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World Bank Offers "Green Top Ten" in Advance of UN Earth Summit

Press Release No:97/1377 S
Phil Hay (202) 473-1796
Clare Fleming (202) 473-2874
Kristyn Schrader (202) 458-2736 

WASHINGTON, June 5, 1997 Today, on World Environment Day, the World Bank presents ten measures which, it believes, can exert real impact on improving and protecting the environment. The call comes as world leaders, including President Clinton, and other dignitaries such as World Bank President James D. Wolfensohn, prepare to attend a Special Session of the UN General Assembly on the Environment in New York later this month.

The Earth Summit+5, as the UN session is called, will assess how much progress has been made on environmental priorities such as global warming, depletion of tropical forests, air pollution, and water conservation, since the first Earth Summit was held in Rio de Janeiro in 1992.

The World Bank says that despite encouraging progress in some of these areas, for example, reducing lead in gasoline and cutting the use of ozone-depleting chemicals, the current state of the global environment remains cause for profound concern. It notes that carbon dioxide emissions in developing countries have jumped by nearly 25 per cent since Rio, that pollution continues to worsen in many world cities, with 1.3 billion people still affected by poisonous air, and that tropical plants and bird life continue to be lost at a rapid rate.

According to the World Bank's Managing Director of Operations, Caio Koch-Weser, the bank is deeply concerned about the lack of momentum since the Rio Summit. He says the time has come for greater global partnership between industrialized and developing countries, UN agencies, private business, universities, international banks, local communities, non-governmental organizations, and other groups to forge a more strategic approach for safeguarding the environment.

"As central to this approach," says Andrew Steer, Director of the Bank's Environment Department, "we are presenting a list of ten measures which could make a real difference to the environment in the long-term."

  • Phase out Lead in Gasoline Within Five Years
  • Move Toward More Aggressive Elimination of CFCs
  • Build Global Carbon Markets to Reduce Climate Change
  • Make Water an Economic Asset
  • Make Cities More Livable
  • Conserve and Manage Critical Ecosystems on Land and at Sea
  • Commit New Money for the Global Environment Facility (GEF)
  • Build Alliances to Transform the Marketplace
  • Adopt Greener Accounting and Eliminate Harmful Subsidies
  • Apply Environmental and Social Assessment Consistently

"As the new millennium approaches, we must step up efforts to work together as partners in this critical pursuit of protecting the environment," says Caio Koch-Weser. "Together we must take steps to transform the marketplace so that environmental and social concerns are addressed right from the very beginning. No less than the future of the planet, and the quality of life it affords mankind, are at stake."

Echoing the call for greater partnership, Andrew Steer adds that the Bank has developed a close working relationship with many of the leading environmental groups, including the World Conservation Union (IUCN), which is the largest umbrella group of conservation organizations in the world. Steer says he was especially gratified that the president of the IUCN, Yolanda Kakabadse of Ecuador, and its assistant director-general, George Greene, were able to attend today's press conference.

The World Bank is now the world's leading financier of environmental reforms in the developing world, with $11.5 billion in loans for 153 projects in 62 countries. Bank Group President, James Wolfensohn, will address the UN Earth Summit +5, June 23-27, to appeal for a renewed campaign to protect the world's natural heritage, and outline the World Bank's efforts in support of the goals of the Rio Summit.

World Bank "Green Top Ten"

