The World Bank began operationalising its approach to aligning its activities with the Paris Agreement on 1 July, six years after first announcing its intention to do so, along with its multilateral development bank (MDB) peers, at the One Planet Summit in December 2017 (see Observer Spring 2019).
However, significant concerns remain about the Bank’s oft-delayed approach, which fails to provide clear guidance on limiting future World Bank investments in, or other support for, fossil fuels, and will require Bank staff to interpret whether or not many activities are aligned with the Paris Agreement depending on differing country contexts.
In a Civil Society Policy Forum event on the Bank’s Paris alignment at the World Bank and IMF Spring Meetings in April, World Bank representative Stephane Guimbert noted its assessments of Paris alignment, “will be very country-, sector- and even time-specific. So the assessment in one country today will not be the same as if we are doing it ten years from now.”
A public and transparent process for producing this guidance would have helped to avoid loopholes and improve accountability measures for affected communities, but instead we have a set of late, weak guidelines that won’t catalyse the necessary shift in financing from fossil fuels to clean energyKate Geary, Recourse
The joint MDB approaches for different instruments related to Paris alignment – which constitutes one part of the guidance the Bank relies on – were only made public in June, weeks before the approach was launched.
“It has taken the MDBs eight years to come up with a plan for business as usual,” said Kate Geary of Netherlands-based civil society organisation (CSO) Recourse. “A public and transparent process for producing this guidance would have helped to avoid loopholes and improve accountability measures for affected communities, but instead we have a set of late, weak guidelines that won’t catalyse the necessary shift in financing from fossil fuels to clean energy.”
In a briefing released on 30 June, 14 CSOs, including Recourse and Nairobi-based campaign Don’t Gas Africa, registered their concern that, “the instrument methodologies and sector notes fundamentally fail to respond to the scale of the climate crisis we confront,” and called on the Bank to – inter alia – reorient its approach to the 1.5°C temperature goal.
Lack of clarity on WBG Paris alignment guidelines raises concerns around calls for a ‘bigger bank’
The concerns about the Bank’s Paris alignment approach surface amidst calls by some think tanks and policymakers for a ‘One Trillion Dollar’ World Bank, with a more explicit climate change focus, as part of the Bank’s ‘Evolution Roadmap’ discussions (see Observer Summer 2023).
However, Professor Daniela Gabor voiced fears at a 23 May webinar organised by Belgium-based CSO network Eurodad and partners that the World Bank’s Paris alignment approach could become a further tool for the promotion of the Cascade approach (see Observer Summer 2017), which is centred on the state ‘de-risking’ private investments, in this case privatising the profits and socialising the losses from climate-related projects.
She stated that public banks are expanding their balance sheets to escort private investors into climate initiatives but that they should “not only [be] offering carrots for private lenders but also sticks.”
A joint civil society briefing on the World Bank’s Evolution Roadmap published on 5 July and endorsed by 74 CSOs and academics, including Oxfam and Christian Aid, argued, “The Bank’s approach to Paris alignment must not become a vessel for a new wave of green conditionality that constricts countries’ policy space, including by inducing them into a ‘private-sector first’ approach to climate action, as implied by the Cascade.”