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Study: World Bank loaned billions to oil & gas despite green promises

Research shows that the World Bank — which is owned by 187 countries — spent an estimated $3.7 billion to finance fossil fuel projects in 2022.
A flare to burn methane from oil production is seen on a well pad.
Posted at 12:50 PM, Sep 12, 2023

A new report published Tuesday shows that the World Bank loaned billions of dollars to the fossil fuel industry last year despite its repeated promises to focus more on a low-carbon economy.

Research conducted by the German environmental and human rights nonprofit Urgewald shows that the bank spent an estimated $3.7 billion to finance oil and gas projects in 2022. The money was reportedly transferred through a special avenue of funding that's intended to facilitate global transactions and likely ended up going to oil and gas developments.

The financing comes in the wake of a pledge the World Bank made in 2017 to largely stop financing upstream oil and gas projects after 2019. Heike Mainhardt, the author of the study, said in order to align with the Paris Climate Agreement goals, the World Bank must end its friendly fossil fuel policies and stop financing those types of projects.

"There are no more excuses, no public assistance should be used to boost or prop up the development of fossil fuels," Mainhardt said. "Yet the World Bank is still using its public funding to drive billions and billions into fossil fuel investments, including coal."

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The research noted that the bank targeted energy tariff reforms in 29 countries, and it's believed many of these tariff increases ended up benefiting fossil fuel investments. Mainhardt claims World Bank policy reforms also included tax breaks and higher electricity tariffs in places like Colombia, Egypt, Pakistan, Romania, and Ukraine, which ultimately resulted in higher profits for the fossil fuel industry. 

"When the World Bank targets reforms to energy tariffs, this often involves increasing tariffs usually under the banner of reducing energy subsidies," she wrote. "However, these tariff increases typically increase the profit margins for new coal and/or gas power plants or new oil and gas field developments." 

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Another recent study published in the Future of Energy Policy shows that greenhouse gas emissions and atmospheric carbon dioxide levels continue to rise due to increased fossil fuel burning. And human-induced climate change could lead to the premature deaths of around 1 billion people over the next century, the study shows. 

"If you take the scientific consensus of the 1,000-ton rule seriously and run the numbers, anthropogenic global warming equates to a billion premature dead bodies over the next century. Obviously, we have to act. And we have to act fast," said one of the study writers, Joshua Pearce. 

The "1,000-ton rule" suggests that about one early death might occur for every 1,000 tons of fossil carbon burned.