1.5 to stay alive: the climate is changing but is the World Bank doing enough to truly align with the Paris Agreement?
Talk of reform at the World Bank Group (WBG) and the MDBs has gathered pace in recent months. Discussions on the Evolution Roadmap, (requested by Secretary Yellen to outline a blueprint for reform at the World Bank), the publication of the World Bank’s plans to align with the Paris Agreement, a change of President at the helm of the WBG and the wider discussions on MDB reform all mean the upcoming WBG Spring Meetings are a key opportunity for a change from business as usual.
In 2017, the MDBs committed to a joint approach for Paris alignment and almost five years later, in March 2023, the World Bank finally published the instrument notes for their Paris alignment methodology. In a blog, at the publication of these notes, World Bank Managing Director of Operations Axel Van Trotsenburg, said ‘ this step is about assurance’. So far the Bank’s response to Paris alignment has lacked assurance for many.
The publication of any detailed plans by the WBG has been a long time coming. The latest Paris alignment plans as well as the draft Evolution Roadmap have lacked detailed consultation with civil society particularly those in the global South. These processes cannot be dominated by the US and northern shareholder countries. Other MDBs have carried out a more robust consultation process. The EBRD has committed to consult on their Paris alignment on an annual basis. The WBG must commit to meaningful and systematic civil society consultation.
The Bank has made no concrete commitment to phasing out fossil fuels across all of its operations and yet this must be at the core of Paris alignment. The Bank cannot fulfill its mandate without tackling climate change. It is a sad irony that by continuing to fund fossil fuels it is working against its own mission. According to research by Oil Change International, the World Bank Group funds more fossil fuels than any other MDB and in 2022 provided $930M in trackable fossil fuel finance. The WBG must implement a whole of institution phase out of direct and indirect finance for fossil fuels
The blog from Van Trotsenburg refers to assessing ‘natural gas investments on a case by case basis and that investments have been rare’. Of the finance flowing directly to fossil fuels at least 67% was for fossil gas. A briefing by Recourse points out the many ways that WBG continues to support gas expansion and demonstrates how this does little to improve domestic energy access, locks in fossil fuels, takes finance away from renewables and will lead to stranded assets. ‘The WBG must ditch the notion of fossil gas as a transition fuel across its entire portfolio‘
To support sustainable development and fulfill its mandate to poverty reduction and shared prosperity the WBG must limit global temperature rise to 1.5⁰C degrees and increase energy access in line with SDG7. In many countries, solar and wind are already the cheapest source of energy. The WBG must shift finance out of fossil fuels and into a sustainable just energy transition. The Bank must support accelerated deployment of renewable energy and transform energy production.
To avoid climate chaos, science has told us clearly that we must keep temperature rise to below 1.5⁰C degrees. The latest Intergovernmental Panel on Climate Change (IPCC) report again sounds the alarm on the the need for urgent action to rapidly phase out fossil fuels, the International Energy Agency (IEA) has demonstrated fossil fuel expansion is incompatible with keeping global temperature rise to 1.5°C and the UN Secretary General has pointed out that the ‘1.5⁰C target is not simply about keeping a goal alive - it’s about keeping people alive.
The World Bank currently hinges its Paris alignment around supporting countries’ Nationally Determined Contributions (NDCs), and Long Term Strategies. These have been proven to be insufficient to keep global temperature rise below 2⁰C let alone 1.5⁰C. The WBG must go further and faster and commit to a renewed drive to keep temperatures below a 1.5⁰C degrees increase, not 2 degrees. Rhetoric is not enough. 1.5⁰C cannot be maintained if the World Bank continues to finance fossil gas and other fossil fuels.
In his blog, Van Trotsenburg highlighted that, ‘Paris Alignment has to be lived and as such, we need to see this in a dynamic way of learning, adjusting and improving our work on climate and development.’ At this point in history, millions of people need Paris alignment to live. The World Bank cannot drag its feet any longer. It must ensure that its Paris Alignment methodology is ensuring a liveable future for all under a 1.5⁰C pathway. The climate is changing and the World Bank must inject urgency and ambition into all of its operations to champion climate solutions across the world and lead full alignment with the Paris Agreement.