate Change into Financial Governance Rationale and Entry Points [Online]. Available at: https://www.jstor.org/stable/resrep16131 (Accessed: 18 October 2020)
Dunlop, S., Hawkins, J., Levick, K., Orozco, D., Vernoit, I.E. and Wright, H. (2019) Overarching Climate Strategy. E3G. Banking on Asia: Alignment with the Paris Agreement at Six Development Finance Institutions in Asia [Online]. Available at: https://www.jstor.org/stable/resrep21848.25 (Accessed: 10 October 2020)
World Bank Group (2018) 2018 Joint Report on Multilateral Development Banks’ Climate Finance [Online]. Available at: http://pubdocs.worldbank.org/en/650791574955718829/2018-joint-report-on-mdbs-climate-finance.pdf (Accessed: 18 October 2020)
World Bank Group (n.d.a) 2025 Targets to Step Up Climate Action [Online]. Available at: http://pubdocs.worldbank.org/en/368601543772742074/2025-Targets-to-Step-Up-Climate-Action.pdf (Accessed: 23 October 2020)
World Bank Group (2015) 3 Steps to Decarbonizing Development for a Zero-Carbon Future [Online]. Available at: https://www.worldbank.org/en/news/feature/2015/05/11/decarbonizing-development-zero-carbon-future (Accessed: 20 October 2020)
World Bank Group (n.d.b) What We Do [Online]. Available at: https://www.worldbank.org/en/about/what-we-do (Accessed: 23 October 2020)
World Bank; IFC; MIGA (2016) World Bank Group Climate Change Action Plan 2016-2020 [Online]. Available at https://openknowledge.worldbank.org/handle/10986/24451 (Accessed: 15 October 2020)
