The World Bank has pledged $200 billion in investments for low carbon projects, despite the fact that its largest shareholder, USA, is refusing to re-join the Paris agreement and is set to host a pro-fossil fuel side event at the United Nation’s climate talks.
The funds will come from a combination of $100 billion in finance from the World Bank’s two leading divisions, the IBRD and IDA, as well as combined finance from the International Finance Corporation, the Multilateral Investment Guarantee Agency and $67 billion from private capital.
However, under US President Donald Trump the US has been promoting a pro-fossil fuel stance and has witnessed an increasing number of calls to cut funding to the organisation.
The current mission of the World Bank is a stark difference to that of its founding members, which set up the organisation to promote and encourage the development of struggling countries and sees fossil fuels as a vital tool to achieve this.
Of the $200 billion promised, only $50 billion has been committed to help fund projects in developing countries, which some experts believe will continue to use fossil fuels without the World Bank’s assistance.
Professor Jason Kirk, author of ‘India and the World Bank: The Politics of Aid and Influence’ said he would: “expect developing countries to continue to exploit their oil and gas deposits even without the World Bank’s help, even if that means they reap less revenue from these industries due to their weaker bargaining power.”
If the World Bank continues to act against the will of the US, the only shareholder that retains veto power over changes to the Bank’s structure, Trump could cut funding to the organisation, which would make these investment plans impossible to carry out.
The announcement comes on the opening day of COP24, the United Nation’s annual climate meeting, where the Trump administration has announced plans to hold a side event at next month’s UN climate talks to promote the use of fossil fuels.