The World Bank has amended its new five-year climate action plan, which includes a commitment to making financing decisions in line with the Paris Accord, but stops short of pledging to stop fossil fuel funding, Reuters reported, citing an internal presentation draft. The move came after the US, the bank’s largest shareholder is drafting plans to end US funding for international fossil fuel projects.
The draft is not final and still requires approval from the bank’s board. According to the report, the Multilateral Investment Guarantee Agency (MIGA) and the International Finance Corporation (IFC), the World Bank’s sister organisations, will align 85% of their direct funding with the Paris Accord by 2023 and 100% by 2025.
The Paris Climate Agreement aims at limiting the global temperature increase to 1.5 degrees Celsius. Meeting this goal will require massive investment to quickly shift away from polluting energy sources to renewables. Investments are also needed to decarbonise the transportation and manufacturing sectors.
The World Bank and its sister organisations surpassed targets to use 28% of their financing in climate-related projects by 2020, the presentation showed. They aim to increase it further to 35% over the next five fiscal years. Many economists praised the new climate policy as the bank’s major step to a green economy. However, some others criticised it for not including commitments to stop all investments in oil and coal projects and to gradually phase out investment in natural gas projects.
