By Daphne Wysham
    TomPaine.com

    Thursday 05 October 2006

    A closed-door meeting wrapped up Tuesday in Mexico City that may determine the fate of the earth's atmosphere. There, energy and environment ministers from the world's eight wealthiest countries (the U.S., the United Kingdom, Canada, Japan, France, Germany, Italy and Russia) were sitting down with their peers from the world's most populous and prosperous developing countries (China, India, Brazil, South Africa and Mexico) to discuss how to tackle climate change.

    The plan they were discussing was not developed through any United Nations agency or other open process. Instead, the plan was developed by officials at the World Bank, acting on the 2005 request from leaders of the Group of Eight countries (G-8). While some initially saw this new "investment framework" on climate change as an opportunity to break the logjam in climate negotiations, according to a recent report issued by the Institute for Policy Studies and others, the plan assumes business as usual: a sea-level rise of at least 3 feet over the next century, and the massive extinction of a large share of the world's plant and animal species. Of course, among those most threatened are the world's poorest populations.

    Equally troubling, among the technologies the World Bank advocates as "solutions" to climate change is nuclear power, despite massive subsidies that are its only key to viability and global concern over nuclear accidents, waste and terrorism.

    The World Bank also promotes integrated gasification combine cycle and carbon capture and storage, two untested technologies for use on coal-fired power plants. Yet there are serious environmental concerns associated with coal mining and burning, and cost concerns associated with these technologies. The World Bank deceptively claims these technologies can "eliminate most of the emissions of CO2." But the anticipated efficiency gains are only 7 to 13 percent for gasification. And this technology will add between 30 and 60 percent to the price tag of an ordinary coal burner, which means more debt for the poorest.

    The World Bank promotes these and other technologies to the detriment of renewable energy, such as wind, a fast-growing, competitive and clean source of energy-and despite the fact that even the G8 recognized the potential of renewables: Its Renewable Energy Task Force developed a plan in 2001 that would have provided renewable energy to 1 billion people by 2010. (The U.S. killed that initiative.)

    The World Bank is heavily invested in the outcome of the prescriptions it is promoting. For example, it has invested over $25 billion in oil, gas and coal projects since 1992, when the Climate Convention was signed, and remains heavily invested in these and other greenhouse gas-emitting sectors, despite recommendations from its own panel of experts, which urged the Bank to divest itself of all oil and coal investments by 2008.

    Simultaneously, the World Bank is rapidly gaining monopoly control over the carbon trading market, which it actively promotes, claiming the vast majority of finance for clean energy will come from this sector. Yet early results show the market is actually encouraging polluting industries to delay reducing their emissions of pollutants in order to profit from the new carbon market.

    Ironically, although the World Bank attempts to be part of the solution, it doesn't even calculate its own contribution to the problem-its "climate footprint." According to IPS research, the World Bank's investments in fossil fuels over 12 years are releasing and will release the equivalent of two years' worth of global greenhouse gas emissions over their lifetimes.

    The World Bank could do a whole lot simply by calculating its climate footprint, getting out of fossil fuel finance and carbon trading, and promoting a carbon tax as a way forward, with revenue directed at clean energy options, particularly for the poorest. Market signals that make it clear to consumers that fossil fuels are on the way out and renewable energy is being ushered in are the surest way to reach climate stability. Yet the World Bank, the one institution that could lead the financial community in setting these market signals, is setting the bar as low as possible, absolving itself of this critical and unique responsibility-all while ensuring those who will pay the highest price from their inaction are not given a seat at the table.

    Daphne Wysham is a fellow at the Institute for Policy Studies. She is a co-author of the recent report, now available in Spanish, "How the World Bank Energy Investment Framework Sells the Planet and the Poor Short."