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After its head David Malpass is accused of climate denialism, the World Bank rejects charges of greenwashing on environmental lending
A new report argues that as much as 40% of the World Bank's claimed US$17.2 billion lending on climate finance in 2020 could not be independently verified as helping developing economies cut carbon emissions or adapt to climate change.
The report by the Oxfam non-governmental organisation says the Bank's accounting methods on its climate finance should be much more transparent, arguing that its audit suggests that some of its 'climate finance claims could simply be greenwashing.'
Officials at the World Bank officials strongly rejected the report and its analysis of Bank lending, arguing that it has increased its climate spending, allocating $32.7bn directly to climate action this year.
This latest row over the Bank's climate record comes at awkward time for the Bank's President, David Malpass. Last month, Malpass was publicly criticised by the United States Administration after he told a panel organised by the New York Times during the UN's climate week that he was unsure whether he accepted the scientific consensus that human fossil fuel consumption was a leading cause of climate change.
The White House press secretary Karine Jean-Pierre told a press conference 'We expect the World Bank to be a global leader of climate ambition and mobilisation … we condemn the words of the president [Malpass].'
Officials at the US Treasury Department which manages the government's relations with the World Bank said they would continue to make their 'expectation clear [on climate policy] to the bank leadership.' Treasury officials would not comment on whether the administration would back Malpass for a second term when his first one expires in 2024.
All that raises the stakes for Malpass ahead of this month's annual meetings of the World Bank and IMF to be held 10-16 October in Washington DC. Several delegations to the UN General Assembly last month called for wider reforms to the international system (AC Vol 63 No 20, Geopolitical divides take centre stage at the UN).
Malpass has rowed back on his initial remarks on climate change to the New York Times panel, both in an internal memo to Bank and in an interview with CNN International in which he said he accepted the scientific consensus on human activity causing climate change.
There is more consensus between the Bank and Oxfam, and other civil society groups, on the gravity of the food and fuel price crisis in developing economies. Another report by Oxfam, in September, showed how food insecurity caused by drought, war and longer-term climate crises had been exacerbated by the spillover from Moscow's war on Ukraine.
This was amplified in a Bank report on 3 October detailing the effects of escalating costs of fertiliser on farmers and food supply. Zimbabwe and Rwanda are among the countries suffering most from food price inflation, according to the Bank's data.
Price inflation is expected to increase after a recent spike in fertiliser prices, which rose by 9% for ammonium nitrate to €960 per metric ton and for calcium ammonium nitrate by 13% to €850 per metric ton. This, the Bank contends, is likely to reduce fertiliser use across much of Africa (AC Vol 63 No 7, Trade curbs and price spikes deepen food crisis).
And it will hit food security. The Bank said 'it is likely that African producers, who must buy fertilisers on world markets and sell crops at cheaper prices in local markets, will prioritise cash crops such as cotton, tea, and tobacco, neglecting food crops such as sorghum and millet, with potential damage to food security.'
Morocco is scaling up its fertiliser production and has vowed to ensure access to 500,00 metric tons of phosphate fertilisers at prices similar to the previous season, though that will only have a small effect on the continent (AC Vol 63 No 10, Alarms sound on debt, inflation and food).
Up to 77 million people in eastern and southern African countries are already experiencing acute food insecurity, while an estimated 38.3 million people are in food insecurity in West Africa because of 'an unprecedented convergence of overlapping shocks and stressors', including high prices for food, agricultural inputs, and energy.
The countries suffering the most severe food shortages are Ethiopia, Nigeria, South Sudan, and Somalia according to the Bank.
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