  • Phase out Lead in Gasoline Within Five Years-The Bank calls for a global conversion from leaded to unleaded fuel to reduce air pollution and health problems associated with lead exposure. Phased-out so far in 18 countries, including Brazil, Canada, Thailand, and the United States, leaded gasoline is believed to be responsible for neurological damage and heart disease among children, especially in developing countries. The Bank says that countries could recover their costs of conversion 5 to 10 times over through reduced health care costs and economic savings. The United States, for example, saved more than $10 for every $1 invested in its conversion. The Bank would stand ready to assist governments in introducing policies and programs to assist in the complete phase-out of leaded fuel.
  • Move Toward More Aggressive Elimination of CFCs-The Bank says helping Russia curtail its production and use of chlorofluorocarbons, or CFCs, could arrest further depletion of stratospheric ozone. With help from a $60 million joint World Bank-Global Environment Facility initiative, the Russian Federation has now agreed to phase out CFCs by the year 2000-but needs modest financial support from the industrial countries. The Bank says this could be repeated in China, India, Korea, Venezuela, Brazil, and Mexico, the world's other significant CFC producers, if the international donor community can provide the necessary financial support.
  • Build Global Carbon Markets to Reduce Climate Change-As an agency closely involved in putting the Climate Change Convention into practice, the World Bank is exploring innovative remedies for the growing problem of climate change. One promising avenue is the concept of building global markets for trading greenhouse gas emissions. In other words, a company in one country may meet the Convention's emission standards by investing in pollution reduction in another country. This mechanism could lower the costs of reducing global emissions, and promote more ambitious global climate policies. Recent pilot projects by countries such as Costa Rica should be widely supported. The Bank is also encouraging private companies to finance renewable energy development in countries such as Indonesia and India.
  • Make Water an Economic Asset-Water has long been considered a special commodity and not a normal economic resource. Subsidies to households, farmers, and other users have been commonplace throughout the world. This approach has proved to be unfair since it is always the rich who benefit from these subsidies, while the poor often miss out. About 1 billion people still lack access to formal water supply services. In urban areas the poor, who mostly lack domestic running water, typically have to buy their water from vendors, paying 10 times more for a gallon of water than someone with a municipal water connection. Furthermore, subsidies mean that water is wasted. With water scarcity a fact of life in many developing countries, it is imperative that water be treated as a precious, economic, resource. This means that the price of water should reflect the actual costs involved in delivering water, that the private sector should play a greater role in financing and managing water systems, and that market mechanisms (such as tradable water rights and pollution charges) need to become more universal.
  • Make Cities More Livable-The World Bank warns that in developing countries, where millions of people are leaving rural areas for the cities, urban environmental problems impose considerable costs, especially in damage to the personal health of mostly poor residents. After nearly 25 years of helping the developing world cope with urban problems, during which it has supported more than 50 projects worth $6 billion in 30 countries, the Bank believes that making cities more livable depends on tackling environmental problems which cause the greatest harm and can be solved at modest cost. For example, the harmful effects of inhaling dust and soot from vehicle exhaust, power plants, cooking, and trash burning can be greatly reduced in industry with modest investments in dust collection and filters, and greater vigilance on the shopfloor. The Bank notes that 18,000 fewer people would die prematurely in 18 Central and Eastern European cities, with annual savings of more than $1.2 billion in working time gained, by achieving European Union air pollution standards. The Bank also argues that microbial diseases in drinking water contaminated by rats, flies, and mosquitoes cost billions of dollars in lost lives and bad health in developing countries' cities. With modest investment in cleaner water supplies, together with efforts to improve urban air quality, the Bank believes that cities can be made more livable for millions of the world's people.
  • Conserve and Manage Critical Ecosystems on Land and at Sea-Many areas of unique natural value continue to degrade due to lack of protection. A targeted approach is required. Recently the Bank has partnered and supported organizations such as Conservation International, Worldwide Fund for Nature, and IUCN in identifying priorities for action. On land and sea, the Bank is providing widespread support for establishing and managing protected areas around the world. The partnership between the Bank and IUCN has produced a number of innovative biodiversity initiatives, including the Global Representative System of Marine Protected Areas. The Bank is helping developing countries make projects in agriculture, forestry, energy, tourism, coastal zone management, and urban and infrastructure projects more "biodiversity friendly". For example, projects in Honduras, Nicaragua, and Panama promote sustainable agriculture to alleviate poverty and discourage the expansion of farming activities into the Atlantic forests of the Meso-American Biodiversity Corridor. Other projects like Indonesia's COREMAP promote conservation, and sustainable use of some of the world's richest coral reefs and other coastal ecosystems.
  • Commit New Money for the Global Environment Facility (GEF)-The World Bank calls for a substantial new cash injection for the Global Environmental Facility, or GEF. Created in 1991 with a $2 billion inaugural fund, the GEF provides grants to developing countries to help them reduce the risk of climate change; promote biodiversity; protect international waters; and phase out ozone-depleting substances, such as CFC's. With GEF-sponsored success stories growing throughout the developing world, such as a biodiversity protection project in Belarus and an energy efficiency project in Thailand, the Bank says the Facility should be replenished with new money. Discussions among governments concerning replenishment are currently underway.
  • Build Alliances to Transform the Marketplace-Moving from present to sustainable practices is hampered in many economic sectors by high risks, lack of knowledge and finance, wrong economic incentives, and the absence of "green" markets. The World Bank believes that removing such barriers throughout the value chain will require active partnerships among private investors, NGOs, governments, financiers, and local communities. Toward this end, the Bank will be supporting such "Market Transformation Initiatives" in forestry, marine industries, and solar energy.
  • Be Consistent with Environmental and Social Assessment-Techniques are currently available to ensure that environmental and social concerns feature prominently in policy and project design, yet these are inconsistently applied. The World Bank calls on international financial institutions (including export credit agencies) to harmonize their standards and apply them consistently. The Bank is currently actively strengthening its own practices and-in partnership with IUCN and other groups-has embarked on a major training and capacity-building program in Africa. Ensuring consistently high standards is especially important for potentially damaging investments in infrastructure and energy. The establishment of an independent "commission" on large dams, agreed upon last month at a meeting convened by the World Bank and IUCN, is an important effort to ratchet up performance in this sector.
  • Adopt Greener Accounting and Eliminate Harmful Subsidies-Traditional measures of economic progress ignore the depletion of natural resources and the subsequent costs of environmental damage. The Bank has been in the vanguard of efforts to link economic and environment issues by expanding the measure of a country's wealth to include natural resources-using a greener measure of wealth will improve both economic and environmental policy-making. The Bank calls for increasing the application of greener accounts that can serve as indicators of the economic benefits of reducing environmental damage and the costs of depletion. In addition, the World Bank, together with the Earth Council and other concerned agencies, urges the rapid phase-out of subsidies on natural resource consumption. The Bank estimates that subsidies on fossil fuels have dropped by 50 percent since 1992, but still stand at $58 billion. The Earth Council has estimated that total subsidies still amount to $800 billion, including $45 billion on water, $150 billion on transport, and $2 billion on pesticides. These subsidies rarely benefit the poor and invariably harm the environment.

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