World Bank President Jim Yong Kim, picked by former President Barack Obama to lead the international lender, will mark the two-year anniversary of the Paris climate change agreement next week by pledging to help countries meet the pact’s obligations by continuing the flow of climate-related financing.
Kim will co-host a major climate change meeting in Paris on Dec. 12, called the One Planet Summit, with French President Emmanuel Macron and United Nations Secretary General Antonio Guterres to “mark the two-year anniversary of the signing of the Paris Agreement,” Kim told reporters on a conference call.
“We’re coming together to not only reaffirm our commitment to the agreement and to showcase some of the great work taking place, but more importantly look at ways to mobilize the scale of financing needed to create a low-carbon, climate-resilient economies,” he said.
Without mentioning President Trump’s June 1 announcement that he would withdraw the U.S. from the global deal, Kim said there “is a lot of positive news” since the Paris deal was reached in December 2015.
“The Paris Agreement entered into force in record time, and 170 countries have ratified it,” he said. In addition, the green bond market had continued “to boom, with the market expected to exceed $130 billion this year,” he said.
The bank provides green bonds for projects that seek to help curb manmade carbon dioxide emissions that many scientists blame for causing global warming. The bonds mostly are used for clean energy and water projects in developing countries, although larger, more developed countries such as Russia also have been given bonds for projects.
The World Bank Group is one of the world’s largest issuers of green bonds. “We’ve raised over $16 billion in over 200 green bonds since 2008 for climate- and environment-related investments,” Kim said.
The World Bank Group will “continue to increase financing for climate action,” he said. The World Bank Group is one of the largest multilateral providers of financing for renewable energy and energy efficiency projects in developing countries, he noted. “We increased climate lending to 22 percent [of the bank’s total lending], up from 18 percent two years ago and getting us closer to our target of 28 percent by 2020,” Kim added.
Increasing funding for countries will be a major topic at next week’s meeting. He said climate financing is “not nearly enough to meet the Paris agreement commitments.” Kim cited estimates by the International Energy Agency that show it will take an average of $3.5 trillion per year over the next three decades to contain the rise of global temperatures to a minimum of 2 degrees Celsius.
The world will require $90 trillion in new infrastructure in 15 years, which “needs to be climate smart,” Kim said. “The problem is, we’re only on pace to meet half of that.”
To shore up the gap in financing, he said he will be urging governments to encourage lending the trillions of dollars, money he said that is on the sidelines earning low interest and could do better being put to work on projects that would earn higher returns.
His recommendations contradict the direction that Trump has taken on Paris. “We need to integrate climate into national policy and put in place incentives for change such as carbon pricing and eliminating fossil fuel subsidies,” Kim said. “This is the time and opportunity to pull together — leveraging and combining all the knowledge and finance mechanisms at our disposal — to help move forward on these important climate commitments.”
Trump has not announced if he will send a delegation to the summit. Earlier reports said Macron had not invited Trump, but the French Embassy in Washington downplayed that by saying not all invitations had been sent out.
Myron Ebell, Trump’s former Environmental Protection Agency transition chief, told the Washington Examiner that Kim’s announcement is a prime example of how the Obama administration institutionalized climate change as a federal priority.
The World Bank president just started his second term in office and each term lasts five years, Ebell wrote in an email. “Thus, it looks like the Trump administration is going to be in disagreement with the World Bank on climate financing throughout the president’s first term and well into his second.”
“It’s a lot of work to drain the swamp, and it’s going to take some time,” Ebell said.
Nevertheless, he wants Trump’s Treasury Department to exert pressure on Kim to move away from funding renewable energy and push coal plants instead.
The U.S. “has the largest number of voting shares” at the World Bank, and the “Treasury should exert pressure to move away from funding renewable energy projects that poor countries can’t afford and back to financing coal-fired power plants,” Ebell said.
“They should argue that affordable energy is a key to alleviating poverty and that affordable electricity comes from coal,” he said. “Foisting expensive and unreliable renewable energy on poor countries obviously conflicts with the World Bank’s ambitious new (or fairly new) motto of ‘Working to end world poverty’ or something like that.”
Ebell doesn’t see much from the administration to counter the World Bank’s agenda. He said the bank’s fall meeting came and went without any discussion on energy project financing.
The administration was trying to use the Paris deal’s Green Climate Fund, meant to help poor countries cope with global warming, to funnel money toward coal projects, a plan that Ebell said “is a stretch.”
The green fund aims to secure at least $120 billion in funds from industrialized nations by 2020. U.N. officials had said a priority has been to find funds to make up for Trump’s withdrawal. The U.S. did transfer $1 billion to the fund under Obama. The Trump administration argued that it had a seat at the table in how those funds are used, “so it was worth a shot,” Ebell said. But it is not clear if that will be possible.
“If they tried that with the Green Climate Fund, they should have made a much more serious effort with the World Bank,” he said.
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