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Banking on climate

Exactly two years after the Paris conference on climate change, the current round convened at the behest of the French…

Banking on climate

US President Donald Trump. (Photo: IANS/File)

Exactly two years after the Paris conference on climate change, the current round convened at the behest of the French President, Immanuel Macron, will be noted for the signal effort to curb fossil fuel. Happily, the world bashes on regardless of Donald Trump’s refusal to be a party to the agreement concluded in December 2015. There has without question been a greater pitch for fossil fuel divestment over the past couple of days. And towards that consummation, Wednesday’s announcement of the World Bank will be generally welcomed by the comity of nations. Headquartered in Washington, the Bank has signalled its intent that perhaps no country has had the nerve to try in terms of minimising, if not ending, the use of fossil fuel.

Chiefly, it will end its financial support for oil and gas exploration within the next two years in response to the growing threat posed by climate change. The Bank has utilised the opportunity afforded by the conference in Paris to announce that it “will no longer finance upstream oil and gas” after 2019. Not that this is a particularly novel intiative; it bears recall that in 2010 it had stopped lending for coal-fired power stations. Since then, it has been under pressure from what they call “lobby groups” to apply the brakes on the $1 billion loan that it has been providing for the exploration of oil and gas in developing countries. In exceptional circumstances, however, the Bank will consider lending for oil and gas projects in the “very poorest countries”, but only where such loans will ultimately help the poor to get access to energy. No less critical is the second condition, i.e. the project must not run counter to the commitments made in the 2015 Paris climate-change agreement to reduce greenhouse gases.

The forward movement initiated by a global entity is, therefore, critical both in terms of a cleaner environment and the world economy. By its own admission, the Bank has realised the need to change its operations in a “rapidly changing world”. Not so, however, the principal polluters. It intends to earmark 28 per cent of its lending to “climate action”. It is fervently to be hoped that the first-ever robust intervention of the Bank in matters environmental will lead to a dramatic improvement in the essay towards protecting the Earth.

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The World Bank has in effect underscored the profound connection between international banking and climate-change. Rightly has Greenpeace greeted the announcement as a “damning vote of no-confidence in the future of the fossil fuel industry”. The Bank’s intiative ought to be the bedrock of any agreement that is concluded at the second Paris round. It is imperative for those assembled at the high table to countenance reality ~ efforts to shift the global economy to a “green energy future” have been too little, too slow.

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