A New Dawn for Climate Finance as Climate Investment Funds Sunset?

Petra Kjell, Guest Blogger

Petra Kjell is the Programme Manager for Environment, Human Rights, and Social Impacts at the Bretton Woods Project.

This week, the Green Climate Fund (GCF) gathers in Barbados for the eighth meeting since its inception. Established in 2010 under the UN Framework Convention on Climate Change (UNFCCC) as the primary vehicle to deliver much needed climate finance, the GCF still has a number of issues to resolve until it becomes fully operational. Slow in motion, the fund received a much needed boost with some pledges during the September climate summit organised by UN Secretary-General Ban Ki-Moon.

As the new financial structure for climate action rises, another funding mechanism is due to sunset. The World Bank-hosted Climate Investments Funds (CIFs) were set up in 2008 in the shadow of the ongoing UNFCCC process as an interim measure to provide new and additional climate finance to pilot “transformational” actions in selected developing countries. Led by developed countries and implemented by multilateral development banks (MDBs), four funds were set up: the Clean Technology Fund (CTF), the Pilot Program for Climate Resilience (PPCR), the Forest Investment Program (FIP) and the Scaling up Renewable Energy Program for Low Income Countries (SREP).

The CIFs were quickly criticised by civil society groups as undemocratic and unaccountable, potentially undermining the official UN process. The leading role of the World Bank, tarnished by its reputation on many fronts, including for its funding of fossil fuels, also created a widespread mistrust of the funds. A few years down the line, civil society has complained about lack of consultation, misguided projects, and a heavy private sector focus. In Indonesia, for example, civil society groups have repeatedly raised concerns about the CIFs, such as lack of consultation on the FIP country investment plan and the risk of deforestation linked to CTF geothermal projects, but with little impact. With CIF-funded projects ranging anything from energy efficient fans in India to airport development in the Caribbean, CIF donors have also repeatedly raised questions on the legitimacy of projects for CIF funding , but few projects have gone back to the drawing board, let alone been stopped.

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Rigged Rules: A Rogue Corporation in the World Bank’s Rogue Tribunal

Robin Broad and John Cavanagh

On September 15, in a tribunal that few know exists, the fate of millions of people and hundreds of millions of dollars will be debated and decided in the next six months.

The tribunal is the World Bank Group’s International Centre for Settlement of Investment Disputes (ICSID). It sits in downtown Washington, D.C., behind security guards at the World Bank. At issue is the future of El Salvador, some 2,000 miles away, where a global mining company—Pacific Rim, now owned by Australian/Canadian corporation OceanaGold—wants to mine gold in ways that could well poison the river system serving over half the Salvadoran population.

The crime alleged by the mining company is that the government of El Salvador has not approved a mining license for it. But the real crime is that a foreign corporation is trying to stifle democracy in a country where a small landed oligarchy and U.S. intervention stifled it for so long.

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Rigged Rules: A Rogue Corporation in the World Bank's Rogue Tribunal

Robin Broad and John Cavanagh

On September 15, in a tribunal that few know exists, the fate of millions of people and hundreds of millions of dollars will be debated and decided in the next six months.

The tribunal is the World Bank Group’s International Centre for Settlement of Investment Disputes (ICSID). It sits in downtown Washington, D.C., behind security guards at the World Bank. At issue is the future of El Salvador, some 2,000 miles away, where a global mining company—Pacific Rim, now owned by Australian/Canadian corporation OceanaGold—wants to mine gold in ways that could well poison the river system serving over half the Salvadoran population.

The crime alleged by the mining company is that the government of El Salvador has not approved a mining license for it. But the real crime is that a foreign corporation is trying to stifle democracy in a country where a small landed oligarchy and U.S. intervention stifled it for so long.

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BRICS: Toward a Rio Consensus

Kevin Gallagher

Conveniently scheduled at the end of the World Cup, leaders of the BRICS countries travel to Brazil in mid-July for a meeting that presents them with a truly historic opportunity. While in Brazil, the BRICS hope to establish a new development bank and reserve currency pool arrangement.

This action could strike a true trifecta — recharge global economic governance and the prospects for development as well as pressure the World Bank and the International Monetary Fund (IMF) — to get back on the right track.

The two Bretton Woods institutions, both headquartered in Washington, with good reason originally put financial stability, employment and development as their core missions.

That focus, however, became derailed in the last quarter of the 20th century. During the 1980s and 1990s, the World Bank and the IMF pushed the “Washington Consensus,” which offered countries financing but conditioned it on a doctrine of deregulation.
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Malawi’s Paradox: Filled With Both Corn and Hunger

Timothy A. Wise

Cross-posted from Global Post.

LILONGWE, Malawi — Visit this small, landlocked country in late January and you will have a hard time believing its people often go hungry.

It is mid-rainy season, and in and around the capital city the landscape is lush and green.

Look more closely and you’ll notice that nearly every inch of unpaved space seems planted with maize (corn); the green stalks rise up to five feet above moist, rich soil. Outside of the city, along the road leading south toward the former colonial capital of Zomba, the hills roll with maize, not in vast tracts reminiscent of Iowa but in small, neatly bordered plots.

It certainly doesn’t seem like a land that cannot feed itself. But until recently, that is what Malawi has been.

