Well, the World Bank’s senior management has really done it this time: As my colleague Joel Meister reported today, Congress has reacted to its intransigence on carbon accounting and coal-fired power by deleting budgetary support for the Bank’s Clean Technology Fund. After creating this avoidable breach, the Bank’s management will now have to plead with other donors to stay, while the United States takes its business elsewhere. The new budget does contain some funding for similar activities in the coming year -- $100 million for clean energy promotion by USAID -- while the Obama administration seeks other multilateral options. As I told (subscription required) Lisa Friedman at ClimateWire, the EU and Japan seem unlikely to support the CTF without the United States, so the Bank’s self-described “flagship” program on carbon emissions mitigation seems to be headed for the rocks.
The contrast with previous Bank leadership is painful. During the 1990’s, the Bank played lead roles in multilateral programs to get the lead out of gasoline and heal the ozone layer. Now, despite a professed commitment to carbon mitigation, the Bank’s management can’t even muster the common sense to begin carbon accounting and focus its clean technology program on truly clean technologies (see Upcoming World Bank Vote Threatens Future of Clean Tech Fund). It’s not for want of expertise: For nearly a year, Bank senior managers have been sitting on an internal technical report that lays out the options for carbon accounting. It’s not rocket science, and Bank staff could easily implement it. Nor is it for lack of professional interest: Many Bank staff want to begin carbon accounting now, and they would happily support a focus on clean technologies. Nor is it really for want of developing-country support: India, China and other developing countries would undoubtedly be satisfied with a CTF that used carbon accounting to hold donors’ feet to the fire on financing the incremental cost of clean technology.
It is, quite simply, a stunning failure of the Bank’s senior management to take off their blinders – to see that in the new era, the World Bank will not be assigned global leadership on clean technology investment if it refuses to assume responsibility for its own carbon footprint.
Why did this happen? Perhaps the Bank’s senior managers really had the hubris to believe that the global community had no alternative to the Bank. Or perhaps they thought Congress would blink; or they didn’t understand the stakes; or they didn’t try hard enough to sell carbon accounting to developing countries. Whatever the reason, a failure of this magnitude is ultimately just a failure – and these senior managers, like their private banking counterparts, are paid not to screw such things up.
Where do we go from here? Stay tuned: senior U.S. Treasury staff who support the CTF could certainly make a final push for CTF funding to be attached to the bill as Congress makes its way through the appropriations process. So now, just maybe, the Bank’s management will blink, pull that carbon accounting options paper out of the drawer, and get serious about leaving coal behind. Maybe. In any case, no one could say that they haven’t been warned – repeatedly – for over a year (see here, here, and here).
Now they – and, unfortunately, we – seem likely to pay the piper. It’s the last thing the global community needs at this critical moment.
CGD blog posts reflect the views of the authors, drawing on prior research and experience in their areas of expertise. CGD is a nonpartisan, independent organization and does not take institutional positions.