{"id":12840,"date":"2020-08-21T13:00:00","date_gmt":"2020-08-21T12:00:00","guid":{"rendered":"http:\/\/climatenetwork.org\/?p=12840"},"modified":"2021-02-04T13:01:56","modified_gmt":"2021-02-04T13:01:56","slug":"blog-21-08-20-climate-change-commitments-and-world-bank-group-investments-in-argentina-are-investments-aligned-with-climate-change-commitments","status":"publish","type":"post","link":"https:\/\/climatenetwork.org\/2020\/08\/21\/blog-21-08-20-climate-change-commitments-and-world-bank-group-investments-in-argentina-are-investments-aligned-with-climate-change-commitments\/","title":{"rendered":"Blog 21.08.20: Climate Change Commitments and World Bank Group investments in Argentina: Are investments aligned with Climate change commitments?"},"content":{"rendered":"\n\n
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Climate Change Commitments and World Bank Group investments in Argentina: Are investments aligned with Climate change commitments?<\/strong><\/p>\n

Authors: Environment and Natural Resources Foundation (FARN) and\u00a0Bank Information Center (BIC)<\/p>\n

Published: 21.08.20<\/p>\n

The World Bank Group (WBG) recognizes climate change as a threat to global development that increases instability and contributes to poverty, fragility, and migration. In response to this challenge, in 2016 the WBG launched the Climate Change Action Plan (CCAP), which established general objectives for 2020 to create policies that strengthen resilience to the impacts of the climate change and the promote decarbonization, while alleviating poverty.<\/p>\n

After analyzing the commitments made in the CCAP and the Bank\u2019s investments in Argentina, and considering the active projects (although some date from prior to the CCAP), we observed that\u00a0the value of direct investments destined for fossil fuels was 88 percent higher than for renewable energies<\/strong>, totaling US$ 541 million in investments in fossils, while only US$287 million went to renewable energies .<\/p>\n

Most fossil fuel investments are financed by the International Finance Corporation (IFC) to private companies in projects related to the extraction and refining of fossils, loans to financial intermediaries, or the granting of guarantees. On the other hand, environmentally friendly investments in the energy sector correspond, for the most part, to public-sector projects from the International Bank for Reconstruction and Development (IBRD). This trend is not only evident in the energy sector of the WBG but is also repeated in other sectors such as mining and forestry.<\/p>\n

Our analysis indicates that the IBRD, as the arm that finances the public sector, supports projects that reduce GHG emissions, in line with commitments made in the CCAP. In contrast, the IFC, which leads the private-sector side, continues to promote investments in dirty energy, guarantee loans for the extraction of oil and gas, and fund projects with serious impacts on climate and the environment. These investments undermine the WBG\u2019s commitments in the CCAP, as well as commitments by countries in the Paris Agreement framework.<\/p>\n

Another area of concern involves the investments made through financial intermediaries (FI). These lending instruments are known to lack transparency. In this case, our report showed that approximately 40 percent of the investments were made through financial intermediaries. This is done through third parties, such as equity funds or commercial banks, which receive the money and then lend it to other clients or sub-projects, where the financial destination is unknown. Although the projects of financial intermediaries are supposed to follow the environmental and social standards of the institution that finances them (IFC or IBRD), they frequently lose control over the sub-projects, which prevents FIs from ensuring effective compliance with environmental and social standards.<\/p>\n

Likewise, among IFC’s investments for renewable energies, there are two category A projects, considered to be of higher risk. On the other hand, projects in the fossil fuel sector are categorized as B. By looking at the risk categorization only, the WBG seems to consider the fossil fuel sector to be less risky than the renewable energy sector. However, the fossil fuel sector, in terms of the direct and indirect environmental impacts it generates, tends to be riskier than that of renewable energies, in light of the pollution produced in the extraction and use of fossil fuel.<\/p>\n

To promote energy investments aligned with the Paris Agreement, our report proposes to the WBG the following:<\/p>\n

\u2022 Include into the exclusions list to\u00a0upstream<\/em>\u00a0oil and gas projects and other projects that indirectly demand fossil fuels in the WBG lending;<\/p>\n

\u2022 Encourage the development of renewable energy policies within the framework of the private sector and not only in financing the public sector;<\/p>\n

\u2022 Stop financing physical and financial infrastructure that supports the generation of energy using fossil fuels;<\/p>\n

\u2022 Expand energy access programs through renewable energy, depending on the generation potential of each area;<\/p>\n

\u2022 Take advantage of the opportunity to stop financing, subsidizing or using fossil fuels; promote a clean, equitable, and distributed energy transition process; and only finance projects aimed at promoting an energy matrix that respects the environment and communities.<\/p>\n

For more information, the complete document can be downloaded\u00a0here<\/a>.<\/p>\n\t\t\t\n\t\t\t<\/div>\n\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"

The World Bank Group (WBG) recognizes climate change as a threat to global development that increases instability and contributes to poverty, fragility, and migration. In response to this challenge, in 2016 the WBG launched the Climate Change Action Plan (CCAP), which established general objectives for 2020 to create policies that strengthen resilience to the impacts of the climate change and the promote decarbonization, while alleviating poverty.<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[24,216],"tags":[],"can_campaign_tax":[87,139],"can_region_tax":[],"can_topic_tax":[],"can_body_tax":[],"can_event_tax":[],"acf":[],"yoast_head":"\nBlog 21.08.20: Climate Change Commitments and World Bank Group investments in Argentina: Are investments aligned with Climate change commitments? - Climate Action Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/climatenetwork.org\/2020\/08\/21\/blog-21-08-20-climate-change-commitments-and-world-bank-group-investments-in-argentina-are-investments-aligned-with-climate-change-commitments\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Blog 21.08.20: Climate Change Commitments and World Bank Group investments in Argentina: Are investments aligned with Climate change commitments? - Climate Action Network\" \/>\n<meta property=\"og:description\" content=\"The World Bank Group (WBG) recognizes climate change as a threat to global development that increases instability and contributes to poverty, fragility, and migration. 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