Doubts over accuracy of World Bank climate finance may undermine trust ahead of crucial summit talks – Oxfam

In the report, Unaccountable Accounting, Oxfam audited the World Bank’s reported $17.2 billion climate finance 2020 financial year portfolio to discover it could be off by as much as $7 billion and may be allowing for dubious claims.

The World Bank is the largest multilateral provider of climate finance, accounting for 56 per cent of the total flow from all multilateral development banks combined. Other institutions look to the Bank to provide a precedent on matters of policy and practise.

The issue of climate finance remains a big sticking point at the UNFCCC climate talks. Developing countries need more confidence in donors’ promises about the amount and types of climate finance that is reaching them in order for the talks to be successful.

Rich countries promised by 2020 to be paying $100 billion a year in climate finance to help low-and-middle income countries cope with the effects of climate change and to pursue their own clean energy development. The issue will become important again at this year’s COP27 summit in Egypt in November.

Nafkote Dabi, Oxfam International climate change policy lead said:

“The World Bank’s public disclosure of its climate finance is like a faulty thermometer that’s currently reading 17.2 billion. We found that it could be off by 40 percent in either direction and we simply can’t be sure of the actual value. Our concern is the worst-case scenario – that the Bank could be significantly overstating its contribution.

“Climate finance is a lifeline to some of the world’s poorest people and countries. It is also a vital component of these global negotiations that depend upon a consensus agreement to keep the world safe. Without better disclosure, the World Bank is asking us all to take too much on faith. These funds are too important for that.

“It is alarming – at a time when climate change is driving such damage and poverty and hunger around the world – that we could find so little clarity about the quality and quantity of these financial flows. It is more worrying that developing countries are being sold this promise on trust rather than on public evidence.”

Oxfam looked at 2020 data and sought to recreate the Bank’s published climate finance numbers by applying the Bank’s methodology and using the information currently reported by it. Their findings revealed that the Bank’s claimed levels of climate finance cannot be independently verified and could be off by as much as 40 percent.

Dabi said: “Other financiers will follow the Bank’s lack of disclosure. Stakeholders like developing country governments do not have the right information to hold them and other rich donor governments to account. This introduces a significant deficit of confidence to the UN climate negotiations.

“This audit exposes the danger that some climate finance claims could simply be greenwashing, which would lead to a dangerous under-investment in poor countries’ mitigation and adaptation efforts.”

The report also notes that rich countries have already fallen $16.7 billion short of their $100 billion promise. To make matters worse, more than 70 per cent of what they did mobilize was in loans, placing even more strain on low-income country budgets when they have to pay it back.

Oxfam is calling on the Bank to disclose its climate finance assessments, including evidence that supports its calculations, in its reporting on all projects it claims have climate finance. The entire World Bank Group should begin public reporting in a standard and consistent manner, including with a trackable database.

Ends

For more information, please contact: Oxfam Media Unit: +44 (0)7748 761999 / media.unit@oxfam.org.uk

NOTES TO EDITOR

Find the full report here