World Bank out of Climate

In the lead-in to the Global Week of Action against Debt and the IFIs, the following statement was presented to governments and WB governors in different activities throughout Latin America and the Caribbean. You are invited to disseminate and join your support.

World Bank out of Climate

The World Bank, together with the other International Financial Institutions, has been instrumental since its inception in promoting the interests of the global North, the transnational corporations, financial and political elites: the very same interests that are responsible for pushing and benefiting from an economic model that impoverishes the vast majority, plunders nature, generates global warming and undermines the sovereignty of peoples.

For these reasons it has been the target of strong denunciations and protests for several decades, aimed at getting the World Bank and the other IFIs such as the regional development banks, ICSID, the International Monetary Fund, out of our countries and achieving a profound transformation of the system they promote.
This same Bank, however, in the present context of systemic crisis that reflects the confluence, among others, of the economic, food, energy, and climate crises and that of the extractivist model, is finding a new discourse and abundant resources to consolidate a role as champion of the transition to a “greener” capitalism. It has incorporated into its lexicon “environmental concerns” and a purported priority for “sustainable development”, and on that basis it seeks to impose its definition of the problem and its solutions. We cannot let the World Bank misrepresent the defense of the rights of persons, peoples, and of nature, in order to continue prioritizing the same interests as usual.

Call to mobilize against the World Bank, for the reparation of ecological debt

The climate crisis is a daily reality and one that affects disproportionately peoples of the Global South who have increasingly been made vulnerable as a result of the very development of the industrialized North and the mode of production and consumption that generates global warming, among other local and global problems. With the complicity of South governments and elites, it is working people, indigenous communities, peasants, fisherfolk, women, who are forced to pay most of the consequences and costs of a crisis they did not cause.

In the same vein, the responses that have been formulated by the centers of power are false solutions that ignore the causes of the problem and contribute instead to its worsening and to the further accumulation of climate debt by Northern states, transnational corporations and their international financial institutions. They see climate change as a chance to overcome the economic crisis, strengthen capitalism and continue profiting.

This reduces the crisis of civilization to an ecological crisis, the ecological crisis to a climate crisis, and the latter to a market failing. Ecological destruction thus becomes the new impetus for the economic growth of the elites. The resulting environmental and social problems are characterized as merely a question of technology, inefficiency, or the lack of clarity in establishing property rights, and thus in response it is market solutions that are proposed, such as new “green” financial products, the creation and sale of environmental services, and the commodification of all nature.

The World Bank’s role in climate

The strategy of the North, faced now with the unavoidable recognition of the problem of global warming, is to maintain its impunity, save money, and avoid making any change in its lifestyle and consumption, seeking to transfer responsibility to the South via the promotion and support of false solutions such as the carbon market, hydropower, nuclear energy, agrofuels, and the sale of technologies. In this scheme, the role that elites seek to consolidate for the World Bank is key, similar to that played in the seventies, when it spread a development model based on external indebtedness, and in the eighties and nineties when they used that same debt to impose structural adjustment, privatization, and the neoliberal opening.

On the one hand, the creation of the carbon market opened the door for the IFIs, particularly the World Bank, to expand their role and strengthen their capacity to intervene and condition borrowing countries. It allowed the Bank to generate a whole new program of funding for projects integrated into the carbon market, through initiatives such as Clean Development Mechanisms (CDM), Cap and Trade, and the Program to Reduce Emissions from Deforestation and Forest Degradation (REDD). These allow the North and their transnationals to fictitiously offset some of their greenhouse gas emissions by funding projects in the South that theoretically reduce emissions. These projects increase illegitimate financial debt as well as ecological and social debt. The carbon market also promotes speculation and profit from climate change, promoting new “derivatives” that have nothing to do with any climate impact but with the possible creation of new speculative bubbles similar to that of the subprime mortgage market that exploded in 2007/2008.

Today the World Bank manages 12 carbon funds through its Carbon Financing Unit, with an approximate value of US$ 2.5 billion. So far these have mainly involved projects in countries such as China, India, Brazil, Mexico, and Colombia. Among the most important funds are:

  • Bio Carbon Fund: focused on forestry and land use projects, and
  • Carbon Fund for Community Development: focused on projects in less developed countries.

In addition, the World Bank manages several investment funds, including:

  • Clean Technology Fund (for projects to mitigate or reduce emissions);
  • Carbon Partnership Fund for Forests (FCPF) (mitigation – REDD);
  • Program Forest Investment (mitigation – REDD);
  • Program Pilot Climate Resistance (for adaptation);
  • Program for the Expansion of Renewable Energy for Low-Income Countries (for mitigation – general);
  • Strategic Climate Fund (adaptation, mitigation – REDD, mitigation – general);
  • Global Environment Fund (GEF) that has two trust funds to finance adaptation and mitigation projects.

