Two leading financial institutions agree that immediate action must be taken on climate change while world waits for global deal
By Sophie Yeo
Getting a global deal on climate change is critical, according to World Bank President Jim Yong Kim, but financial institutions must remember that immediate action is also possible.
Speaking today alongside Christine Lagarde, the Managing Director of the International Monetary Fund, both agreed that climate change had to be a central priority going into the future.
Legarde said, “It is important that our two institutions always have climate change, environmental issues and price setting at the forefront of our agenda.” It is very easy, she emphasised to return to a “business-as-usual” scenario, after events like Hurricane Sandy, which briefly put climate change into people’s consciousness.
She added: “We have got to think about it every day.”
Jim said that the priorities for the World Bank in tackling climate change are investing in sustainable energy for all, well-designed cities and climate smart agriculture.
Legarde said that her priorities were getting the price right on carbon, as well as removing energy subsidies. She said, “If you do it in the right way you can put subsidies where they are needed.”
Jim admitted that such measures were key, but also “politically difficult”. He added that the world was receiving more “encouraging signs” on the implementation of a carbon tax, and that the support of China, Europe and the US would prove critical.
Jim added that, while the obvious central role of the World Bank is to finance investments, the wealth of experience of their experience in working in developing countries was also critical, where they have helped develop cities and agriculture, as well as set up wind and solar micro-grids.
“People are surprised at how many successful projects there have been,” he said.
Despite Jim’s emphasis on sustainable energy, the World Bank has faced criticism this week from Oil Change International, whose analysis of the Bank’s last fiscal year revealed that it had increased its funding for fossil fuels to US$2.7 billion, even though it has publicly committed to phase out coal lending. Meanwhile, financing for clean energy has dropped.
Both emphasised that growth could be achieved at the same time as tackling climate change, particularly due to advances in technology.
Legarde ended with advice to finance ministers. She said, “You can raise revenue by doing the right thing. By the same token you can also take care of the future of your grandchildren.
“Please don’t assume that tackling climate change means that all your costs are going to go up.”