World Bank climate finance: Broken beyond repair

In recent meetings with NGOs, the government has finally admitted concerns with the World Bank’s Climate Investment Funds (CIFs). In spite of these concerns, the UK government continues to provide over 80 per cent of its climate finance, siphoned off from its aid budget, through these funds, ignoring opposition from developing countries. Meanwhile, the UK has failed to give a single penny to the fairer and more democratic alternative: the UN Adaptation Fund, which was set up through the UN climate talks.

The government listed the following concerns:

• development impacts, including gender issues;
• recipient country ownership and transparency;
• results;
• lessons learned and knowledge management.

Given this list, it’s a struggle to identify what issues the government isn’t concerned about, or why they are supporting this fund.

Concerns about the World Bank’s operations are nothing new. WDM, along with campaigners from across the global south, have been speaking out about these for some time. Our 2005 report, Out of Time, is a brilliant critique of the issues with the World Bank. Our more recent report, Climate Loan Sharks, which focuses specifically on the World Bank’s adaptation programme, raises some of the same issues that the Government has now admitted it is also worried about.

The World Bank’s history of financing environmentally and socially destructive projects, its undemocratic structure and lack of transparency, and its failure to consider issues such as gender and civil society participation, means that it is an institution which is inherently flawed. These issues are built into the World Bank’s approach to dealing with countries in the global south.

And yet the UK continues to insist on supporting the World Bank, even when there is a clear and viable alternative. The UN Adaptation Fund, set up through the UN climate talks, is much more democratic than its World Bank equivalent – 70 per cent of its governance is by countries from the global south, it has a participatory and bottom-up approach and, crucially, it only gives grants and never loans. It is also possible for countries to apply directly for finance from the fund, rather than having to be wait to be picked as is the case with the World Bank fund.

Now the government is starting to realise the flaws with the World Bank model, surely it is the time for it to start giving climate change adaptation money through the UN, and move support away from the discredited World Bank.

The Liberal Democrats even stated their support for the UN Adaptation Fund before they were elected. Yet since they’ve been in power they have done nothing to further this. As we head toward the UN climate talks in Durban later this year, Chris Huhne, Liberal Democrat Secretary of State for Energy and Climate Change, the government minister responsible for these talks, is still failing to shift towards a fair approach to climate finance. By continuing to push this current approach, he is not only deepening poverty and pushing false solutions that will not help tackle climate change, but he also risks undermining the chances of a global deal on climate change.

Take action: email Chris Huhne.

Find out more about WDM’s campaign to stop the government funding the providing climate funds via the World Bank and pushing countries into deeper poverty.