Will Ajay Banga lead the World Bank in a new direction on climate?
This week is the start of a new era at the World Bank. The presidency of the climate-denier, Trump-appointee Malpass ends and Ajay Banga will take over. Banga arrives via a process where he was the sole candidate nominated as part of the ‘gentleman’s agreement’ whereby the US gets to determine the president of the World Bank. (Nothing says 21st century, fighting against neocolonialism and patriarchal systems than a ‘gentleman’s agreement’ between countries of the Global North).
Ajay Banga might not be the best choice but contrary to Malpass he has declared himself a ‘big believer’ in the climate science which demonstrates that fossil fuels are the main cause of the climate crisis. This is all the more important as many of the countries where the World Bank funds projects have done the least to cause the climate crisis and are now facing the most severe impacts.
Now Banga has the chance to take the Bank in a different direction. Over 36000 people have added their voice to the call for Banga to support a fair and just transition to renewable energy and clean affordable energy access for all. As he takes office, Banga has his work cut out to ensure that he moves the Bank in a better direction to tackle the climate crisis, support the achievement of SDG7 - universal energy access, and align with the Paris Agreement.
The to-do list is undoubtedly long for Banga - a list that includes confronting intersecting crises including on debt, food, gender equality, energy, and climate. If Banga truly is a big believer in climate science, then he must know that when the International Energy Agency and the latest IPCC report state that there can be no new expansion of fossil fuels, this means the World Bank Group cannot continue to fund fossil fuels.
In recent years, the World Bank has become a laggard on climate, holding back the process of joint MDB Paris alignment and continuing to pump billions into fossil fuels. Banga has the opportunity to turn this around, to make the World Bank a leader among the multilateral development banks. To do this he must take bold decisions from the start. This must include:
- Ensuring the Bank’s Evolution Roadmap and reform plans include a whole-of-institution phase out of finance for fossil fuels, including fossil gas.
- Fulfil the Bank’s mandate to alleviate poverty by ending developing countries’ reliance on fossil fuels, redirect funds to support a just, renewable energy transition to ensure energy access for all and gender equality, in line with SDGs 5, 7 and 13.
- Add coal, oil and gas to the World Bank Group’s exclusion list.
- Provide full transparency on the use of funds including those that flow indirectly via financial intermediaries or to countries via budget or policy support.
- Raise its ambition on climate change and a renewed drive to keep temperatures below a 1.5ºC degrees increase, not 2ºC degrees.
- Commit to open and transparent public consultation on its Paris Alignment process
Ajay Banga has the chance to act on his big belief in climate science and the role of fossil fuels in the climate crisis. He must seize the opportunity from day one to demonstrate this.