10 February 2008

Global Climate Change: World Bank Eyes Global Warming and Clean Tech With New Fund

Readers of this blog know that I'm a WB cynic (and I'm not talking the TV network). I'm not much of a fan of World Bank-directed solutions to the world's most pressing problems. If you haven't read White Man's Burden by William Easterly, you should, and you'll understand why.

So perhaps that's why I'm not jumping for joy at the announcement on Friday that "poor countries will soon receive billions of dollars from a new World Bank fund to help them cut pollution, save energy and fight global warming."

Industrialized (or post-industrialized?) countries like the US want developing countries to do their share to dramatically reducing their emissions. Developing countries want financial help to cut their growing emissions. And there's an obvious gulf between the two positions.

I believe developing countries should be allowed to develop their economies without too much interference from the likes of us. That said, why should those same countries have to do it the old fashioned way?

As with mobile phones and wireless networks, we should encourage developing countries to leapfrog tired, polluting and otherwise wasteful technologies for something better, cleaner, brighter -- and maintain their economic growth.

If the World Bank fund focuses on supporting "publicly and privately financed projects that deploy technologies that can cut emissions, increase efficiency and save energy in developing countries," as the US, British, and Japanese finance ministers said in the Financial Times on Friday, then great. If it goes the way of other World Bank interventions, then we're in trouble. At least the WB seems to be learning from its mistakes.

President Bush will cough up some of the US$2bn that he pledged last month to augment the World Bank clean technology fund, which will be combined with US$1.5bn more from the UK, and at least some of the US$10bn that Japan announced in January, according to Hank Paulson and his colleagues Alistair Darling and Fukushiro Nukaga.

"Without moving growth on to a cleaner technology path, climate change could have a devastating impact on the world’s poorest and most vulnerable people," wrote the 3 Tenors of Finance in FT. "The fund will be an important step towards meeting the challenge of creating an environmentally sustainable path to prosperity."

The World Bank says it will establish "a strategic climate investment facility that would accelerate and scale up low carbon and climate-resilient investments in developing countries."

Let's hope the fund focuses on appropriate, local solutions for leapfrogging rather than the large-scale planning exercises we've come to expect from the WB.

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