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Blog 16.02.21: Biden announces new climate change policy; will the World Bank follow by ending their fossil fuel financing?

Guest post by Jasmin Jilma, Christian Aid volunteer

Recently elected US President Joe Biden has promised action to combat climate change. On the first day of his presidency, he announced, ‘we’ve already waited too long to deal with this climate crisis’. Since then, Biden signed executive actions for climate change and re-joined the Paris climate accord. We, from the Big Shift Global campaign, are excited to see the next steps. Alex Doukas, the Stop Funding Fossils Program Director at Oil Change International said: “Not only has President Biden instructed federal agencies to identify and remove domestic fossil fuel subsidies wherever they are able to, he has also instructed the relevant departments and agencies to use the diplomatic weight of the United States to end international public finance for fossil fuels as well.”

The question remains whether other global institutions, largely influenced by the US, such as the World Bank will follow Biden’s ambitions. The US seeks to double renewable energy production from wind by 2030. Will the World Bank also double-down on their climate policies? We are waiting to see whether the US representatives’ actions will reflect Biden’s values.

Arguably, the World Bank has supported developing countries for the mitigation of greenhouse gas emissions and adaptation in response to climate change by providing $83billion pounds from 2016-2020. Yet a study by the Big Shift Global Member Urgewald found that between 2016-2020 more than $12billion were invested in fossil fuel projects. Why do these still exist despite pledges to tackle climate change? Not only do they hinder climate action, but they also increase inequality by benefiting the wealthiest, who disproportionately benefit from these fossil fuel subsidies provided by the World Bank. A recent statement by the World Bank said that it will continue to assist resource-dependent developing countries with “advice on energy solutions that are economically viable”, thus continuing the support of gas and oil industries indirectly.

As the World Bank stressed that “without urgent measures to mitigate the effects of global warming, climate change will drive more than 100 million people into poverty by 2030”, the decision to continue financing fossil fuels is incomprehensible. Even though the bank stopped financing upstream investments in gas and oil in 2019, it has yet to completely detach itself from the industry and fund renewable energy for a sustainable future.

Yet we from the Big Shift Global campaign are optimistic; Biden has directed federal agencies to eliminate fossil fuel subsidies.“Unlike previous administrations, I don’t think the federal government should give handouts to big oil to the tune of $40 billion in fossil fuel subsidies,” he said in a speech before signing the executive order. A similar strategy is long overdue for the World Bank. We want to stress the urgency of the climate crisis; only by investing into local sustainable energy projects, which provide larger benefits for individuals, can the fight towards a more sustainable future be won.

We urge the World Bank to end all financial support for fossil fuels. In particular, the US, as the largest shareholder in the World Bank, needs to push for economically viable solutions for resource-dependent developing countries which do not involve the consumption or production of fossil fuels. Only with such measures can we work towards minimising the impacts of climate change.