C L I M AT E C H A N G E A N D T H E W O R L D B A N K G R O U P
About seven years later, four strategic documents reemphasized the themes of the 1992 World Development Report, while elevating the prominence of climate change. Come Hell or In the late 1990s, High Water (World Bank 1999) was strategic documents concerned with climate change vulnerelevated the prominence ability and adaptation. It found that of climate change. climate change risks were not well assessed in project preparation or in Country Assistance Strategies (CASs) and recommended attention to current and future climate variability. Fuel for Thought: An Environmental Strategy for the Energy Sector (World Bank 2000) drew attention to mainstreaming energy into CASs and operations. It stated, “At the heart of mainstreaming environment within the Bank is the elimination of market distortions, particularly in energy pricing. As long as energy prices are subsidized or not at market level, and as long as gross interfuel pricing differences remain, it is difficult to formulate cost-effective measures to mitigate pollution from energy use.” With an emphasis on reducing the damages of local air pollution, Fuel for Thought stressed the need for a cross-sectoral perspective and proposed the use of “Energy-Environment Reviews” as an upstream analytic tool for promoting this perspective. One of the document’s strategic objectives was to “mitigate the potential impact of energy use on global climate change.” Its mediumand long-term outcome indicators for achieving this objective (through fiscal year 2008) include energy-efficiency programs in 10 states or countries; development of cleaner sources of energy (no quantitative goals); increasing the volume of energy trade among at least 6 countries; and doubling of power generation through renewable energy sources in at least 10 borrowers. Reviewing post-1992 progress on this agenda, Fuel for Thought drew three main lessons: That more time than initially estimated is needed to achieve results on environmental and social issues; that commitment is often missing on the part of the borrower to 24
stay the course and to achieve real change; and that while there is strong engagement in the reform agenda, the strength of the Group’s commitment to energy efficiency and the environment is not what it should or could be. The Group must substantially increase its efforts and improve its staff and skills mix if it is serious about implementing its principles in these areas. The World Bank Group’s Energy Program was presented to the Board of Directors and published in 2001. Although not a formal policy document, it reported that the “World Bank Group has set quantitative objectives for developing and transition economies to be reached by 2010.” These included “reducing the average intensity of carbon dioxide emissions from energy production from 2.90 tons per ton of oil equivalent to 2.75” and “reducing the average energy consumption per unit of GDP from 0.27 ton of oil equivalent per thousand dollars of output to 0.24.” The World Bank Group Environment Strategy of 2001 dealt at length with the “threat posed by climate change to the development process.” It continued to stress the twin themes of no-regret policies (including energy sector reform, energy efficiency, and fuel switching), together with continued collaboration with the GEF on renewables and use of the Prototype Carbon Fund (PCF) as a pilot to demonstrate the potential for carbon trading under the Kyoto Protocol. The strategy also pointed to mitigation opportunities in forestry and transport and promoted attention to mainstreaming efforts in climate adaptation. It stressed the use of Strategic Environmental Assessments, including Energy-Environment Reviews to ensure that local and global environmental issues are considered in the context of energy systems choices. The World Bank Group reports that it committed $6.1 billion to renewable energy and $2.1 billion to energy efficiency during 1990–2004. In 2004, in Bonn, the World Bank Group made a commitment to expand its investments in new renewables (excluding large hydropower) and