On track to 1.5C: Mainstreaming climate and forest actions in MDB lending and country strategies
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Article summary
After more than a year of World Bank committing to mainstreaming 5 climate principles, this event aims to set the context for enabling conditions required to enhance ambition and the role of each stakeholder in mainstreaming climate and forest action in MDB lending and country strategies.
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
