How does the bank protect the environment in the course of its work?
The World Bank brings a mix of money and knowledge to help governments in poor countries protect the environment. As of end-Fiscal Year 2007 (end June 2007), the World Bank had approved 64 projects with environmental and natural resource management (ENRM) content amounting to $2.0 billion in commitments.
The two largest new lending projects with ENRM themes in terms of ENRM lending commitment amounts were the Second Programmatic Development Policy Loan for Sustainable Development in Colombia (total loan amount: $ 200 million) and the Tamil Nadu Irrigated Agriculture Modernization and Water-Bodies Restoration and Management Project in India (total loan amount: $485 million).
Furthermore, in addition to investment projects, our Country Environment Analyses (CEA) and Strategic Environment Assessments (SEA) help countries to systematically evaluate their environmental priorities, the environmental implications of key policies, and their capacity to address development priorities and related environmental concerns. Over the last five years, CEAs have contributed to informing policy reforms (eg. Colombia CEA), identifying lending operations (eg. Bangladesh, Egypt, Tunisia, Peru CEAs), integrating environment into CASs (Egypt CEA) and PRSPs (eg. Bangladesh CEA), informing Development Policy Lending (DPLs) (eg. Guatemala, El Salvador CEAs), and improving donor coordination (eg. Ghana, Egypt, Tunisia CEAs).
In addition, we work with partners in the international community to pursue our environmental goals.
What are the priorities of the bank's environmental lending programs?
Our International Development Association (IDA) and International Bank for Reconstruction and Development projects with environmental and natural resource management activities were worth $10.3 billion as of end-FY 2007– representing about 11 percent of the total Bank portfolio. Of this, the core ENRM portfolio (projects with more than 65 percent ENRM content) amounted to $2.6 billion in commitments.
Of this amount, about 35 percent was committed for pollution management and environmental health ($3.61 billion); 26 percent for water resources management ($2.97 billion); 12 percent for land management ($1.06 billion); 10 percent for environmental policy and institutional development ($1.23 million); 9 percent for climate change initiatives (US$822 million); and 3 percent for biodiversity ($283 million).
So, more than one-third of our active environmental and natural resources management portfolio commitments were concentrated on pollution management and environmental health issues. A quarter of our commitments focused on water resources management.
How is the World Bank helping to protect the global environment?
In addition to International Development Association (IDA) and International Bank for Reconstruction and Development (IBRD) projects, we and our partners, the United Nations Development Programme (UNDP) and the United Nations Environment Programme (UNEP), jointly implement the Global Environment Facility (GEF). We use this facility to help borrowing countries address regional and global environmental objectives. Since the inception of the GEF, the World Bank Group has mobilized $3.6 billion (end FY2007) in biodiversity conservation, climate change, ozone depleting substances, land degradation, POPs, and international waters. In FY 2007, 23 new GEF projects were approved for $221 million in GEF financing.
The World Bank is also the implementing agency for the Multilateral Fund for the Implementation of the Montreal Protocol (MP) to eliminate the production and consumption of ozone-depleting chemicals. Over the past 16 years, the Bank has implemented more than 600 investment and technical assistance projects worth nearly $889 million to phase out almost 277,000 metric tonnes of ozone depleting potential (as of end-FY2007). In the first half of 2007, the World Bank received approvals totaling $30 million for tranches of sectoral phase-out plans for the production of CFC in China and India, and another $6 million for a new plan in China to phase out consumption of CFCs in pharmaceutical aerosols over a two-year period.
The Bank’s Carbon Finance unit, which aims to leverage new private and public investment into projects that reduce greenhouse gas emissions, administers more than $2 billion through 101 carbon funds and facilities created by 16 governments and 65 private companies.
Is environmental sustainability compatible with economic growth?
Definitely yes, even though maintaining a sustainable environment is an integral and difficult part of the challenge to stimulate economic growth in developing countries. Environmental factors such as indoor and outdoor air pollution, waterborne diseases, and exposure to toxic chemicals threaten the health of millions of people, while natural resources, land, water, and forests are being degraded at alarming rates in many countries.
