World Bank pushes carbon markets in agriculture and climate talks

29 November 2010

In the lead up to Cancun climate negotiations, the Bank has used a conference on agriculture and climate as a platform to expand its agricultural activities and link them to its interests in carbon markets, despite new evidence of problems with investment in the sector.

The global conference on agriculture, food security and climate change, starting late October in the Hague, was co-sponsored by the Bank. The conference culminated in a non-binding summary by the Dutch chair with significant inputs from the Bank and came under fire from civil society groups over its claims to set out a “roadmap for action”. Prior to the conference, over 100 civil society organisations signed a statement expressing concern about a lack of transparency, participation and consultation with governments, farmers and civil society groups in preparing for the conference and the drafting of a roadmap. The groups called on the organisers to promote a shift from a focus on industrial to ecological agriculture and drew attention on the agriculture sector’s adaptation to climate change. They also called for promoting public financing rather than relying on carbon markets as well as implementing recommendations from the international assessment of agricultural knowledge, science and technology for development (IAASTD), which the Bank co-sponsored (see Update 67).

“The IAASTD process generated important recommendations about ecological agriculture, and so the Bank has tried to sideline that process and legitimise support for its agenda to get agriculture into carbon markets through the Hague conference,” said Lim Li Lin of international NGO Third World Network. “It is clear the Bank was in the driving seat in generating the ‘roadmap’ and didn’t have much interest in ensuring a process with robust discussion or having the right people in the room,” she added.

In a statement, civil society participants at the Hague conference highlighted that it lacked the legitimacy of a UN process where all governments had a stake in the discussion and that it could undermine or pre-empt ongoing negotiations in the United Nations Framework Convention on Climate Change (UNFCCC). Signatories included ActionAid, Third World Network, Institute for Agriculture and Trade Policy and the International Federation of Organic Agriculture Movements.

At the conference, the Bank demonstrated an interest in further carving out a niche for itself in both agriculture and climate issues with Andrew Steer, Bank special envoy for climate change, delivering a key-note speech about triple wins, “policies and programmes that will, first, increase farm productivity and incomes; second, make agriculture more resilient to variations in climate; and, third, help make the agriculture sector part of the solution.” As part of these efforts the Bank launched its first soil and carbon sequestration fund in Kenya – an area that Bank president Robert Zoellick has highlighted as a new frontier for the Bank. The project will generate carbon credits that will then be sold to the Bank administered BioCarbon Fund, which has been in operation since 2004 and buys carbon credits from a variety of land use and forestry projects.

Almost 90 per cent of the potential to mitigate climate impacts from agriculture lies in capturing carbon in the soil. According to Cool Farming, a 2008 report by international NGO Greenpeace, most of the impact of agriculture on climate change comes from heavy use of fertilizers and raising of cattle. According to Doreen Stabinsky, a professor at College of the Atlantic, the Kenya soil project is the first example of a model where by Northern countries look to offset the impacts of their practices by buying credits generated by more sustainable practices in developing countries.

“Carbon commodification is driving the World Bank’s interest in these issues and is placing skewed priorities on developing countries,” said Stabinsky. “The Bank is so focussed on carbon sequestration and carbon markets they are overlooking the significant resources that need to be mobilised for adaptation needs in agriculture in the South to ensure food security.”

The World Bank Group’s financing in agriculture has increased by 60 per cent over the past six years and doubled in Africa according to an October Bank press release. In recent months, there has been controversy over the International Finance Corporation, the Bank’s private sector lending arm, supporting large scale agricultural investments at the expense of local communities (see Update 72). The Bank’s approach to agriculture has come under further examination in an October report from the Independent Evaluation Group, the Bank’s arms-length evaluation body. As the Bank shifts its focus to the potential for agriculture to use carbon markets, the report’s overarching finding is that “to get the most from recent increases in financing for agriculture and agribusiness, the World Bank Group needs to increase effectiveness of its support for agricultural growth and productivity in agriculture-based economies.”

The report highlights a number of institutional issues at the Bank (see Update 58). These include a conclusion that the Bank has been hindered by the lack of a clear strategy on agriculture, particularly in Sub-Saharan Africa; a decline in agriculture-related skills among Bank staff in the past decade; and weak monitoring and evaluation on agriculture projects. The report also notes that agriculture could make an important contribution to gender empowerment and environmental sustainability. However, greater attention has been paid to gender in project design than in actual implementation.