Environment

Background

On track to 1.5C: Mainstreaming climate and forest actions in MDB lending and country strategies

21 April 2017

25 April 2017 | Minutes

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Panelists:

Anoop Poonia, Climate Action Network – International (Moderator)

Julia Bucknall, Director, Environment and Natural Resources Global Practice- World Bank Group

Graham Watkins, Advisor to Division Chief of Climate and Sustainability, Inter-American Development Bank

Daniel de Lemos Ribeiro, Friends of the Earth- Mozambique

Kate Geary, Bank Information Center

 

Anoop Poonia, CAN-I

  • What role can country strategies play in achieving 1.5 degrees
  • They provide a huge opportunity and can play a transformational role as a bottom up approach
  • Opportunity to align financial flows for next 3-5 years, and reduce emissions

Daniel de Lemos Ribeiro, FoE Mozambique

  • Signs are clear, we know what we need to do – therefore target 1.5 degrees
  • Different in different regions, Paris has put upper limit 2 degrees, but we should aim for 1.5
  • Global South are committing more than their fair share
  • We are occupying the compromise trajectory, important to not forget this, and what failures to omit to meet these pledges means
  • Mozambique only 20% of population has access to electricity
  • 53 of the richest people can power the whole of Africa, moreover there is an impact of tax havens
  • Policies have an impact to create a foundation
  • Mozambique policy to not support fossil fuels and more carbon friendly development is mentioned in the bigger picture, but in the detail this is not happening
  • Eg can’t get coal out without roads, tax laws and subsidies are making this feasible
  • A study by BIC on four countries, WB was putting on pressure regarding coal to revive the industry, including adapting tax systems
  • Infrastructure also gets support, funded mainly by WB
  • REDD, a lot of support, major problems with community rights, evidenced by several studies
  • 7 years of payment, but contract for 25 years (after final payment), not about community rights
  • There is a difference between what is on paper and what is happening
  • On land acquisitions, there was a government decree in 2010 which was later modified to allow the government to define community lands, identifying free avaialable land for investors
  • Lot of concerns about the impact on the ground
  • Mabu Forest, four communities are in process to make community managed and owned
  • Quite a few threats, been pushed back for logging concessions
  • FoE working with communities to find alternatives to REDD

Kate Geary, BIC

  • Question on how country strategies can be helpful to combat climate change, there is also  the hidden climate footprint of the World Bank
  • BIC has been looking at indirect investment of the WB, public sector policy lending, private sector financial intermediary (FI) lending
  • DPL is 30-40% of WB expenditure
  • On private sector side, 52% goes to FIs
  • DPF findings of BIC research in Mozambique, Peru, Indonesia, Egypt
  • Introduced new fossil fuel subsidies, undermined local governance, eg speeding up approval of big infra projects
  • Heightened deforestation risks, loans did not assess forest risks of promoting PPPs and large infra, eg in the Amazon
  • There were some positive findings, WB support to low carbon development, but you can’t give with one hand and give away with the other
  • This must be addressed for WB to meet climate commitments
  • On FIs, IDI research looked at a few countries and a few FIs supported by IFC, and found over 40 coal projects, despite Kim’s commitment to not fund coal unless exceptional circumstances
  • Coal extraction comes at a price for forests, and indigenous peoples – climate double whammy
  • WB can’t meet climate commitments with these massive funding loopholes, must stop allowing FIs and DPLs to support this
  • On country strategies, solutions are at the country level, eg country partnership frameworks, developed together with governments for plans over next 4-5 years, so they need to get them right
  • Many are coming up for review in the next few years, an opportunity to get it right
  • Combatting climate change must be socially just, eg include the role of indigenous peoples

Julia Bucknall, World Bank

  • We all want the same thing, socially inclusive poverty reduction, not destroying the environment – need to find right balance but lots of uncertainties and trade offs to be balanced
  • We have stringent rules, so has the IFC, and we are increasingly coordinating with them
  • If things goes wrong we will investigate, but not our policy to fund for example coal mines
  • Our job is to do the hardest things, sometimes they go wrong
  • NGOs seems to want us to fail on REDD+, help us to make it pro poor and pro climate to make it work and to make it right
  • Forest Action Plan, not just about carbon, to find the sweet spot where you match all the things, a corporate commitment screening against criteria

Graham Watkins, IDB

  • Agree must follow through on global commitments
  • Everybody talking about the same thing, the Global Infrastructure Forum tomorrow will be all about this, sustainable infrastructure
  • Huge issue of public sector capacity, need to be solved on the country level playing field is uneven, incentives for example for deforestation
  • Look at Bent Flyberg’s approach to cost-benefit analysis – why are we still using it as a tool?
  • New tools are available, including from WB
  • Urgency is not urgent enough, infra last 40 yrs, takes about 6-8 years to build, so there is a lag
  • We have 15 years, already half of it is gone, the train wreck is happening already
  • IUCN congress last year realised that biodiversity is gone, they hadn’t focused on the threats and drivers that undermine it
  • Banks are responding
  • IDB has mainstreamed climate and sustainability in strategy, new department, urban sust, rural sust, climate change
  • Developing climate action plan
  • Changes are driven from the top, developed from bottom up
  • Changed country strategy process, but this is nto the entry point, as is an agreement renewed every 3 years
  • But you want to change what is happening in the country, with the different banks, need to work at multiple levels
  • Want to mainstream climate into country strategy, into programming and operations – a lot of work, but people are buying into it
  • Also working on a country level on all of this, building capacity
  • New climate economy report on infra, there is a chapter on landscapes
  • Private sector need to be engaged to get enough funds
  • GIF etc, about how to change the infra agenda to low carbon, also about stakeholder engagement
  • IFC stated stakeholder engagement and climate resilient are essential for project in a meeting yesterday
  • Nature article coming up that intensity of storms are going to increase by 2020, not 2050 – everybody needs to work together

Poonia

  • Country strategies are important, but a shrinking space for civil society to influence policy design, financing, etc
  • Not many hooks available, so everybody has a role to play, including the banks themselves
  • NDCs are not perfect, but shows direction of travel and hopefully gives space for enhancement
  • All Paris Agreement objectives depend on MDB financing, but need to be in the context of what countries have put forward
  • Renewables an opportunity, and manage and reduce the risks, making it more accessible
  • Of all oil, gas out there, not much room to further explore
  • Role of fossil fuel subsidies, still rampant and supported by public finance
  • Country strategies is one hook for people on the ground and governments
  • How does DPL influence, can support low carbon development, avoiding deforestation