Berlin, Germany – Just prior to the UN climate negotiations that concluded last week in Bonn, Germany, a committee met to continue designing the Green Climate Fund – an entity in which the World Bank is currently vying to take up a key position. Little headway was made at the climate talks to reach an agreement on reining in emissions – which countries, how much, how and by when – or on dispersing funds to developing nations to help them address climate. The Green Climate Fund seemed to be the one aspect on which the UN negotiations are moving forward. And many are concerned.
Established through the UN climate negotiations’ 2009 Copenhagen Accord and renewed through the 2010 Cancún Agreement, the Green Climate Fund offers a promise by developed nations to mobilize jointly $100 billion a year in long-term financing by 2020, in order to help developing countries adapt to climate change, for example, to build walls to protect against rising sea levels or to convert to renewable energy.
Critics were quick to slam the fund for not nailing down how it would be financed and how much each developed nation would contribute. Moreover, developing countries say the amount pledged is much lower than what is needed to help them adapt to climate change and that they are already suffering the impacts of global warming.
A New Chapter in an Old Saga: The World Bank vs. Civil Society
Equally as troubling are the decision-makers involved in the Green Climate Fund (GCF). The Cancún Agreement explicitly “invites the World Bank to serve as interim trustee of the Green Climate Fund, subject to a review three years after operationalization of the fund.”
The GCF reignites criticisms of the World Bank that non-governmental organizations (NGOs), as well as climate, social and global justice organizers active in “the global south” have been expressing for years. Furthermore, it raises concerns about a new arena of financial speculation: climate change.
In April, prior to a two-day meeting in Mexico City of the Transitional Committee – which is responsible for designing the GCF – over 90 NGOs protested the World Bank’s involvement, sending a letter to Christiana Figueres, Executive Secretary of the UNFCCC, stating “The integrity and potential of a truly just and effective climate fund has already been compromised by the Cancún decision to involve the World Bank as interim trustee.”
The NGOs elaborated that “Due to the World Bank’s inequitable governance structure, poor history of adhering to social and environmental safeguards, and continued role in fossil fuel lending, we urge the Transitional Committee not to place the World Bank or its personnel as the facilitator, secretariat, or lead institution of either the Transitional Committee or the Green Climate Fund.”
The findings of a recent report support the NGOs’ concerns, outlining the World Bank’s surging funding of fossil fuels in seven case countries. Co-authored by six groups, World Bank, Climate Change and Energy Financing: Something Old. Something New?, details that World Bank projects rarely alleviate poverty as promised and call into question the institution’s claim that it provides leadership on climate change.
Karen Orenstein – Friends of the Earth U.S., observer NGO of the April 28-29 meeting, and co-editor of the report – said “The Bank needs to clean up its act before aiming to put itself at the center of efforts to respond to climate change. It must not play any role in designing or managing the new UN Green Climate Fund.”
Instead, the NGOs “urge the Transitional Committee […] to formally draw on the expertise from those […] within academia, independent research institutions, labor unions, human rights and women’s rights organizations, organizations representing climate-affected communities, and other areas of civil society.”
They demand that meetings of the Transitional Committee be open to accredited UNFCCC observers and include civil society representatives from developed and developing countries.
Follow the Money
The NGOs are concerned not only about who is (or is not) involved and in control but also about how the money flows. In order to identify the sources of the revenue for the Green Climate Fund, UN Secretary General Ban Ki-Moon established the High-level Advisory Group on Climate Change Financing (AGF), which existed from February 12, 2010 on for 10 months.
It included eighteen members, representing top international banks and leading economies’ ministers of finance. Among them were representatives from the BRIC economies, the World Bank; Trevor Manuel, prior Minister for Finance and now Minister of Planning, South Africa; economist Lawrence Summers; financier George Soros; Nicholas Stern, London School of Economics and author of the influential “Stern Review Report on the Economics of Climate Change.”
Responding to this line-up, Michael Dorsey, Assistant Professor of Environmental Studies at Dartmouth College, said “Trevor Manuel [is] a neoliberal architect. He is a former minister of finance, now working on climate change. He pushed water privatization and electricity privatization strategies. And those strategies disenfranchised numerous communities in South Africa.”
Patrick Bond, University of KwaZulu National Centre for Civil Society in Durban, South Africa, also criticized the selection of Manuel, stating “”He is the single most aggressive neoliberal player on the African continent, and did enormous damage to the economy of his own country and to the economies of neighboring states, especially through legitimization and cross conditionality in support of the Breton Woods Institutions.”
In November 2010, the AGF concluded its work, submitting a report to Ban Ki-Moon, identifying the sources of funding. They include $30 billion in carbon taxes; $10 billion in taxes on international transportation; $10 billion in redirected fossil fuel subsidies; and $40 billion from development banks, such as the World Bank. Carbon markets and the private sector would generate private funds.
The NGOs stipulate that “The Transitional Committee should ensure that funding for adaptation is provided only in the form of grants, as adaptation funding aims to target poor and vulnerable countries and communities. The use of loans for adaptation, which can create further debt and poverty, is not appropriate.”
The report underscores that “international private investment flows are essential for the transition to a low carbon and climate resilient future,” estimating that “USD $30 billion to USD $50 billion could be generated in increased carbon market flows.”
Oscar Reyes, Carbon Trade Watch, criticized this breakdown: “while climate finance is intended to transfer funds from the north to the south, the Green Climate Fund essentially creates a new market infrastructure. Having a larger proportion of the $100 billion a year by 2020 generated through the revenues of the carbon market changes climate finance from responsibility to profit.”
The AGF report also argues that “the multilateral development banks,” such as the World Bank, “in close collaboration with the United Nations system, can play a multiplier role and leverage green investments.”
Janet Redman, Institute for Policy Studies, observer NGO of the April meeting, stated “the GCF conversation shifted very quickly to leverage, to private funding. The World Bank uses leverage. The concern is that the financialization realm might be separated from the greenhouse emissions reductions aspect. So in a worst case scenario, you have none of the regulation and all of the speculation.” The problem with financialization, she underscored, is that “once you use financial intermediaries, a lot of the accountability and transparency disappears. The intermediaries are basically a black box.”
The undersigned of the submitted letter included 350.org, the Center for Biological Diversity, the Council of Canadians, Friends of the Earth, Greenpeace USA, Jubilee South and the Third World Network, among other organizations representing regions the world over.
The next meetings of the Transitional Committee will take place in Tokyo, Japan, July 13-14, 2011; in September; and in October. The final report of these meetings will be presented for approval to the COP 17 taking place November 28-29, 2011 in Durban, South Africa.
Tina Gerhardt is an independent journalist who covers climate change, international negotiations and energy policy. Her work has appeared in Alternet, Environment News Service, Grist, In These Times, The Nation and The Progressive. She has also appeared on The Laura Flanders Show, the National Radio Project, KPFK and WBAI.
Comments are closed.