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The World Bank has officially expanded its mission to include climate change, while pushing ahead with reforms that could unlock additional funding and cheaper loans for green projects.

In his first major speech since taking office, President Ajay Banga said a set of measures to stretch its balance sheet could allow the bank to increase lending by up to $15.7 billion a year.

The extra funding would support the implementation of the bank’s new vision statement approved by its governing body on Thursday.

The historical objective to “end poverty” should now be achieved “on a livable planet”. The new mission will give the lender the formal mandate to tackle a whole range of global challenges, among which climate change is seen as the most urgent one.

Banga said this will widen the aperture through which the bank looks at its task in the future. “If you can’t breathe and cannot drink clean water, there is little point in eradicating poverty,” he added.

Year-long reforms

Announced at the lender’s annual meetings in Marrakech, Morocco, the changes come a year after a group of its biggest shareholders, led by the United States and Germany, called for its fundamental shake-up to deliver more climate finance.

The overhaul quickly picked up pace. Former chief David Malpass resigned early, after sparking an outcry with climate sceptic comments, and was replaced by Banga, a former Mastercard CEO, who promised far-reaching reforms.

Banga is seeking to create a “better and bigger” bank capable of plugging a few more of the huge gaps in the provision of climate finance to developing countries.

But a lack of appetite to inject fresh funds into its coffers directed the focus on financial tweaks to make the existing capital go further. The reforms mainly concern the International Bank for Reconstruction and Development (IBRD), the lending arm for middle-income countries.

Accounting tweaks

The first concrete step came in April when the bank lowered its equity-to-loan ratio from 20% to 19%, freeing up $4 billion a year.

The lender is also creating a programme of guarantees backed by shareholders, which would step in to cover potential losses if borrowers cannot repay their loans. The measure would offload some of the risk currently shouldered by the World Bank to its donors, allowing the bank to channel those reserves into more new lending.

Another option under development is the launch of a hybrid capital mechanism, which allows shareholders to inject new funds by investing in special bonds issued by the World Bank.

US Treasury secretary Janet Yellen at the World Bank annual meetings in Marrakech. Photo: World Bank / Franz Mahr

Taken together, this suite of tools could boost the bank’s lending capacity by $157 billion over the next decade, Banga said on Friday.

He added that the plans have been “met with enthusiasm and generosity”. But, crucially, their potential will only be realised if shareholders fork out the money.

Saudi Arabia, Russia urge World Bank to keep funding fossil fuels

The US government favours the guarantees plan and wants Congress to approve $2.1 billion in new funding that could unlock $25 billion in new loans. Germany has become the first country to pledge 305 million euros ($321 million) of “hybrid capital”.

Cheaper energy loans

Another element of Banga’s blueprint is the extension to middle-income countries of the cheap loans that are currently exclusively offered to low-income ones. The concessional resources currently available “are insufficient to deliver on the new vision and mission”, a paper outlining the bank’s reforms said.

The rollout of clean energy in high-emitting countries is one of the primary areas the lender would be targeting with these measures.

“We’re investigating if we can reduce interest rates to incentivize exiting from coal as part of energy transitions,” said Banga, “and find ways to encourage a renewable energy transition by increasing concessional finance in the mix.”

A thermo-solar power plant supported by the World Bank. Photo: Dana Smillie / World Bank

Danny Scull, an analyst at E3G, said this is a welcome step as incentivising countries like India and Brazil to take out cheaper loans for climate action will benefit the whole world.

Amid all the optimism, the World Bank chief added words of caution on how far his organisation can go without external help.

An influential panel of experts commissioned by the G20 said in July that development banks need to triple their lending levels by 2030 if they want to make a serious dent in the trillions of dollars of climate finance needed by developing countries.

Appeals for more capital

“The World Bank is merely an instrument that reflects the ambition of our shareholders,” said Banga, “the progress we aspire to achieve requires our resources and capital to be commensurate with our vision.” In other words, governments need to inject more money into the bank to fulfill this new mission.

But support for a direct capital increase is limited. The UK is the only major Western country in favour of the idea, which is strongly championed by developing nations, China and India above all.

World Bank targets dirty subsidies to fund climate action

For the US and Japan – the bank’s biggest shareholders – these discussions prompt a  headache. They would need to contribute most to a capital increase, if they are to avoid their percentage ownership of the bank being watered down, perhaps as the share of geopolitical rival China rises.

Private sector engagement

Among rich countries, the preferred solution is to get the private sector to stump up more money.

Banga agrees, saying the lender needs “the scale, resources, and ingenuity of the private sector”. But he also acknowledged that “meaningful, sustainable progress has evaded us” on that front.

