Supplementary memorandum submitted by
WWF-UK
Following our oral evidence to the International
Development Committee on DFID's funding of the World Bank in the
context of climate change and environmental commitments, we would
like to add some further comments.
The inquiry is indeed very timely considering
the recent news that the UK has overtaken the US as the World
Bank's biggest donor with a total IDA pledge of $4.2 billion.
In the light of issues raised by Ann McKechin
MP concerning the IFC investment in gas, and the commercial nature
of IFC lending, I am sending this follow up note.
1. Access to information on the distribution
between oil, coal and gas investments of the World Bank Group
institutions is still very limited for civil society organizations
because of a lack of transparent and consistent reporting. Until
2006 oil and gas, on the one hand, and coal, on the other, were
separately reported. In 2007 only figures for oil, coal and gas
combined are available. Part of our call to DFID is to ensure
more transparent and consistent reporting from all WBG institutions.
2. I would stress that, while the IFC may
claim this year to have invested 70% in gas rather than oil and
coal, this has not been due to any specific policy commitment
to invest in gas as part of a package to tackle climate change.
There is no guarantee, therefore, that the IFC's investments will
not revert to major investment in oil and coal in future years.
There needs to be a firm strategy and clear policy commitments
to address this.
3. Hugh Bayley MP raised the issue that
IFC lending is on a commercial basis, and is therefore not bound
by ODA commitments and restrictions. However, the IFC is a publicly
governed institution, and shares its mission with the World Bank.
This is explicitly stated on its website: IFC, as the private
sector arm of the World Bank Group, shares its mission: "To
fight poverty with passion and professionalism for lasting results.
To help people help themselves and their environment by providing
resources, sharing knowledge, building capacity, and forging partnerships
in the public and private sectors". Fighting poverty
today needs to take into account the battle against climate change.
Furthermore, though the IFC highlights climate change as a strategic
priority throughout its operations, this has not yet been translated
into strategic policy.
4. WWF believes that the UK, as the largest
donor to the World Bank, needs to ensure that the Bank develops
an ambitious energy finance strategy based on the need to keep
global temperature increases below 2 degree Celsius. In line with
this, the World Bank needs to agree short term annual targets
for the reduction of its financial, technical and policy support
for fossil fuels, as well as for new renewable energy and sustainable
clean energy technologies. DFID needs to ensure that new definitions
of `low-carbon' technologies exclude socially and environmentally
unsustainable technologies, and that any remaining investment
in fossil fuels includes an objective of significant reduction
in carbon emissions, including carbon capture and storage wherever
technically feasible.
Lies Craeynest
International Development Policy Adviser
20 December 2007
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