Monday, October 22, 2007

The Green World Bank v. George F. Will

Last week on U.S. television, George Will claimed poor countries didn’t care about climate change. Pooh-pooh on that, said the World Bank. When it comes to global warming, the rich countries can take care of themselves, said World Bank President Robert Zoellick.

On top of that, the World Bank will help poor countries achieve access to clean energy. In a communiqué from its annual meeting, members of the Bank’s development committee stated:

Bearing in mind the scale of the challenge of addressing the causes and impacts of climate change, we called on Bank management to develop a strategic framework for Bank Group engagement, including support for developing countries’ efforts to adapt to climate change and to achieve low-carbon growth while reducing poverty.


We recognized the critical importance of energy access for growth. We asked the Bank Group to increase its support for access to modern, cost-effective, clean energy, especially among the poorest and in Sub-Saharan Africa. We also called for expanded work on energy efficiency and renewable energy, and facilitation of the development and dissemination of related knowledge and technology.

According to this story, there’s at least one "rich" country who doesn’t appear too happy at the Bank’s green leanings.

Saudi Arabia's finance minister, Ibrahim al-Assaf, told the committee that his committee had reservations about any use of the bank's International Development Assistance funds for climate-change efforts.

He also urged the bank not to take steps that would pre-empt U.N. negotiations aimed toward setting up an agreement to replace the Kyoto Protocol when it expires in 2010, Reuters reported.

Don't feel too bad for Mr. Will. It’s not the first time George Will locked horns with the World Bank.

It is difficult to demonstrate that World Bank loans have produced growth, let alone as much growth as private capital would have produced. Furthermore, when the bank provides debt relief, it creates what economists call moral hazard, an incentive for perverse behavior -- particularly, improvident borrowing. The bank's transactions with nongovernmental organizations are, strictly speaking, irresponsible: To what, or whom, are NGOs, or for that matter the bank, truly accountable?

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