‘Stop funding Oil and gas projects’

Climate activists pile pressure on World Bank

Kampala, Uganda | RONALD MUSOKE | This year’s Spring Meetings of the World Bank that took place at the institution’s headquarters in Washington, D.C. from April 10-16 were dominated by demands from shareholders to reform and tackle contemporary challenges. And top on the list were the challenges of the debt burden weighing down economies of developing countries and the climate change crisis.

On the opening day of the meetings, activists swarmed and cycled around the streets near the World Bank Group headquarters with flags, banners and placards telling the institution to stop funding coal, oil and gas projects and instead fund clean energy investments. The activists blocked rush hour traffic as several finance ministers made their way to dinner parties and back-room meetings.

“Bikes are very literally people-powered,” said Hope Neyer, a public health student and organizer with Shutdown DC. “They’re the ultimate zero-emission vehicles. We chose to gather on bikes tonight to remind the World Bank of the potential we have as individuals and communities to show up for what we believe in – the need to protect our planet, the international right to make healthy choices for our families, and a future that is just and livable for us all.”

On April 12, the campaigners wore hazmat suits and brought a massive inflated gas pipeline to the World Bank headquarters calling on leadership of the institution to stop funding fossil fuel projects.

“As the World Bank and IMF meet behind closed doors to advance the agenda of concentrated corporate and political power, a coalition of DC-area activists in solidarity with movements worldwide, especially in the Global South, manifested a very different vision outside,” said Basav Sen, a member of the For People for Planet coalition. “We encircled the meetings on bicycle and on foot, to assert the power of organised people.”

The Spring Meetings often bring together government leaders, private sector executives, civil society and academics to discuss contemporary global development challenges. This year’s meetings were held under the theme, “Building resilience and reshaping development.”

The institution that has been at the centre of global finance over the last 70 years has come under unprecedented political pressure to evolve a global financial system to respond to the development and climate crisis at hand. Some experts believe the institution is not doing enough to address these contemporary challenges.

For the climate change activists, the focus was on the institution’s continued funding of fossil fuel projects around the world a move they say contravenes the World Bank’s climate change pledge spelt out in its “Climate Change Action Plan 2021-2025.”

In this plan, the World Bank Group made a commitment to align all its financing operations with the goals of the Paris Agreement. According to this plan, the institution announced that it is on track to align 100% of its new operations.

It noted that its Paris Alignment undertaking would entail an integrated vetting approach screening, managing, and reducing climate risks for both mitigation and adaptation for every project, using publicly disclosed Instrument Methods (World Bank), Sector Notes (World Bank Group), and joint Multilateral Development Banks (MDB) Paris Alignment Approach (directly applicable to investment/guarantee operations for International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA).

Yet, despite its climate pledges to prioritise clean energy projects and green economies, the World Bank has continued to provide hundreds of millions of dollars in public financing for coal, oil and gas projects. Critics also argue that the institution has failed to enable policy reforms that help developing countries to follow a 1.5°C roadmap with poverty alleviation at its heart.

The climate campaigners argue that the World Bank under current president David Malpass’s leadership, has continued to provide massive funding for fossil fuels despite signing onto goals of the Paris Climate Agreement, which scientists say requires an end to all new fossil fuel funding.

For example, the World Bank spent nearly US$ 15 billion on fossil fuel related projects from 2016 to 2021, according to non-profit The Big Shift Global’s study titled “Investing in Climate Disaster: World Bank Group Finance for Fossil Fuels.” The study was published in October last year. Recent analysis from Devex, an international publication that covers global development has also found that the institution awarded more than 8,900 climate-related contracts worth US$ 1.3 billion between 2018-2022.

Picketing in Washington D.C

On April 14, the activists again gathered at the institution’s headquarters and this time, they called upon Ajay Banga, the incoming president of the World Bank to carry out “true climate reforms.”

Banga, who the United States has nominated to lead the World Bank, has a monumental challenge ahead as he inherits a Bank that invested US$930 million in trackable fossil fuel finance in 2022, according to the latest document outlining how the World Bank Group is continuing to finance fossil fuel projects in developing countries, released by the coalition group, Big Shift Global.

“Banga has his work cut out if the World Bank is truly committed to tackling the climate crisis and maintaining warming below 1.5°C. The Bank is the largest funder of fossil fuels of all the MDBs and of that finance the majority flows to gas projects. This is definitely not keeping 1.5°C alive!” said Sophie Richmond, the Big Shift Global Campaign Lead.

“That the World Bank is promoting and funding gas projects at a time countries are moving to cleaner energy is outright mockery to this important transition. It is especially a sore insult to millions of people in developing countries who are left with little – if not more impoverished – in the wake of this destructive exploitation,” said Dean Bhemukuzi Bhebhe from Power Shift Africa.

“The World Bank’s new Paris alignment methodology has left the door ajar for fossil gas expansion. Yet the IEA in 2022 was clear that there can be no further expansion of oil or gas in a 1.5°C pathway. Climate change is rolling back years of human development threatening the World Bank’s ability to fulfill its goal of ending extreme poverty. Continuing to pour public finance into fossil gas is opening the flood gates to climate catastrophe,” said Fran Witt, Campaign Manager at Recourse.

“Fossil gas is bad for the climate, bad for human rights and bad for the environment. Scarce public funds should be used for a greener, more equitable future, to improve the lives of women, men and children who are currently suffering the impacts of catastrophic climate change and living without access to electricity,” said Fiza Qureshi of Indus Consortium, Pakistan.

David Malpass the current president of the World Bank plans to step down on June 30, although his term was scheduled to run until April 2024. Last September, Malpass faced criticism and many people called for his removal after he declined to say whether he accepted the scientific consensus that man-made burning of fossil fuels was warming the planet.

Weeks after his hesitance to publicly confirm his belief in global warming led to calls for his removal, Malpass called for expanding the development lenders’ mission to explicitly include public goods such as climate change.

A recent poll of World Bank workers found that 87% of World Bank employees think the World Bank needs to be more transparent about its climate finance; 65% of employees think it should stop all fossil fuel financing; and 61% agree the Bank is not doing enough to align with the Paris agreement.

“After years of David Malpass in the President’s office, we cannot afford another second of climate denial leading the bank,” said Andrew Nazdin, the Director of the Glasgow Actions Team, a loose coalition of campaigners that was created before the COP26 conference in Glasgow, Scotland, to expose global climate change deniers.

“Nominee Banga has the opportunity of a lifetime, if he can rise to the climate challenge ending financing oil or gas, ramping up investment in renewables, and becoming the transformative leader the world is begging for.”