To change that equation the World Bank has set up a forum with a group of CEOs from some of the world’s biggest companies.

Banga said the initiative is initially focused on increasing private investment in renewable energy and the energy transition in developing countries.

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IEA: Renewables have cut fossil-fuel imports for more than 100 countries

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More than 100 countries have cut their dependence on fossil-fuel imports and saved hundreds of billions of dollars by continuing to invest in renewables, according to the International Energy Agency (IEA).

It says nations such as the UK, Germany and Chile have reduced their need for imported coal and gas by around a third since 2010, mainly by building wind and solar power.

Denmark has cut its reliance on fossil-fuel imports by nearly half over the same period.

Renewable expansion allowed these nations to collectively avoid importing 700m tonnes of coal and 400bn cubic metres of gas in 2023, equivalent to around 10% of global consumption.

In doing so, the fuel-importing countries saved more than $1.3tn between 2010 and 2023 that would otherwise have been spent on fossil fuels from overseas.

Reduced reliance

The IEA’s Renewables 2025 report quantifies the benefits of renewable-energy deployment for electricity systems in fossil fuel-importing nations.

It compares recent trends in renewable expansion to an alternative “low renewable-energy source” scenario, in which this growth did not take place.

In this counterfactual, fuel-importing countries stopped building wind, solar and other non-hydropower renewable-energy projects after 2010.

In reality, the world added around 2,500 gigawatts (GW) of such projects between 2010 and 2023, according to the IEA, more than the combined electricity generating capacity of the EU and US in 2023, from all sources. Roughly 80% of this new renewable capacity was built in nations that rely on coal and gas imports to generate electricity.

The chart below shows how 31 of these countries have substantially cut their dependence on imported fossil fuels over the 13-year period, as a result of expanding their wind, solar and other renewable energy supplies. All of these countries are net importers of coal and gas.

Chart showing that many countries have significantly cut their reliance on fossil-fuel imports by building renewables
Share of national electricity supplies that depend on imported fossil fuels in 2023, actual (left) and in the IEA’s “low renewable-energy source” scenario (right), in 31 countries that are net importers of coal and gas. Source: IEA.

In total, the IEA identified 107 countries that had reduced their dependence on fossil fuel imports for electricity generation, to some extent due to the deployment of renewables other than hydropower.

Of these, 38 had cut their reliance on electricity from imported coal and gas by more than 10 percentage points and eight had seen that share drop by more than 30 percentage points.

Security and resilience

The IEA stresses that renewables “inherently strengthen energy supply security”, because they generate electricity domestically, while also “improving…economic resilience” in fossil-fuel importer countries.

This is particularly true for countries with low or dwindling domestic energy resources.

The agency cites the energy crisis exacerbated by Russia’s invasion of Ukraine, which exposed EU importers to spiralling fossil-fuel prices.

Bulgaria, Romania and Finland – which have historically depended on Russian gas for electricity generation – have all brought their import reliance close to zero in recent years by building renewables.

In the UK, where there has been mounting opposition to renewables from right-wing political parties, the IEA says reliance on electricity generated with imported fossil fuels has dropped from 45% to under 25% in a decade, thanks primarily to the growth of wind and solar power.

Without these technologies, the UK would now be needing to import fossil fuels to supply nearly 60% of its electricity, the IEA says.

Other major economies, notably China and the EU, would also have had to rely on a growing share of coal and gas from overseas, if they had not expanded renewables.

As well as increasing the need for fossil-fuel imports from other countries, switching renewables for fossil fuels would require significantly higher energy usage “due to [fossil fuels’] lower conversion efficiencies”, the IEA notes. Each gigawatt-hour (GWh) of renewable power produced has avoided the need for 2-3GWh of fossil fuels, it explains.

Finally, the IEA points out that spending on renewables rather than imported fossil fuels keeps more investment in domestic economies and supports local jobs.

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Panama environment minister backs calls for reform of UN climate process

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Panama’s environment minister has joined a growing push for reform of the UN climate change negotiations, proposed by campaigners and academics in recent years – one of the first such calls by a minister directly involved in the talks.

Juan Carlos Navarro told Climate Home in a recent interview on the sidelines of Climate Week in New York that the current system for approving decisions – which requires all countries to agree by consensus – has not delivered good enough results and should instead use a majority or super-majority decision-making process.

“By consensus, you cannot get 186 nations to agree on anything. It’s a miracle we have come so far,” said Navarro. “We need to change the rules so we have a basic, rational, majority or super-majority decision-making process where we can do things better and faster.”

