Jim Yong Kim, the president of the World Bank, has been garnering headlines in recent months for his outspoken calls for climate action. At the same time, though, his organization continues to come under heat for its continued financial support for fossil fuel exploration and development, which is warming the planet and endangering people and ecosystems around the world.
A report out this month from the watchdog organization Oil Change International found that the World Bank Group has provided over $21 billion in financing for fossil fuels since 2008.
The report isn’t all bad news—in fact, Oil Change’s analysis shows that direct financing of oil, gas, and coal projects by the World Bank has been decreasing in recent years. From 2008-2011, this financing averaged $4.7 billion per year, while from 2011 to 2013 it averaged under half that, at $2.3 billion per year.
At the same time, though, World Bank funding for projects that include fossil fuel exploration has been on the rise.
World Bank investment in fossil fuel exploration hit a new high in 2013, when nearly $1 billion of the $2.7 million of the organization’s fossil fuel financing was directed toward it.
The continued search for new fossil fuel reserves is both unnecessary and economically risky. Already, private companies and government entities like the US Geological Survey have discovered huge deposits of fossil fuels. But, according to the International Energy Agency (IEA), no more than one-third of proven fossil fuel reserves can be consumed if the world is to remain under the 2°C goal.
Put differently, this means that if the world is to remain below the international redline of a 2°C rise in temperatures, two-thirds of known fossil fuel reserves must remain in the ground. Otherwise, it will be nearly impossible to stave off the most devastating effects of climate change.
Since the industrial revolution, humans have caused 515 PgC of carbon emissions through energy generation, transportation, and agriculture. The international scientific community agrees that in order to contain global warming to manageable levels, a maximum of one trillion tons (1,000 PgC) of carbon can be released into the atmosphere.
This means that the world has already burnt through more than half of its allotted ‘carbon budget.’ If emissions rates remain unchanged, this budget will be exceeded by 2045.
Given the dire state of affairs—and increasingly urgent warnings from the Intergovernmental Panel on Climate Change—it is difficult to justify continuing to fund the search for fossil fuels that either will not be consumed, or will contribute to deadly extreme weather, mass migration, and food and water scarcity.
The World Bank’s stated mission includes reducing extreme poverty. Therefore, throwing more weight behind fossil fuel projects that will drive climate change—which disproportionally impacts disadvantaged populations in the developing world—would be contradictory to that mission in the long term. Conversely, in funding clean energy and projects that reduce energy consumption, the World Bank can remain true to its missions and its leader’s words.
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