Some 5 to 6 million people in developing countries die each year from water-borne diseases and air pollution. In many developing countries, the economic costs of environmental degradation have been estimated at 4 to 8 percent of GDP per year. Simultaneously, far-reaching trends such as globalization, the growing role of the private sector and of civil society, and rapid technological advances have been reshaping the world, causing development and environmental challenges to be ever more intertwined.
There are many win-win opportunities to simultaneously achieve economic, social, and environmental objectives. Balancing these aspects of development through everyday decisions, however, involves value judgments and societal choices, which often require difficult tradeoffs. These tradeoffs among generations, social groups, and countries influence what different people see as sustainable development.
Over-fishing, for example, may temporarily improve people’s income, making conservation seem costly. But the costs of conservation will pay off if they help avoid the collapse of fisheries, which deprives people of both nutrition and income in the longer term. Similarly, the considerable social costs of pollution can justify the costs of measures that prevent and mitigate it. While countries and societies may differ in their choices about environmental priorities and other aspects of sustainable development, these choices have to be informed by sound analyses and the participation of key affected stakeholders.
The challenge for the World Bank and other institutions concerned with development assistance is to work with clients to develop and implement policies, programs, and investments that not only support continued economic development but also:
distribute the gains of development in a more equitable manner, with a particular focus on reducing poverty;
avoid sacrificing the interests of future generations to meet the needs of the current generation; and
build on the emerging global consensus that natural resources and other valuable environmental assets must be managed in a sustainable manner
Why does the bank support the construction of dams?
We support selected dam projects because they improve and expand power generation, irrigation, and water supplies that are vital for human and economic development and. Dams also provide security against droughts and protection from floods. Our support for water infrastructure in developing countries, however, doesn't begin and end with dam construction. In some countries it means building canals, pumping stations, bridges, irrigation systems, and underground water storage facilities.
In the past 10 years, financing for safer and more efficient dam management has become an important component of dam-related lending. The World Bank acts preferentially as a co-financier, and quite often as a guarantee undertaker, in dam projects. Adding to the role of the private sector and other sources of financing, direct Bank support of dam projects is in the order of 0.5 to 1 percent of global financing. That figure peaked to 3 to 4 percent in the 1960s and 1970s, but has since then stabilized within the above mentioned range.
The World Bank engages with water utilities along the continuum of public-private participation in order to bring the benefits of safe, clean, and affordable water to people in developing countries. What counts is to get better water supply and sanitation to more people. Helping utilities to become more efficient and effective organizations is critical. The Bank does not promote privatization as an ideology, and does not make privatization a precondition for lending.
To date, private financing in water supply and sanitation has accounted for less than 10 percent of total investment in developing countries, and has decreased in the past few years. Public financing is, and will remain, the most important source of financing in the years to come.
What are the bank and its partners doing to save the forests of the Amazon and other areas of the world?
Sustainable management of forests is critical to the Bank’s mission because of forests’ contribution to the livelihoods of the poor, the potential they offer for economic development, and the essential global environmental services they provide. In 2002 the World Bank adopted a new Forest Strategy that takes a holistic approach to achieve the broad objectives of poverty alleviation, sustainable economic development, and environmental conservation. Since adopting the more proactive approach to Bank engagement in forests, the World Bank Group’s forests portfolio has grown, up from $179 million in FY01 to $359 million in FY06.
Through strategic partnerships and programs such as the World Bank/WWF Alliance, the multi-donor Program on Forests (PROFOR), and the Forest Law Enforcement and Governance (FLEG) initiative, the Bank is leveraging resources, aligning stakeholder interests, enabling innovation, improving outreach, and scaling-up impacts.
To further galvanize synergies among forest stakeholders, a new partnership initiative is currently underway – the Global Forest Alliance (GFA) 2015. The GFA 2015 is envisioned as a tool to help client countries seize new opportunities for the forest sector, such as avoided deforestation in relation to climate change. The GFA 2015 aims to raise concessional financing and grants for the sector and leverage partnerships to their maximum potential toward achievement of the Forest Strategy goals.