The comments follow pressure from civil society and academics to reform the UN climate process. In June, more than 200 campaign groups issued a joint call to reform the decision-making process, which they argued can be blocked by oil and gas-producing countries and has reached a “breaking point”.

Andreas Sieber, policy director with climate advocacy group 350.org, said he was sympathetic to Panama’s proposal, but added “it would just be part of a puzzle” to make the UN climate talks work more efficiently.

He added that it could be hard to get over the line as earlier efforts to secure a rule on voting as a last resort had met with fierce opposition from oil-producing countries – and decisions reached by consensus have the weight of having all the countries behind them, he noted.

    Erika Lennon, Senior Attorney at the Center for International Environmental Law, celebrated that more people are talking about potential changes to the UNFCCC, as “being totally beholden to consensus-based decision making is not leading to the outcomes that we need”.

    She also agreed that voting is just part of the solution, and suggested possible reforms could include increased transparency in the negotiation rooms, inclusion of civil society and indigenous groups, and a conflict of interest rule that blocks fossil fuel companies from participating.

    During last year’s COP29 in Baku, a group of experts known as the Club of Rome – among them the former UN climate chief Christiana Figueres and former UN Secretary-General Ban Ki Moon – issued an open letter proposing ways to modernise the climate process.

    The current structure of COPs “simply cannot deliver the change at exponential speed and scale, which is essential to ensure a safe climate landing for humanity”, the letter said. They argued instead for “smaller, more frequent, solution-driven meetings” where countries can discuss progress and be held accountable.

    At that same COP in Azerbaijan, Saudi Arabia managed to block all mentions of fossil fuels in text summarising discussions on cutting greenhouse gas emissions. It was able to do this despite all countries having agreed to transition away from fossil fuels in energy systems just one year earlier at COP28.

    UN Climate Change consults on COP process

    In a speech at Climate Week in New York, Simon Stiell, the executive secretary of UN Climate Change, noted that recent COPs have delivered “concrete results and global steps forward”, adding that cooperation under the process has lowered expected global warming from 5C to closer to 3C.

    But, he conceded, it is “imperfect”. “As this new era of implementation gathers pace, we must also keep evolving, and striving towards faster, fully-inclusive, higher-quality decisions that tie the formal process ever-closer to real economies and real lives,” he said.

    Senior experts have been asked to examine how the UN climate process could be improved and will deliver their ideas to Stiell later this year. The secretariat will consult with countries on any potential reforms it wants to pursue in 2026, the UN’s climate chief added.

    Brazil, the host country of this year’s COP, has put the focus on global mobilisation to implement in practice what governments signed up to in the 2015 Paris Agreement. Last year it proposed setting up a UN Climate Change Council in order to support that work, but this proposal does not seem to have gained much traction amid geopolitical tensions and Trump’s attacks on multilateral climate action.

    The closing plenary of the Bonn Climate Conference. Photo: Lucia Vasquez / UNFCCC

    Downsizing COPs?

    Panama’s Navarro added that the UN climate summit has grown too big, making its scope “ridiculous”. In 2023, over 83,000 people attended COP28 in Dubai, while COP29 in Baku saw fewer, with 66,778 registered participants.

    Navarro said the COP meetings had become an anachronism. “You have thousands and thousands of people who are living off the story,” he said. “They’re living off these meetings, just sitting around the world on expense accounts, creating a bigger carbon footprint for the planet, and we’re not achieving anything.”

    In April 2024, UNFCCC head Stiell said personally he “would certainly like to see future COPs reduce in size”, telling an audience at London’s Chatham House think-tank that “bigger doesn’t necessarily mean better”.

    This year, COP30 will be held in the Amazon city of Belem, which poses “self-evident” financial and logistical limitations, according to Navarro, who praised Brazil for being open to hearing the complaints from the Global South countries on this topic.

    After many delegations complained over the high costs of accommodation and difficult access, Brazil offered cruise-ship rooms and price caps, and the UN has increased the daily subsidy for diplomats from most developing nations to attend the summit.

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    ‘Less hypocrisy, more concrete results’

    “Having said that, and coming back to the point of what COPs have become, I wish that COPs were less bullshit, more concrete results,” Navarro told Climate Home.

    His own country – which is judged to be carbon-negative, thanks to its extensive carbon-storing forests – recently published its “Nature Pledge”, combining climate, biodiversity and conservation pledges. Those include restoring 100,000 hectares of ecosystems such as degraded mangroves by 2035, maintaining 30% of Panama’s land and seas under protection and absorbing 5 million tons of CO₂.

