World Bank Accused of Incentivizing Investments in Fossil Fuels Through $5B Policy Loans Portfolio
A new report by advocacy group the Bank Information Center has accused the World Bank of funding the creation of policies that promote the development of coal, gas and oil projects in four countries, but the World Bank says the report “grossly misrepresent” its activities.
In a study released today, BIC points to a contradiction between the World Bank’s pronouncements on climate change and its lending activities. President Jim Kim has talked frequently about the need to reduce subsidies for fossil fuels while incentivising investments in renewables in order to promote low-carbon growth, but BIC argues the World Bank has knowingly funded national policy and institutional reforms to subsidize the fossil fuel industries in four countries.
BIC — an NGO that does advocacy work predominantly on World Bank Group activities — also accuses the World Bank of providing “inadequate” support for renewable energy in the four listed countries and finds that in some instances the World Bank financing has had the effect of “undermining” environmental governance and “threatening” forests.
“The World Bank has pledged to help countries adopt a low-carbon development path specifically by phasing out fossil fuel subsidies and promoting a carbon tax. However, the Bank’s policy lending does the opposite by introducing tax breaks for coal power plants and coal export infrastructure,” said Nezir Sinani, Europe and Central Asia manager at BIC.