The Sky is Not the Limit: - Carbon Trade Watch

4.2 Kyoto and the World BankThe World Bank has long been aheavy promoter of climate-damagingfossil fuel industries. Its lendingportfolio has favoured these industriesover renewable energy investments bya ratio of 22:1 in the last decade alone.Since the Earth Summit in Rio deJaneiro in 1992, the Bank has investedover US $22 billion in fossil fuelprojects such as oil, coal and gas, indeveloping countries and economiesin transition. In the last ten years, theBank financed 226 major fossil fuelprojects such as gas and coal-firedpower plants, refineries andprocessing plants. According to theSustainable Energy and EconomyNetwork (SEEN), these projects willrelease over 40 billion tons of CO2during their lifetime, equivalent toalmost twice global human-causedgreenhouse gas emissions in 1999. 1Toxic co-pollutants associated withthese projects will also havetremendous negative impact onhuman and environmental health fordecades to come. In contrast, theBank has only financed 35 renewableenergy or energy efficiency projects,with a total outlay of US $1 billion overthe same period. 2Much of the World Bank’s activitiesand lending decisions have been infavour of a broad privatisation agenda,particularly in the energy sector. TheBank, together with other regionaldevelopment banks and theInternational Monetary Fund, havelong pressured national governmentsin the South and economies intransition to open their markets in thename of poverty alleviation andefficiency. Over the years, theseinstitutions have successfully pusheddeveloping country governments toprivatise state-owned energy utilities,through loan conditionalities andstructural adjustment programmes.These privatisation programmes havebeen a boon to large transnationalcorporate interests from the donorcountries, often correlating in areciprocal relationship between aparticular loan and a subsequentcontract offered to a company from thesame donor country. According totestimony from then US TreasurySecretary Lawrence Summers at aCongressional hearing, for every dollarthe US government puts in to theWorld Bank, it receives US $1.30 incontracts for its corporations. 3 Nine outof ten beneficiaries of energy sectorlending from the World Bank went tobenefit TNCs from the North, includingcompanies like Enron, ExxonMobil,ChevronTexaco, General Electric andothers. 4Therefore, it is with a high degree ofsuspicion that the World Bank’smanagement of new programmesgeared towards promoting cleanenergy investment and greenhousegas offset projects, is viewed bycampaign groups. Three new fundshave been set up to promoteinvestment in CDM projects - thePrototype Carbon Fund, theCommunity Development CarbonFund, and the BioCarbon Fund, with atotal capitalisation of US $350 million.World Bank and Emissions TradingThe first fund, the Prototype CarbonFund (PCF), is a pool of moneymanaged by the World Bank anddescribes itself as “pioneering themarket for project-based greenhousegas emissions reductions and tocontribute to sustainabledevelopment.” 5 The money in the Fundis contributed by its ‘partners’ andthese are seventeen corporationsincluding oil transnationals BP-Amocoand Statoil, as well as six rich northerncountries including The Netherlands,Canada and Norway. 6As the name implies, the PCF is aprototype for other fledgling funds ofthe World Bank such as theCommunity Clean Development Fundand the BioCarbon Fund (see “KeyPlayers”). By the end of 2002, it hadcharged ahead with twenty-six27