    Practical measures to achieve that include new equipment for park rangers, more radars to monitor and catch illegal fishing, and fines for polluting industries.

    Panama has also set up a Nature Fund, which aims to collect $150 million-$200 million for conservation projects using resources like blue carbon bonds, debt-for-nature swaps and a national carbon market backed by blockchain with revenues going to the public sector to ensure “transparency and accountability”.

    Without specifying which, Navarro called out “countries that do an incredible job of greenwashing, talking about conservation and talking about the environment – and they’re either oil producers or plastics producers, or kill whales or are destroying our fisheries, or keep building coal power plants or keep polluting”.

    “We’ve run out of time for all of these hypocritical individuals, corporations – or even nations,” he added.

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    AI and satellite data help researchers map world’s transition minerals rush

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    Researchers are using satellite images and AI-powered modelling to map global mining activity, seeking to plug gaps in existing data as the rush for “transition minerals” fuels concerns about the industry’s impact on the environment and local communities.

    Countries are scrambling to shore up supplies of metals vital for the transition to renewables, such as lithium used in electric vehicle (EV) batteries, and copper – used in solar panels and wind turbines, many of which are produced in environmentally sensitive areas.

    “New mines will likely be in areas of high biodiversity, or where water and Indigenous rights are at stake,” project lead Victor Maus from the Vienna University of Economics and Business told Climate Home News.

    More than half of energy transition mineral resources are located on or near the lands of Indigenous peoples and subsistence farmers, according to a 2022 study published in the Nature journal.

    “Monitoring those impacts is critical,” said Maus, whose team members have identified massive gaps in current data when it comes to what, how and even where minerals are being extracted around the world.

      During a previous project, they compared global satellite imagery of 120,000 square kilometres of visible mine footprints with the S&P Capital IQ Pro database of mining production. The results were stark. More than half of the mining areas identified from space had no corresponding production data in the official record.

      To address these gaps, Maus and his team are building a mining database using satellite images. The project, which is part of the European Union-funded Mine the Gap initiative, will be a vital tool for policymakers and help foster transparency in the mining industry, he added.

      “We’re hoping to create not only a research tool but also a means of validating and complementing what companies report, supporting greater transparency across the sector.”

      Mapping environmental impact

      As well as counting mines and assessing overall production, the database will give a clearer picture about where the biggest environmental and social risks lie by tracking land use around mines, waste generation and signs of environmental degradation.

      “Simply knowing how much is being produced isn’t a direct measurement of impact,” said Tim Werner, a senior lecturer at The University of Melbourne who has worked with Maus on previous research into critical minerals.

      “We simply don’t have all the information we need to scientifically prove where impacts for one area are worse than others. This is a big problem for strategic environmental management at national and global scales,” he added, describing the data gaps as “mind-boggling”.

      A range of satellites are being used to collect the required information, including multispectral imagery, radar and hyperspectral sensors, collected from sources including the EU’s Sentinel constellation and German DLR satellites, chosen for their global coverage and accuracy.

      AI will then be used to scan these images, learning how to identify and track potential issues as the project develops.

      The challenges of collecting mining data

      There have been previous attempts to map the overlap between energy transition mineral mines and key biodiversity hotspots in different mineral-rich countries, as well as industry efforts to plug the gaps in data about global mining production.

      But past efforts to map global mining more accurately have struggled to document small-scale and artisanal mining operations, which are often unregulated despite their significant social and environmental impacts.

        In September, the International Council on Mining and Metals (ICMM) launched its global mining database – reportedly the most comprehensive mining resource to date, with information about more than 15,000 active facilities in 151 countries, but it does not include informal mining sites.

        “We had to draw some scope boundaries,” said Emma Gagen, the ICMM’s data and research director. “The industry is huge and that’s been the challenge this whole time – people haven’t tried to collect this data before because it’s so vast.”

        The case for clearer global standards

        Despite such data initiatives, which reflect growing pressure on the industry to clean up its act, researchers say structural and legislative changes will be needed to reduce the harms caused by mining.

        Gagen said more uniform regulatory standards would “drive performance improvements across the industry.”

        “What’s most needed is alignment,” Maus said. “Clearer global standards on what should be measured and reported, and policies that encourage disclosure of mining data.”

        For Maus and his team, having an accurate picture is a crucial first step.

        “If we don’t even know how many materials are being produced, we’ve got very little basis to even understand the scale of possible impacts in an area,” Werner said.


        Main image: Satellite image showing the expansion of nickel mining in Sulawesi, Indonesia (Photo: Sentinel-2 cloudless by EOX IT Services GmbH, which contains modified Copernicus Sentinel data 2024)

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