climate

World Bank takes stand on fossil fuels and climate change

The World Bank will no longer finance upstream oil and gas projects after 2019, it announced at the One Planet Climate Summit in Paris this week.

World Bank President Jim Yong Kim said the decision came as the lender aligned its goals to meet those of the COP21 Paris Climate Agreement, which aims to keep global temperatures below a 2ºC increase on pre-industrial levels.

“Consideration will be only be given to financing upstream gas in the poorest countries where there is a clear benefit in terms of energy access for the poor and the project fits within the countries’ Paris Agreement commitments,” Kim said in a statement.

Civil society groups commended the move, which all but eliminated the World Bank’s support for fossil fuels.

Stephen Kretzmann, Executive Director of Clean Energy Advocacy organisation Oil Change International (OCI), said “it is hard to overstate the significance of this historic announcement,” which campaigners have called for “for decades”.

Alex Doukas, a Programme Director at OCI, said the move showed “true climate leadership” and sends “a clear signal to the world that the fossil fuel era is ending”.

However, “it is important to note that midstream and downstream oil and gas finance are also major contributors to climate change, and must be addressed to remain within the climate limits established by the Paris Agreement,” Doukas said.

Shelagh Whitley, head of the climate and energy program at the Overseas Development Institute, a London-based think tank, called on all multilateral and bilateral public finance institutions to follow the World Bank’s example.

“The World Bank Group’s primary objectives are to end extreme poverty and support prosperity,” Whitley said.

“There is now global consensus that energy access for the poor is best provided through clean energy and that shared prosperity can only be assured through ambitious action on climate change.”

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