Try Red Pepper in print with our pay-as-you-feel subscription. You decide the price, from as low as £2 a month.

More info ×

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.

Michael Cashman: Commander of the Blairite Empire
Lord Cashman, a candidate in Labour’s internal elections, claims to stand for Labour’s grassroots members. He is a phony, writes Cathy Cole

Contribute to Conter – the new cross-party platform linking Scottish socialists
Jonathan Rimmer, editor of Conter, says it’s time for a new non-sectarian space for Scottish anti-capitalists and invites you to take part

Editorial: Empire will eat itself
Ashish Ghadiali introduces the June/July issue of Red Pepper

Eddie Chambers: Black artists and the DIY aesthetic
Eddie Chambers, artist and art historian, speaks to Ashish Ghadiali about the cultural strategies that he, as founder of the Black Art Group, helped to define in the 1980s

Despite Erdogan, Turkey is still alive
With this year's referendum consolidating President Erdogan’s autocracy in Turkey, Nazim A argues that the way forward for democrats lies in a more radical approach

Red Pepper Race Section: open editorial meeting – 11 August in Leeds
The next open editorial meeting of the Red Pepper Race Section will take place between 3.30-5.30pm, Friday 11th August in Leeds.

Mogg-mentum? Thatcherite die-hard Jacob Rees-Mogg is no man of the people
Adam Peggs says Rees-Mogg is no joke – he is a living embodiment of Britain's repulsive ruling elite

Power to the renters: Turning the tide on our broken housing system
Heather Kennedy, from the Renters Power Project, argues it’s time to reject Thatcher’s dream of a 'property-owning democracy' and build renters' power instead

Your vote can help Corbyn supporters win these vital Labour Party positions
Left candidate Seema Chandwani speaks to Red Pepper ahead of ballot papers going out to all members for a crucial Labour committee

Join the Rolling Resistance to the frackers
Al Wilson invites you to take part in a month of anti-fracking action in Lancashire with Reclaim the Power

The Grenfell public inquiry must listen to the residents who have been ignored for so long
Councils handed housing over to obscure, unaccountable organisations, writes Anna Minton – now we must hear the voices they silenced

India: Modi’s ‘development model’ is built on violence and theft from the poorest
Development in India is at the expense of minorities and the poor, writes Gargi Battacharya

North Korea is just the start of potentially deadly tensions between the US and China
US-China relations have taken on a disturbing new dimension under Donald Trump, writes Dorothy Guerrero

The feminist army leading the fight against ISIS
Dilar Dirik salutes militant women-organised democracy in action in Rojava

France: The colonial republic
The roots of France’s ascendant racism lie as deep as the origins of the French republic itself, argues Yasser Louati

This is why it’s an important time to support Caroline Lucas
A vital voice of dissent in Parliament: Caroline Lucas explains why she is asking for your help

PLP committee elections: it seems like most Labour backbenchers still haven’t learned their lesson
Corbyn is riding high in the polls - so he can face down the secret malcontents among Labour MPs, writes Michael Calderbank

Going from a top BBC job to Tory spin chief should be banned – it’s that simple
This revolving door between the 'impartial' broadcaster and the Conservatives stinks, writes Louis Mendee – we need a different media

I read Gavin Barwell’s ‘marginal seat’ book and it was incredibly awkward
Gavin Barwell was mocked for writing a book called How to Win a Marginal Seat, then losing his. But what does the book itself reveal about Theresa May’s new top adviser? Matt Thompson reads it so you don’t have to

We can defeat this weak Tory government on the pay cap
With the government in chaos, this is our chance to lift the pay cap for everyone, writes Mark Serwotka, general secretary of public service workers’ union PCS

Corbyn supporters surge in Labour’s internal elections
A big rise in left nominations from constituency Labour parties suggests Corbynites are getting better organised, reports Michael Calderbank

Undercover policing – the need for a public inquiry for Scotland
Tilly Gifford, who exposed police efforts to recruit her as a paid informer, calls for the inquiry into undercover policing to extend to Scotland

Becoming a better ally: how to understand intersectionality
Intersectionality can provide the basis of our solidarity in this new age of empire, writes Peninah Wangari-Jones

The myth of the ‘white working class’ stops us seeing the working class as it really is
The right imagines a socially conservative working class while the left pines for the days of mass workplaces. Neither represent today's reality, argues Gargi Bhattacharyya

The government played the public for fools, and lost
The High Court has ruled that the government cannot veto local council investment decisions. This is a victory for local democracy and the BDS movement, and shows what can happen when we stand together, writes War on Want’s Ross Hemingway.

An ‘obscure’ party? I’m amazed at how little people in Britain know about the DUP
After the Tories' deal with the Democratic Unionists, Denis Burke asks why people in Britain weren't a bit more curious about Northern Ireland before now

The Tories’ deal with the DUP is outright bribery – but this government won’t last
Theresa May’s £1.5 billion bung to the DUP is the last nail in the coffin of the austerity myth, writes Louis Mendee

Brexit, Corbyn and beyond
Clarity of analysis can help the left avoid practical traps, argues Paul O'Connell

Paul Mason vs Progress: ‘Decide whether you want to be part of this party’ – full report
Broadcaster and Corbyn supporter Paul Mason tells the Blairites' annual conference some home truths

Contagion: how the crisis spread
Following on from his essay, How Empire Struck Back, Walden Bello speaks to TNI's Nick Buxton about how the financial crisis spread from the USA to Europe