Research reveals lack of direct climate connection in hundreds of World Bank projects

A recent report from the US has questioned the World Bank’s spending on climate change projects over the past two decades. The report, conducted by researchers at the Center for Global Development and the Breakthrough Institute, examined over 2,500 projects listed in the World Bank climate portfolio. It found that “hundreds” of these projects had little to do with climate change mitigation or adaptation. The authors of the report concluded that the project documents provided no clear explanation for why these projects were labeled as climate change projects.

The release of this report coincides with the start of Ajay Banga’s term as president of the World Bank. The bank has faced criticism for its lack of action on climate change under its previous leader, who was appointed by President Trump. Climate finance reform will be a central topic of discussion at a summit in Paris next week, which Banga will attend.

The researchers highlighted several loans made by the bank that were labeled as having climate benefits, but which appeared to have no direct connection to climate change. For example, loans aimed at improving municipal transparency in Gaza, boosting teaching quality in Mexican higher education institutions, and increasing access to healthcare for girls and women in Chad were all included in the bank’s climate portfolio. World Bank officials defended this approach, stating that climate objectives were embedded into development lending as a whole, rather than targeting specific climate projects. They argued that while some projects may not directly reduce emissions, they could contribute to climate goals indirectly, such as preventing deforestation.

However, the researchers found that even when projects were labeled as having a small percentage of their benefit as a climate benefit, the link to climate change goals was unclear. They cited a loan for payment automation in Afghanistan, which had a 1% climate benefit score but had no clear climate-related outcomes. The researchers also noted that many climate mitigation projects lacked estimates of greenhouse gas emissions reductions, and there were no standardized reporting requirements for greenhouse gas estimates across the portfolio.

In response to these findings, World Bank officials stated that not all working papers supporting the calculations of project benefits were disclosed. They acknowledged the need for improvement and mentioned that the bank was working on a new methodology to measure the impact of its climate adaptation and mitigation spending in the future.

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