Development: NGOs Question World Bank's Clean Energy Roadmap

The World Bank's 2010 World Development Report (WDR), released Tuesday, calls on the developed world to lead global efforts to cut carbon emissions, but some civil society groups remain highly sceptical of the bank's role in brokering climate finance.

The report sets out the annual development priorities for the World Bank and its affiliates, and has the potential to affect negotiations at a key meeting convened by the U.N. Framework Convention on Climate Change in Copenhagen this December.

"Developing countries are disproportionately affected by climate change – a crisis that is not of their making and for which they are the least prepared," ackowledged World Bank President Robert Zoellick in the report's official press release. "For that reason, an equitable deal in Copenhagen is vitally important."

Oxfam International's senior climate change advisor, Antonio Hill, echoed the need to couple effective climate change policy with development. Hill praised the report for addressing "how the global response to climate change can strengthen, rather than undermine, development in the world's poorest countries".

Karen Orenstein, international finance campaign coordinator at the environmental NGO Friends of the Earth, agreed that developed countries must make greater commitments to reduce emissions.

"What developed countries are currently putting on the table is completely inadequate to tackle the climate change issue," she told IPS.

Negotiations leading up to the Copenhagen summit have been rife with conflict between high-income countries and the developing world, each demanding that the other take on higher emissions reduction targets.

Developing nations argue that industrialised countries have a historical obligation to take responsibility as the primary contributors to global warming. Industrialised nations counter that mitigation is more cost-effective in less developed nations, and therefore efforts to reverse the trend should start with them.

In its report, the World Bank recommends a compromise that would enable developing countries to make changes in national policy rather than committing to strict emissions targets.

According to Elliot Diringer, vice president of international strategies at the Pew Centre on Global Climate Change, "This more flexible approach would allow developing countries to put forward commitments that better fit their development agendas."

Such policy options could include establishing renewable energy targets or reducing deforestation.

Currently the World Bank acts as a broker for much of the world's climate financing, and it continues to expand in this capacity. However, many environmental NGOs are critical of the World Bank's role in climate change mitigation.

"The world bank is the wrong institution for climate finance," said Orenstein.

Many leaders in the developing world are calling for the formation of a new institution, run by the U.N. Framework Convention on Climate Change, to finance climate change initiatives.

"Developing countries have good reasons to distrust international financial institutions like the World Bank," Orenstein added, "and they don't want them brokering this climate deal."

The WDR advocates strengthening existing global climate finance mechanisms that are currently run by the World Bank, including the highly controversial Clean Development Mechanism (CDM). This cap-and-trade scheme allows developed countries to invest in projects that cut emissions in the developing world as offsets for their own polluting.

However, over two-thirds of projects that receive CDM funding do not actually contribute to a reduction in global greenhouse gas emissions, according to Payal Parekh, a climate scientist with the NGO International Rivers.

These projects lack "additionality", or proof that CDM investment is a prerequisite for emissions reduction. Evidence shows that many CDM-funded projects, such as large hydro-power plants in China, would have been built even without the Clean Development Mechanism footing the bill.

While the World Bank is pushing for the Clean Development Mechanism to be reformed and expanded, Parekh disagrees.

"If the fundamental concept of a programme is flawed, reform is impossible," she told IPS.

According to Parekh, the Clean Development Mechanism largely fails to cut global emissions, instead providing "extra subsidies for projects that would have happened anyway".

The WDR also stresses the importance of proper resource management as climate change causes water, land and energy to become scarcer. Sustainable farming methods, including 'eco-agriculture,' or setting aside land in order to promote biodiversity, are prescribed by the report.

In addition, the WDR proposes three main policy strategies to promote conservation in the energy sector: increases in energy pricing, incentives for utilities to increase efficiency, and the transfer of clean technology to the developing world.

Perhaps the most controversial aspect of the resource discussion is the World Bank's position on water conservation. The WDR advocates dam projects as a way to provide hydropower and protect against droughts and floods.

However, the negative social and environmental impacts of large-scale dam projects have been shown in case after case, according to Orenstein. Moreover, large dams in tropical climates are now known to produce significant amounts of methane, a greenhouse gas.

A recent study in Brazil concluded that the world's 52,000 large dams contribute over four percent of human-induced global warming, making dams "a major source of climate-changing pollution", according to the executive director of International Rivers, Patrick McCully.

The 2010 World Development Report has a significant part to play in the search for a global solution to climate change, according to Elliot Diringer.

"The report is a reflection of what is now broadly understood: that climate and development are intrinsically linked, and that we must address the two issues together rather than making a choice between the two," he told IPS.

However, the question remains whether the World Bank is the right institution to tackle these vital issues.

According to Karen Orenstein, "The World Bank needs to clean up their own act, and look at how their own portfolio is contributing to climate change, before they can be a part of the solution."