Only One Development Bank Vowing to Halt Funds for Fossil Fuels

Many of the world’s top development banks have vowed to step up their climate efforts at the COP28 summit, but so far only one has been bold enough to say it will halt funding for fossil fuel projects.

The news comes amid reports on Sunday that the COP28 president, Sultan Al Jaber, opposes calls for a halt to the use of fossil fuels – a revelation that is hardly surprising given he is also the head of the United Arab Emirates’ state oil company, Adnoc.

That clash of interests and thinking is bubbling through the ranks at the climate summit, as many experts had predicted.

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In a statement announced at the event in Dubai, the World Bank and its regional peers said the window of opportunity to secure a liveable planet is “rapidly closing”.

Calls to overhaul the way the banks are run in response to the climate crisis have picked up amid record extreme weather events, and while the group disbursed a record $61 billion in finance in 2022, it remains just a fraction of what is needed.

With global emissions rising and despite UN Secretary-General Antonio Guterres telling world leaders on Friday that ending fossil fuel use was the only way to save the planet, the banks’ statement made no direct mention of the issue. Whether that was a ‘courtesy’ extended to the hosts in Dubai is not known.

COP28 chief opposes phase-out of fossil fuels

But the depth of the crisis that the world is facing was made plain on Sunday when the Guardian and the Centre for Climate Reporting revealed the thinking of COP28 president, who they said claimed recently there was “no science” indicating that a phase-out of fossil fuels is needed to restrict global heating to 1.5C.

Al Jaber also said a phase-out of fossil fuels would not allow sustainable development “unless you want to take the world back into caves”.

Scientists said Jaber’s comments were “incredibly concerning” and “verging on climate denial” – at odds with the position of UN chief Guterres, the paper said.

“Al Jaber made the comments in ill-tempered responses to questions from Mary Robinson, the chair of the Elders group and a former UN special envoy for climate change, during a live online event on 21 November,” the Guardian said.

“More than 100 countries already support a phase-out of fossil fuels and whether the final Cop28 agreement calls for this or uses weaker language such as ‘phase-down’ is one of the most fiercely fought issues at the summit and may be the key determinant of its success,” it said.

EIB the sole big lender vowing to block fossil fuel funds

To date, the European Investment Bank is the only one of the signatories to sign the so-called ‘Glasgow Declaration’ and committed to stop lending to fossil fuel projects, because the burning of the energy sources causes the bulk of human-induced greenhouse gas emissions.

Going forward, the development banks said they plan to agree a common approach to tracking and reporting climate impact, and would scale up the use of analytics to help countries identify priorities and investment opportunities.

A new, joint Long-term Strategies Program, hosted by the World Bank, would coordinate support to help countries and sub-national entities develop plans around issues including decarbonisation and climate resilience.

The group also pledged to help countries set up platforms to encourage a “collectively reinforcing combination” of support including around policy reform, finance and technical assistance.

To attract more private capital, the group said it would look at activities including removing “distorting” subsidies and developing pipelines of green projects.

The banks planned to scale up finance to help countries adapt to the impacts of climate change, including through boosting support for disaster risk management, disaster preparedness and capacity building.

They also planned to “strengthen collaboration” across nature, water, health and gender.

“Reflecting the urgency and scale of the issues to be addressed, we are boosting our joint action on climate and development, strengthening our collaboration to scale up finance and enhance results measurement, strengthen country-level collaboration, and increase co-financing and private sector engagement,” the statement said.