In the climate talks currently underway, Northern governments have sought to reinforce this role for the World Bank. Recent research suggests that of the US$ 30 billion of “fast-start” financing that was promised in December 2009, in the so-called “Copenhagen Agreement”, so far just US$ 7.9 billion have actually been committed, of which 42% (US$ 3.3 billion) will be channeled through the World Bank and 47% (US$ 3.7 billion) will be implemented through loans.

In contrast, less than 1% has been committed to the Adaptation Fund administered by the United Nations, which is presently the main channel established by the UN Framework Convention on Climate Change to support countries to prevent and deal with the consequences of global warming.

More of the same

Meanwhile the World Bank continues to finance a development model that contributes to global warming, including heavy investment in fossil fuels and agribusiness:

  • Between 1992 and 2004 the World Bank approved more than US$ 11 billion in loans to more than 120 fossil fuel projects, representing 20% of current global emissions.
  • Between 2007 and 2008 alone, the World Bank funded an additional $ 7.3 billion in fossil fuel projects (not including loans to financial intermediaries, policies and actors in the field of fossil fuels). In that same period, the World Bank also financed $ 5.3 billion for renewable energy and energy efficiency.

As might have been expected, the construction of the “new” World Bank Energy Strategy for 2011 shows little change. Among other aspects, it continues to encourage private sector investments focused on energy production rather than consumption. For the World Bank, clean and renewable energy continue to be hydropower, biofuels, nuclear energy (even claiming that it will not fund it), and the carbon market.
In developing these policies, the World Bank continues to ignore, among other things:

  • Recommendations of the World Commission on Dams, which have just marked 10 years of neglect, on the economic, social and ecological impacts of dams. Hydrolectric dams are not clean energy sources: in addition to contributing to deforestation and the expulsion of populations from their territories, they are large emitters of greenhouse gases into the atmosphere.
  • Warnings of the Food and Agriculture Organization (FAO) about the negative impacts of agrofuels on food security, food sovereignty, and deforestation.
  • The last decades of pressure, criticism, and mobilization of millions of organizations and persons, demanding the shutting down of this illegitimate and unjust institution.

World Bank out of Climate

The Peoples’ Agreement, developed by the World Conference of the Peoples on Climate Change and the Rights of Mother Earth, in April 2010 in Cochabamba, in response to the failure of Copenhagen, affirmed that a minimum 6% of Gross World Product is required to cover climate financing needs.

It further stipulates that this financing must be public, new, additional, non-debt generating, eliminating the carbon market and without any role for the World Bank or regional development banks. It also notes that compensation and reparations for the North´s ecological and climate debt to the South are indispensable steps towards the possibility of balance and equity for the entire planet and all of humanity. The financing should not be understood in terms of climate change, but rather in terms of the search for pathways toward a non-petroleum society, given that fossil fuels are the principal cause of the problem.

Knowing the historical consequences that illegitimate debt has provoked throughout the global South, we make an open call to organize actions that demonstrate the role of the World Bank and strengthen resistance to the false solutions that worsen the climate crisis, including in particular the promotion of the carbon market in its various forms and the consequences of this alliance for the rights of peoples and nature.

“Humanity is facing a great dilemma: to continue in the path of capitalism, depredation and death, or the path of harmony with nature and respect for life.” – Peoples’ Agreement of Cochabamba

Jubilee South – Jubilee South/Américas- Friends of the Earth Latin America and the Caribbean, ATALC- Andean Coordinator of Indigenous Organizations, CAOI- Hemispheric Social Alliance – Cry of the Excluded – Southern Peoples´Alliance of Ecological Debt Creditors- Latindadd- World Rainforest Movement- Foro Boliviano sobre Medioambiente y Desarrollo, FOBOMADE, Fundación Solón (Bolivia)- Voces Ecológicas (Panamá)- Movimiento Social Nicaragüense “Otro Mundo es Posible”- Jubileo Sur/México, Marea Creciente, Red Mexicana de Acción frente al Libre Comercio, RMALC, (México)- Acción Ecológica, Centro de Derechos Económicos y Sociales, CDES (Ecuador)- Bloque Popular Hondureño, COPINH (Honduras)- Diálogo 2000, Movimiento por la Paz, la Soberanía y la Solidaridad entre los Pueblos, Mopassol (Argentina)- Mesa Mujeres y Economía (Colombia)- PAPDA (Haití)- CTC (Venezuela)- Red de Acción Ciudadana Frente al Libre Comercio e Inversión Sinti Techán (El Salvador)- Jubileu Sul Brasil, Instituto de Políticas Alternativas para el Conosur, PACS, Centro de Pesquisa e Assesoria, ESPLAR, Red Brasil sobre Instituciones Financieras Multilaterales, Forum da Amazonia Occidental, FAOC, Centro de Defensa dos Dereitos Humanos e Educación Popular do Acre, CDDHGP, Instituto Brasilero de Análisis Sociales y Económicos, IBASE, Forum da Amazonia Oriental FAOR, Comité Metropolitano do Movimiento Xingu Vivo para Sempre, Rede Alerta contra o Deserto Verde, Amigos da Terra. Marcha Mundial das Mulheres (Brasil)


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