Get Red Pepper's email newsletter. Enter your email address to receive our latest articles, updates and news.

×

Off-message at the World Bank

A World Bank internal report has urged that the institution should cease investing in fossil-fuel projects. Sadly, the bank is unlikely to act accordingly.

August 1, 2004
4 min read

On a grey afternoon in Sheffield earlier this year, at the end of a day school on climate change, I heard a most remarkable thing: a review commissioned by the World Bank had recommended that the institution should stop funding fossil-fuel projects by 2008. Had the bank come to grips with its global responsibilities?

The Extractive Industries Review (EIR) was commissioned in 2001 to examine what role, if any, the World Bank has in the extractive industries (oil, gas and mining). It contained many criticisms of bank practice in this area, and suggested that in some cases World Bank involvement even made situations worse.

Predictably, the bank’s management was having none of it and advised that the EIR’s bold recommendations should be rejected. The official response is due in mid-July and is likely to pooh-pooh such utopian recommendations as spending the bulk of bank funding on renewables, rather than fossil fuels. Yet the report and the responses it has generated highlight some interesting issues. They hold some useful lessons for the G8 summit, which is taking place in the UK next year.

The EIR builds on concerns that NGOs had raised for years about bank projects. However, this time the concerns – impacts on human rights and climate change – came out of a process initiated from within the bank itself. Headed by former Indonesian environment minister Dr Emil Salim, the EIR is written in the bank’s language and makes recommendations in a context of what is possible within its working practices.

Salim may have used the bank’s language but, as far as key decision-makers were concerned, he had surely picked up the wrong hymn sheet. For the political realities of the World Bank mean that the chances of the bank ending its subsidies to fossil fuels are pretty slim.

To start with, decisions in the bank are dominated by the world’s most oil-hungry countries. The majority of oil pumped in bank-funded projects feeds demand from those countries” electorates, and most of the subsidies provided by the bank feed demand from their fossil-fuel corporations. According to the US-based Sustainable Energy and Economy Network, these companies have received World Bank-approved financial packages worth more than $10.7 billion since 1992. The bank also acts as a politically low-risk vehicle for securing new energy supplies, particularly ones outside the Middle East – a region increasingly unsafe for Western oil workers and unstable for Western markets.

Another aspect of the World Bank’s appeal as a partner for more commercial ventures is its thin veneer of moral legitimacy, for the bank has an institutional mandate to alleviate poverty. Backing up the EIR’s concerns, a recent report from the New Economics Foundation (NEF) says that countries tend to go deeper into debt as a result of global energy policies” emphasis on fossil fuels.

The Price of Power states that the infrastructure needed for fossil-fuel distribution is expensive and highly centralised, and does little for overall access to energy. Reliance on imported fossil-fuel-based energy locks countries into a dependency relationship with multilateral donors and foreign companies. Poorer countries are thus driven deeper into debt. The report concludes that even a small shift away from fossil fuels towards clean renewable energy could save millions of lives and help avert climate change.

The World Bank’s inevitable rejection of the EIR’s recommendations will not be the tragic end to this particular tale. For the most dominant decision-makers at the bank are practically the same bunch of people that will attend the G8 summit when it comes to Scotland next June. If Tony Blair has his way, this unofficial gathering of the world’s most industrialised countries will place the twin perils of climate change and global poverty at the top of its agenda.

Gordon Brown’s interest in debt relief should lead to plenty of fine words on the subject of tackling poverty. Oxfam is running a campaign “to make poverty history”; but the evidence is becoming irrefutable that unless the fossil-fuel industry becomes history, poverty will remain part of the present. Those who kicked the EIR into the long grass less than 12 months before the Scottish jamboree will be all too keen to forget this, however, leaving it to social-justice campaigners to make sure that the message is brought home.

Red Pepper is an independent, non-profit magazine that puts left politics and culture at the heart of its stories. We think publications should embrace the values of a movement that is unafraid to take a stand, radical yet not dogmatic, and focus on amplifying the voices of the people and activists that make up our movement. If you think so too, please support Red Pepper in continuing our work by becoming a subscriber today.
Why not try our new pay as you feel subscription? You decide how much to pay.

Labour Party laws are being used to quash dissent
Richard Kuper writes that Labour's authorities are more concerned with suppressing pro-Palestine activism than with actually tackling antisemitism

Catalan independence is not just ‘nationalism’ – it’s a rebellion against nationalism
Ignasi Bernat and David Whyte argue that Catalonia's independence movement is driven by solidarity – and resistance to far-right Spanish nationalists

Tabloids do not represent the working class
The tabloid press claims to be an authentic voice of the working class - but it's run by and for the elites, writes Matt Thompson

As London City Airport turns 30, let’s imagine a world without it
London City Airport has faced resistance for its entire lifetime, writes Ali Tamlit – and some day soon we will win

The first world war sowed the seeds of the Russian revolution
An excerpt from 'October', China Mieville's book revisiting the story of the Russian Revolution

Academies run ‘on the basis of fear’
Wakefield City Academies Trust (WCAT) was described in a damning report as an organisation run 'on the basis of fear'. Jon Trickett MP examines an education system in crisis.

‘There is no turning back to a time when there wasn’t migration to Britain’
David Renton reviews the Migration Museum's latest exhibition

#MeToo is necessary – but I’m sick of having to prove my humanity
Women are expected to reveal personal trauma to be taken seriously, writes Eleanor Penny

Meet the digital feminists
We're building new online tools to create a new feminist community and tackle sexism wherever we find it, writes Franziska Grobke

The Marikana women’s fight for justice, five years on
Marienna Pope-Weidemann meets Sikhala Sonke, a grassroots social justice group led by the women of Marikana

Forget ‘Columbus Day’ – this is the Day of Indigenous Resistance
By Leyli Horna, Marcela Terán and Sebastián Ordonez for Wretched of the Earth

Uber and the corporate capture of e-petitions
Steve Andrews looks at a profit-making petition platform's questionable relationship with the cab company

You might be a centrist if…
What does 'centrist' mean? Tom Walker identifies the key markers to help you spot centrism in the wild

Black Journalism Fund Open Editorial Meeting in Leeds
Friday 13th October, 5pm to 7pm, meeting inside the Laidlaw Library, Leeds University

This leadership contest can transform Scottish Labour
Martyn Cook argues that with a new left-wing leader the Scottish Labour Party can make a comeback

Review: No Is Not Enough
Samir Dathi reviews No Is Not Enough: Defeating the New Shock Politics, by Naomi Klein

Building Corbyn’s Labour from the ground up: How ‘the left’ won in Hackney South
Heather Mendick has gone from phone-banker at Corbyn for Leader to Hackney Momentum organiser to secretary of her local party. Here, she shares her top tips on transforming Labour from the bottom up

Five things to know about the independence movement in Catalonia
James O'Nions looks at the underlying dynamics of the Catalan independence movement

‘This building will be a library!’ From referendum to general strike in Catalonia
Ignasi Bernat and David Whyte report from the Catalan general strike, as the movements prepare to build a new republic

Chlorine chickens are just the start: Liam Fox’s Brexit trade free-for-all
A hard-right free marketer is now in charge of our trade policy. We urgently need to develop an alternative vision, writes Nick Dearden

There is no ‘cult of Corbyn’ – this is a movement preparing for power
The pundits still don’t understand that Labour’s new energy is about ‘we’ not ‘me’, writes Hilary Wainwright

Debt relief for the hurricane-hit islands is the least we should do
As the devastation from recent hurricanes in the Caribbean becomes clearer, the calls for debt relief for affected countries grow stronger, writes Tim Jones