World Bank, Meet the Environment

Script by Mark Hertsgaard
Marketplace, Apr 22, 2004

(Host intro) As the World Bank holds its bi-annual meetings this weekend in Washington, it faces a momentous decision: whether to accept an official recommendation to stop financing oil and coal projects in Third World countries. Commentator Mark Hertsgaard says the World Bank has the chance to lead an energy revolution, and not a moment too soon.

(Mark Hertsgaard) In dollar terms, the World Bank provides only a fraction of the funding for coal and oil projects. Yet its influence is immense.

That's because private corporations see the Bank's stamp of approval as a guarantee their own investments will be safe. So if the Bank pulls out, many coal and oil projects probably won't happen.

Activists are hoping for exactly that. They complain that such projects accelerate climate change while extracting a terrible toll on the poor and their environment.

But opponents of the oil and gas ban, including the World Bank's management and the U.S. government, also cite the plight of the poor. If you rule out the cheapest forms of energy around, they say, you keep poor countries poor.

But that argument doesn't wash. According to some analysts, four fifths of all World Bank energy loans have gone to projects whose oil and coal were exported to the United States and other wealthy nations. So, the poor end up subsidizing the rich.

There's a better solution. The World Bank should fund energy efficiency? No, it's not sexy. But insulating drafty apartment buildings, replacing old furnaces, and installing super-efficient light bulbs is the fastest and cheapest way to create new energy today.

Take China. It could burn half as much coal by installing currently available efficiency technologies. The Chinese people would breathe a lot easier, and the planet's atmosphere would absorb half as many greenhouse gases.

Energy efficiency is no silver bullet, but it can buy us time in confronting the great challenge of this century: helping half of humanity escape from crushing poverty without ruining the ecosystems that make life on earth possible. The World Bank could lead this crusade, if it does the right thing.

In San Francisco, this is Mark Hertsgaard for Marketplace.

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