G8's World Bank Global Warming Scandal Exposed

Rich Nations, Multinationals Profit From Fossil Fuel Funding

May 15, 1998

The World Bank is exposed today as a major promoter of global warming. The news comes as G8 summit leaders meet to discuss how developing countries can be persuaded to act on global warming. But the shocking new report from the US Institute for Policy Studies, endorsed by Friends of the Earth International shows that:

  • since the Rio Earth Summit, the World Bank Group has spent $12.4 billion on gas, oil and coal projects [1]

  • the greenhouse gas emissions produced by current Bank projects over their lifetimes (9.9 billion tons of carbon) will total more than three times the output of greenhouse gases from all OECD countries (2.7 billion tons of carbon) for 1995

  • the Bank still spends nearly 100 times more on promoting climate change than in averting it

  • the G8 countries provide half of the World Bank's funds

  • because there is almost a dollar for dollar relationship between contributions to the Bank and procurement contracts, nine tenths of World Bank fossil fuel money ends up with multi-national companies such as Amoco, Chevron, Exxon and Mobil. These companies are leading lobbyists - through the Global Climate Coalition - in resisting official action on climate change, particularly through the US Senate.

Over the last year, one third of all World Bank fossil fuel funding has been spent in China. It is estimated that China will require an extra 15 gigawatts of power every year if it is to meet its planned 8% annual growth rate. This amount of power could run two cities the size of Los Angeles. The Bank has approved over $1 billion dollars in loans to three coal-fired power projects (Tuoketuo,Waigaoqao, Yancheng) with a combined capacity of 7,700 megawatts. A fourth power plant at Leiyang is due for approval in June. The World Bank's China portfolio for 1992-98 will eventually emit 2 billion tons of CO2. [2]

Other World Bank fossil fuel funding is being spent on opening untapped coal reserves, oil and gas fields in some of the most crucial ecological sites in less developed countries. Examples include Nigeria (where nine Ogoni activists were hung in 1995 for opposition to oil drilling), the Caspian Sea (where a major oil pipeline in planned), the planned Chad-Cameroon pipeline and the Amazon rainforest.

Commenting, Daphne Wysham of IPS said:

"Our report shows that the World Bank is not part of the solution to climate change. It is part of the problem. The Bank is supposed to tackle poverty and promote sustainable development. In fact a good part of its money is goes to help promote the single largest environmental threat to our planet. The G8 governments, the fossil fuel multi-nationals, the World Bank bureaucrats and some of the developing worlds most brutal and corrupt rulers have formed a coalition of mutual enrichment, at the expense of the rest of us. The world cannot afford to let this greedy conspiracy continue."

Tony Juniper of FOE added:

"The G8 leaders must intervene at once to bring the World Bank into line. Otherwise all the pious rhetoric of the Kyoto summit will be exposed as a sham. The hypocrisy of the G8 Governments' meeting to talk about pressing developing countries on climate change, while allowing their own multi-nationals to cream off World Bank funding for fossil fuel schemes, is now evident to all. Will Bill Clinton, Tony Blair and the rest allow this scandal to continue while they grin for the world's cameras? Or will they finally act against the corrupt regimes and sleazy corporate lobbyists who grow rich by promoting global warming at our expense?"

Notes

  1. The World Bank Group includes four institutions which provide loans credit, equity guarantees and risk insurance: the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA).

  2. In October 1997, Exxon Chairman Lee Raymond spoke at the 15th World Petroleum Congress in Beijing. He urged China to use more, not less, fossil fuels and blamed climate change on "nature". Exxon is a major funder of the Global Climate Coalition, which has urged the US Senate not to ratify the Kyoto agreement until China and other developing countries agree to match planned US action on climate change.