Examination of Witnesses (Questions 20-26)
MR JESSE
GRIFFITHS, MR
SAM BICKERSTETH
AND MR
TOBY QUANTRILL
12 NOVEMBER 2008
Q20 Chairman: So your conclusion
on that would be to let the private sector effectively or the
other sectors develop the fossil fuels and the Bank should engage
in bringing forward other low carbon technologies in developing
countries?
Mr Quantrill: Absolutely.
Q21 Chairman: That is something that
our other witnesses will obviously comment on.
It would actually be helpful if you could
expand a little bit on how you think they might do that and how
they are not doing it.
Mr Bickersteth: I do not actually
have the capacity to go into detail, but essentially building
the capacity of the countries themselves to develop smart climate
decisions is very important, so shifting the levels of investment
to clean technologies and to low carbon technologies within the
countries and building capacity to build energy solutions into
their national planning. I think that is a critical area of investment
for the Bank where they need to shift much higher level resources.
The point which has been made by Toby is this issue about consistency
and coherence and a much greater amount of clarity in the overall
energy policy of the Bank.
Mr Griffiths: I think there is
a clear recent example we all have to bear in mind, which is the
Chad-Cameroon pipeline in terms of the Bank being involved in
a major fossil fuel project, in this case oil, in an attempt to
get it implemented in a better way and it was a complete fiasco.
So this year they had to pull out. They got paid back by the Chadian
Government after the pipeline was built. There have been no demonstrable
positive benefits for poverty reduction in Chad and Cameroon,
in fact increases in corruption, increases in the autocratic behaviour
of the Government. This is something which was entirely predictable,
in fact most civil society organisations said before the Bank
got involved, "You simply don't have the influence to try
to make this kind of project better. You should be focusing more
on positive future projects rather than trying to mitigate the
worst effects of projects which are essentially of no use in the
situation we find ourselves in."
Q22 Chairman: On the point Mr Bickersteth
is making, quite a lot of these low carbon developments require
technology which is only being developed not particularly effectively
or fast in the developing world. So it is going to require technology
transfer and skills transfer on a significant scale. Is that something
the Bank can do, or should do?
Mr Bickersteth: The Bank can facilitate
that. DFID is doing some work in this area, but access to these
technologies is absolutely critical at this time for developing
countries.
Mr Quantrill: I think we have
to be clear about the mandate and role of the Bank in this respect.
In terms of technology transfer, that is something which comes
under the mandate of the UNFCCC[7]
and is part of the negotiations. Whether the Bank plays a role
in that or not, what is important is that it is directly accountable
in that role to the UNFCCC and the UNFCCC decisions. So in terms
of the mechanisms which will provide for that, I think that is
where we need to look and I think we have to be very careful about
the role of the Bank in this process and its mandate. To go back,
if I could very briefly, to the previous question about the support
for fossil fuels, one of the things we would like to recommend
and hear is whether DFID and the UK Government is prepared to
push the World Bank on using a shadow carbon price in the assessment
and planning of projects. Let us actually look at the real cost
and put a cost to the carbon, the lifetime carbon of any particular
project or process when it considers its funding and actually
make that information clear and available during the planning
stages, because I think we may find then that some of these apparently
positive fossil fuel developments actually do not look so good
once you take that into account. I think our report begins to
indicate some of the very large numbers we would be looking at
in terms of real costs in that respect.
Q23 Chairman: I suppose the blunt question
is, do you think the Bank really knows what it is doing on climate
change?
Mr Quantrill: On the evidence
of its Framework, it is hard to tell is the honest answer. I have
spent a lot of time running through that very large document over
and over again trying to get a clear sense of what the real focus
and strategy of the Bank is, and what I find is a fairly piecemeal
set of activities described and ambitions, but nothing that really
shows an ambition to shift its entire portfolio to actually understand
development in a different way, a shift of paradigm. It is just
not represented in that Framework at the moment. As I say, when
we look at the true picture of the Bank's climate portfolios,
it simply does not respond to the urgency and the reality of the
current climate challenge.
Q24 Mr Singh: Why should large scale
hydro-power schemes leave a large carbon footprint?
Mr Quantrill: I am not an expert
in that area. I am certainly able to get a much more detailed
response to you if you want it, but what we are looking at is
potential flooding of forests, so carbon release from forests.
You probably know more than I do, but essentially there are carbon
releases as a result, and there is a lot of other social and environmental
impacts beyond carbon and we need to take those into account as
well, and potential costs, both social and environmental.
Mr Griffiths: Can I make a quick
point just in terms of your blunt question? If the Bank was really
serious about becoming an environment bank and leading or helping
to be a leading player in the fight against climate change, the
first thing it should be doing is accounting for its own carbon
emissions in terms of its total portfolio. As I understand it
at present, it only has a commitment to account for its carbon
emissions in terms of its offices and staff, which is obviously
a tiny fraction of its total carbon emissions. This is the excellent
work which WWF has done.
Mr Quantrill: Looking at the World
Bank over the last 10 years between 1997 and 2007, what this report
shows is that it is responsible for lifetime emissions in the
region of 26 gigatonnes of CO2 equivalent. That is equivalent
to 45 annual emissions of the UK, so really large numbers, but
the other finding of this report was really that there is not
a clear strategy. You look back and there are some good bits and
there are some bad bits. There is no clear strategy within the
World Bank Group as to how it is actually going to actually react
to the climate challenge and I do not see in the current strategy
any greater level of clarity. I see some good points and I see
some good commitments, but it is just not clear. Coming back to
the shadow carbon point, what would be interesting is to turn
that into some form of carbon debit so that actually the countries
under the Kyoto Protocol which were responsible for funding that
carbon actually are provided with a percentage of the cost and
that comes back to the countries as something they have to pay
for in some way.
Q25 Chairman: That would help to
fund the adaptation costs?
Mr Quantrill: Exactly. If people
are interested in opening that discussion, then we may be getting
somewhere, but we have to find a way of actually bringing these
costs into the picture.
Q26 Chairman: Unless my colleagues
have other questions, I was going to say that we will have in
a few minutes the Secretary of State in front of us. I am going
to give you an opportunity again, because we have been taking
information from you and if you have any question which you would
like the Secretary of State to answer which is particularly relevant
to you then feel free to tell us what it is.
Mr Griffiths: Shall we go in turn?
I guess the key question for the Secretary of State and the UK
Government is in general in terms of the IMF conditionality, and
also, if the World Bank is planning to triple its lending in the
next three years, the World Bank conditionality, will they be
vigorously pushing the UK Government policy that there should
be no economic policy conditionality attached to IMF or World
Bank lending?
Mr Bickersteth: Specifically in
the area of support for agriculture, going back to our conversation
earlier, the UK is spending less than 2% of its current budget,
on the last data, on agriculture. Should it not be rising proportionately
to 10% or the kind of target which African governments have themselves
set for spending on agriculture? 10% is the target they set under
the Maputo commitment.
Mr Quantrill: My question would
be, if the UK Government is going to support the World Bank in
taking this very central role in the climate finance system we
are seeing, what steps are they going to take to actually hold
the World Bank accountable to its carbon footprint across its
portfolio and to get a commitment to a move towards low carbon
development support.
Chairman: Okay. That is very clear. Thank
you very much. We have the Secretary of State in about three or
four minutes, so thank you very much indeed.
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