Hivos and other organisations urge World Bank to stop fossil fuels energy subsidies

April 4, 2013

The new President of the World Bank, Dr. Jim Yong Kim, has spoken repeatedly in the last five months about the severe consequences of climate change for people in developing countries. Hivos and other civil society groups have welcomed this position. However, it is now the time for Dr. Kim to lead the World Bank Group in following those words with action. That is the message that nearly 60 development, environment, faith-based, human rights, and community groups conveyed in a letter to Dr. Kim (see right sidebar).

The World Bank should address climate change in its own lending practices, and core energy portfolio. According to data compiled by Oil Change International, the World Bank Group has invested in over $18 billion in oil, coal, and gas lending over the past five years.

These subsidies overwhelmingly fail to provide energy access to the world’s poor. Continued investments in these large, centralised fossil fuel power and extraction projects have also brought a myriad of health, development and environmental problems.

In stark contrast, it is now clear that decentralised, off-grid installations are dramatically cheaper and are more efficient and cost-effective at providing energy access to the poor. Prioritising interventions that catalyze off-grid renewable energy deployment will therefore significantly aid in the achievement of development goals targeted at the world’s poorest.

The civil society organisations conclude that it is time for the World Bank to end support for all fossil fuel projects unless it can be clearly demonstrated that (1) the project’s sole purpose is directly increasing energy access for the poor, and (2) a full examination of all costs of the proposed project (including damage to public health, welfare, the environment, and the climate) and any new renewable and efficiency alternatives demonstrates that the fossil fuel option is still the best alternative for delivering energy services to the poor. 

In this light, Hivos is working hard on the second phase of our 100% renewable energy project on the Indonesian island of Sumba.