How the Greening of the World Bank Affects the Poor

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Has the World Bank has upped its game in the recent past in the business of global environmental governance by accepting climate change may be more important to achieving Millennium Development Goals (MDGs)?

To think that there are more complex responses to issues around climate change than attempting to talk to politicians to show more commitment to socio-political strategies that would negate on poverty reduction and environmental stability for all is a step in the right direction.

But the poor of the world remain as vulnerable as ever and the figures keep rising for those in developing countries that have no access to electricity, or to cooking and heating fuels – a challenge that severely hinders economic growth and poverty reduction.

The question, however, remains: how will all this affect the poor, especially in the developing nations? Well, if we sit back and do nothing by burying our heads in the sand pretending nothing is happening, the poorest countries of the world will suffer the earliest and most because of their geographical location, low incomes, and their heavy reliance on climate-sensitive sectors such as agriculture.

The impacts and socio-political consequences could also be devastating in water-scarce economies (such as those in the Middle East), and regions where we expect dramatic changes in water availability due to glacial melting (such as the Himalayas or the Andes).

Yet climate fluctuations are increasing.

In sub-Saharan Africa, some 550 million people – or nearly 75% of the population – cannot turn on an electric light in their homes – there is no electricity for them. In South Asia, that number is 700 million, or half the population. Meanwhile, nearly 2.5 billion people worldwide use traditional biomass fuels for cooking and heating.

The World Bank estimates that simply getting electricity and heating services to those, and other, deprived people in developing countries would require an estimated annual investment of US$165 billion, increasing at about 3% per year from 2010 through to 2030. For that energy to be as clean or green as possible, the annual investment would be US$40 billion more. There is less than half of that money available currently.

For a commitment of US$ 2.5 billion for renewable energy (including solar, wind, geothermal, biomass and hydro up to 10MW) between June 2004 to December 2007, the bank should really be doing more, apart from managing a global carbon finance portfolio of about US$2 billion, in partnership with several governments and the private sector.

There was too much grumbling and divisions at this year’s G-8 Summit at Hokkaido, Japan in spite of the nice communiqué on reducing green gas emissions by mid this century. It may probably be argued that the G-8 Summit at Gleneagles in 2005 had been the most serious attempt so far in putting up a clean energy framework.

In Africa alone, under the Gleneagles adopted clean energy framework, lending has risen from US$1.4 billion for fiscal years 2003-05 to US$2.4 billion for 2006-08, mainly in the commercialization of less expensive clean energy technologies.

The bank is currently developing a Strategic Framework for Climate Change and Development that aims to outline how developing countries can be supported in their efforts to adapt to climate change and achieve low-carbon energy growth while, at the same time, maintaining a focus on the core mission of eliminating poverty.

The long term positive impacts of all these efforts by the bank will only be justified if there was a collective commitment to improve financing, share knowledge better, and adopt advanced technologies faster.

Otherwise, the double challenge of fighting poverty and fighting climate change for the poor of the world might still elude us because everyone in the world is affected by climate change, but we are not all affected equally.

Image credit: Oxfarm International via Flickr under a Creative Commons license