Climate risks and the World Bank
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Sponsor: World Resources Institute (WRI)
Panelists: Milap Patel (World Resources Institute), Nezir Sinani (Bank Information Center), Nicole Ghio (Sierra Club), Habiba Gitay (World Bank) CHAIR: Sara Aviel (US Executive Director, WBG)
*partial notes*
Sinani
- restructuring, climate cross cutting issue, global practices, IDA and safeguards discussions
- WRI research shows WB not doing good on climate, Kim recognised
- How to engage constructively, one window the safeguards discussion
- NGOs working on climate safeguard submission
- Identified what could be introduced as instruments at the safeguards level
- Still waiting for management to publish their views
- Submission to EDs yesterday
- Climate change risk assessment, ensuring policy architecture
- Difficult in terms of how to structure the submission
- Link to country partnership framework
- Hope the submission will help WB’s overall engagement on climate change
Ghio
- looking at project side at WB, eg coal projects
- not just climate, but social and environmental impacts
- excited by WB energy strategy, first step to address the role coal play
- WB will be judged on implementation
- Kosovo coal power plant, working with Daniel Kammen, to study situation and alternatives
- Issue of peak vs base power
- Looking at debt issue, labour etc
- Other things about strategy, eg India Tata Mundra coal power plant impact on local communities – eg loss of fishing grounds
- CAO investigation, action plan that was not a power plan – Kim not taking it seriously, despite background as health practitioners
- Financing coal through FIs and DPLs, eg Indonesia project – delayed twice due to local opposition
- Infrastructure lending, important for development, concern where only exists to serve coal fired power plants, eg transmission lines – also creating displacement, corruption, local health impact
- Still new policy huge step, now moving beyond coal as focus
- 100% energy access, need investment in mini and off grid
- dedicated funds vs mainstream to ensure it is not overlooked
- huge issue with energy access, there are options
- clean energy is so much cheaper, timing and economics – the solution is there
Aviel
- WB so dependent on country ownership and demand, how do you create this for climate policy and projects?
Gitay
- given the WB can only provide so much support, need development planning process, bringing in climate risk – then country can work with other donors and funders
- you won’t get rid of the risk, but you can minimise it
- owned by countries
- this is not just to generate demand, but to analyse the need
- upstream analysis of all the risks, part of the country ownership process – estimate will take 3-6 months
Q: In relation to sub Saharan Africa and carbon credit, how much is this playing a role?
Q: Co-benefits question for WB? And on Global Infrastructure Facility being discussed by the governors?
Ghio
- Can’t take climate out of the equation, on the social side it is a climate solution
- Carbon credits, can be an incentive, we have concerns how they can be misused on projects – a tricky area
- Saying that there has been a lot of excellent projects – there are some creative financing options
Sinani
- 75% of WB projects do not assess climate impacts, 88% not GHG emissions etc
- huge policy loopholes, what will happen, will WB step out of projects
Patel
- Recommendations in the report, eg for Country Partnership Framework level
- Cost of the options, assess against other options – real costs analysis would lead to sustainable projects
Gitay
- carbon credits, a new tranche called the BioCarbon Fund, which has just started
- part of the focus is in Africa, eg Zambia
- Have been doing climate co-benefits since 2011
- New work on short term climate pollutants, ‘black carbon’ – report to be produced at some stage this year
- GHG accounting starting systematically in July this year
Aviel
- GIF, still under discussion, proposal has been evolving and taking shape, lots of different views
- US is very supportive to increase infrastructure finance, but still concerns on how it is structured, eg safeguards etc, and should be part of WB structure in that sense
Q: Mixed message, renewable energy is very costly and is very cheap – when fossil fuel is cheap, is env and social costs included?
Q: WB could help mobilise climate finance, by helping align the incentives of all the private banks.
Q: Technology or approach to make communities more resilient?
Q: Are the indicators you are developing on co-benefits, will they be available for public review? Why we aren’t able to impose more conditionality to ensure we make development worthwhile?
Q: Power plant in Singrauli in India, confused there is a commitment to oppose finance, but at the same time financing the transmission link. Will travel 5000 km across the country, including Tata Mundra. Also a place in India that exist only on paper. How do we hold the Bank accountable to finance transmission lines or not?
Gitay
- Along with IDB, working with many coastal communities in Caribbean against salt intrusion for agriculture, roads, livelihoods (fisheries)
- Indicators, WB has a scorecard that is regularly revised, new in place by July – will never be perfect
- Resilience indicator at an early stage, commitment from IDA, working with MDBs and other stakeholders
- GHG accounting, how much from any operations
Patel
- cost differences, think depends on time length – eg fossil fuels maybe some advantage short term
- conditionality’s not an approach people are comfortable with, work collaboratively
Sinani
- need to keep below 2 degree
- Kosovo example, where a new coal power plant will be built
- Criteria to screen coal power plants, panel assessed and came up with conclusion that coal was cheaper – but hadn’t looked into alternatives or externalities
- CSOs did alternative study with ex WB staff, incl social and environmental costs
Ghio
- cost of coal and infrastructure, transport
- financing not there to deal with the upfront costs of renewables, when these have been dealt with it is cheap
- financing model is the problem, and the resistance to deal with this
- coal is not cheap – it is a risky investment, projects have severe financial problems
Aviel
- US taken public stance against financing of coal, also integrated into WB strategy
- Of course there is a grey area with FIs, etc – we often oppose projects that finance coal indirectly
Gitay
- Don’t work on coal projects, I work climate resilience
- Energy access, Lighting Africa
- Energy access has changed the lives of many
- Challenge is to scale it up
Q: Oxfam getting into the energy space now, coal is a no brainer – conventional gas is the difficult one, views?
Q: Structural issue of not addressing the externalities – seems like a big disconnect, how do we reconnect this?
Q: WB doing some positive things, can this be scaled up. In REDD projects, CIF response, but only in trust funds – prospect for WB investing more in that?
Ghio
- external costs can be dealt with in many ways
- one is better regulation
- a coal fired power plant is dirty, can’t do anything with this
- even if they pay to communities, but can’t be fully addressed
- need to do studies, where externalities are priced up and build into assessments
- natural gas, also need to look at the costs – at the end of the day we have to keep fossil fuels in the ground
- natural gas a bit easier, but renewable energy technologies exist
- but still very real health impacts
Sinani
- Loopholes, need to look at cumulative impact assessments, etc
- Natural gas, in Kosovo gas better than gas, need to look from different perspectives
Patel
- no answer to question on REDD plus, others at WRI can answer this better