Droughts often threaten the country’s one rainy season, and with per capita incomes at around $900 per year, hunger, and even starvation, stalk the countryside. The World Food Program has permanent offices here, and for good reason.

Even this season, when the rains have come strong but late, more than 10 percent of the country’s 16 million people face severe food insecurity. According to news reports, some have starved.

It is paradoxical only to outsiders that this greenest of seasons is also the hungriest. By planting time late in the year, many peasant farmers have consumed the last of their saved grain, even following a decent harvest like they had last year. Until the new crop comes in late March or April they have to rely on meager cash income to feed themselves and their families.

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Malawi's Paradox: Filled With Both Corn and Hunger

Timothy A. Wise

Cross-posted from Global Post.

LILONGWE, Malawi — Visit this small, landlocked country in late January and you will have a hard time believing its people often go hungry.

It is mid-rainy season, and in and around the capital city the landscape is lush and green.

Look more closely and you’ll notice that nearly every inch of unpaved space seems planted with maize (corn); the green stalks rise up to five feet above moist, rich soil. Outside of the city, along the road leading south toward the former colonial capital of Zomba, the hills roll with maize, not in vast tracts reminiscent of Iowa but in small, neatly bordered plots.

It certainly doesn’t seem like a land that cannot feed itself. But until recently, that is what Malawi has been.

Droughts often threaten the country’s one rainy season, and with per capita incomes at around $900 per year, hunger, and even starvation, stalk the countryside. The World Food Program has permanent offices here, and for good reason.

Even this season, when the rains have come strong but late, more than 10 percent of the country’s 16 million people face severe food insecurity. According to news reports, some have starved.

It is paradoxical only to outsiders that this greenest of seasons is also the hungriest. By planting time late in the year, many peasant farmers have consumed the last of their saved grain, even following a decent harvest like they had last year. Until the new crop comes in late March or April they have to rely on meager cash income to feed themselves and their families.

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Foreclosing the Future: The World Bank and the Politics of Environmental Destruction

By Bruce Rich, Guest Blogger

In 2011 UN Secretary General Ban Ki-Moon shocked an audience of bankers and corporate executives in Davos Switzerland when he declared that the current economic system was “a recipe for disaster” and “a global suicide pact.” Over the last two decades the world’s institutions have largely failed to deal with the ecological crises of climate change, destruction of species, and pollution of fresh water and oceans. These failures have been accompanied by growing economic inequality in many nations.

The vast majority of the world’s economic growth, as well as ecological destruction, is now occurring in developing countries, and it is largely in these countries where the environmental and economic future of the world will be decided. No institution has played a more influential role in this arena than the World Bank Group.

The World Bank Group proudly proclaims “our dream is a world without poverty.” It claims to be a leader in promoting environmental standards for development, as well as in finance for environmental purposes, such as mitigating climate change. In reality it is a microcosm of the failures of its 188 member countries to address the challenges of economic development.

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The Perils of Technocracy and the Future of European Integration

Daniela Schwarzer

The current crisis in the euro area, the reforms governments have to implement, and the high unemployment levels in many member states are weakening the legitimacy of European integration. In my last post, I described how this output legitimacy crisis unfolds.

The debate about legitimacy and democratization in the EU traditionally focuses on the input side. As crises have surfaced, the flaws in the governance structures have also fuelled this old debate. In fact, it can hardly be argued that citizens have the chance to effectively influence the developments that deeply affect them, given the national fragmentation of decision-making and the resulting hazardous nature of macro-economic developments.

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China’s exploding debt

C.P. Chandrasekhar

If the international media are to be believed the world, still struggling with recession, is faced with a potential new threat emanating from China. Underlying that threat is a rapid rise in credit provided by a “shadow banking” sector to developers in an increasingly fragile property market. Efforts to address the property bubble or reduce fragility in the financial system can slow China’s growth substantially, aggravating global difficulties.

The difficulty here is that the evidence is patchy and not always reliable. According to one estimate, since the post-crisis stimulus of 2008, total public and private debt in China has risen to more than 200 per cent of GDP. Figures collated by the World Bank show that credit to the private sector rose from 104 per cent of GDP in 2008 to 130 per cent in 2010, before declining marginally in 2011. The evidence suggests that 2012 has seen a further sharp increase.

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Putting a Spotlight on the Arbitration Industry

Nick Buxton and Cecilia Olivet, Guest Bloggers

“There is little use in going to law with the devil while the court is held in hell.” These words from an unlikely source – Humphrey O’Sullivan, a 19th Century Irish schoolmaster  – became a widely used argument by multinational companies in the last decade as they justified the construction of an international arbitration system to decide state-investor disputes.

Agreeing with the questionable premise that national courts could not be expected to make unbiased decisions regarding investments by foreign parties, and believing that it was the only way to attract investment, governments worldwide signed 3000 international investment treaties over the last few decades. These treaties all relied on international tribunals such as the World Bank-hosted International Center for Settlement of Investment Disputes. With these treaties came a boom in cases and the emergence of a powerful new industry of arbitration lawyers that earn up to $1000 dollars an hour.

A new report by Transnational Institute (TNI) and Corporate European Observatory (CEO), Profiting from Injustice: How law firms, arbitrators and financiers are fuelling an investment arbitration boom, has decided to turn the spotlight on this hitherto secretive industry.

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