The World Bank Group has given another major blow to the fossil fuel industry. In a big announcement on Tuesday at the One Planet Summit in Paris, they shared they'll no longer be financing upstream oil and gas after 2019. It’s a move that will help guide countries to their pledges to eliminate carbon emissions and sets a new bar for other financial institutions to follow.
World Bank will no longer finance oil and gas exploration and extraction on a large scale, but completely eliminating it could harm very poor countries. They’ve still opened the door for “exceptional circumstances” where this would be “a clear benefit in terms of energy access.” The project would still have to adhere to the specific country’s Paris Agreement goals.
Other information announced at the summit includes more transparent information released on projects World Bank funds in the future, such as the amount of greenhouse gas emissions. These results will be released annually beginning in late 2018. The financial institution will also meet their goal of 28 percent of investments going toward climate action by 2020.
At the moment, up to two percent of World Bank’s $280 billion investments have been going toward oil and gas projects. However, they’ve stopped supporting coal-fired power plants and thermal coal mining, and this new announcement will put a halt to the majority of all fossil fuel extraction.
According to an Oil Change International report back in July, G20 governments (which includes the United States) and multilateral development banks (including World Bank) put in $71.8 billion annually for fossil fuels between 2013 and 2015. That’s compared to $18.7 billion for alternative clean energy in the same timespan, just 15 percent of total investment.
Stephen Kretzmann, Oil Change International’s Executive Director, praised the announcement by World Bank: “Environmental, human rights, and development campaigners have been amplifying the voices of frontline communities for decades in calling for an end to World Bank financing of upstream oil and gas projects.”
Kretzmann added that he looks forward to working with the financial institution and believes it’s time for any other investors in the Paris Agreement to stop funding fossil fuels. The United States pulled out of the agreement earlier this year. After Syria joined in early November, the US is now the only country opposed to the climate pact. However, that hasn’t stopped numerous communities and businesses from continuing their carbon reduction goals.
Support and funding dropping for fossil fuels weren’t the only hits received at the summit. 237 companies will join World Bank in being more transparent on risks from carbon emissions generated and what effort they’re making to become green. Their results will be released when they meet in Argentina next year.
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