Archived press release

Brown urged to U-turn on $1.6bn contribution to disastrous climate funds

11 April 2008

Civil society groups from around the world are today (Friday 11 April 2008) calling on the World Bank to withdraw its proposal to establish climate investment funds ahead of this weekend's spring meetings in Washington, due to concerns the fund will be used for carbon offsetting schemes including industrial-scale tree plantations, coal projects and other polluting, energy-intensive industries and could undermine international efforts to tackle climate change.

The World Bank this week detailed its plans for the funds, which are being set up outside the United Nations Frame Convention on Climate Change [1] and into which the UK will channel its $1.6 billion Environmental Transformation Fund.

Friends of the Earth International climate campaigner Joseph Zacune said: "Gordon Brown's decision to spend hundreds of millions of taxpayers' money on the World Bank's disastrous climate funds is set to do much more harm than good by undermining UN, developing country and community-based efforts to address climate change.

"The World Bank is responsible for major emissions through its financing of dirty fuel projects around the world - putting it in charge of multi-billion dollar climate funds is like putting a mafia don in charge of law and order."

The World Bank Group is the largest multilateral lender for fossil fuel projects, spending around $1 billion per year in financing for the oil and gas industry. This week the Bank approved a $450 million loan for the 4,000 megawatt Tata Mundra coal project in Gujarat, India which is expected to emit 23 million tons of carbon dioxide per year.

The World Bank's climate investment funds are expected to be worth between $7 and $12 billion. The US, UK, and Japan originally proposed the funds with a view toward their approval at the G8 summit in Japan in July 2008.

The Bank's funds are also earmarked for tropical rainforest countries taking part in the Forest Carbon Partnership Facility. This global offsetting scheme would allow rich countries and their corporations to buy up carbon locked in developing country forests in order to pollute as usual at home. The proposals have been opposed by Indigenous Peoples who would have their land rights undermined.

The Group of 77 and China criticised the proposed funds at UN climate talks in Bangkok last week [2].

The World Bank's own Extractive Industries Review (EIR) in 2004 recommended that the Bank "phase out investments in oil production by 2008".

Notes

[1] Details on these new climate funds became available this week on the World's Bank website http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/ENVIRONMENT/ ¬
EXTCC/0,,contentMDK:21713769~menuPK:4860081~pagePK:210058~piPK: ¬
210062~theSitePK:407864,00.html

[2] Bernaditas Muller, chief negotiator for the Group of 77 and China, stated, "The governance of these funds is also donor-driven. There is clearly money for climate actions, which is the good news, but the bad news is it is in the hands of institutions that do not necessarily serve the objectives of the Convention."

[3] A new report "World Bank: Climate Profiteer" from the Institute for Policy Studies, shows how the World Bank's growing engagement in carbon markets is dangerously counter-productive. The Bank's $2 billion, and growing, carbon finance portfolio is forging a path through the $60 billion international carbon market toward a dirty energy future. While the World Bank continues to fund greenhouse gas-emitting coal, oil and gas projects, it skims an average 13% off the top of carbon deals. The report is available on the IPS website www.ips-dc.org/reports/#292

[4] More information is available including Third World Network's critique on these funds is available on www.twnside.org.sg/bangkok.briefings.htm .

See also Bretton Woods Project "World Bank climate funds: a huge leap backwards" www.brettonwoodsproject.org/art-560997.

[5] For further information about Friends of the Earth International visit www.foei.org

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Published by Friends of the Earth Trust