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Climate Change: the World Bank, Global Environment Facility and the United Nations - Partners or Competitors in Global Environmental Governance?
From: Global Warming in Climate Change, ed. Julian Morris, pub. 1997 by I.E.A., tel. 0171 799 2137.
The efforts made by the World Bank (the Bank) and its off-spring, the Global Environment Facility (GEF) to become leading international facilitators of global environmental 'governance' and ‘sustainable development’ are described and analysed politically. Do the roles of the Bank and GEF in implementing, inter alia, the Framework Convention on Climate Change (FCCC) in developing countries, as well as 'reforming' the United Nations, encourage global partnership ? Or do they help to intensify competition between North and South, between the Bretton Woods institutions and the United Nation? Evidence has been gathered which suggests that an experiment in ‘eco-development’ is under way through which the UN is to become more fully subject to the rules and values propounded by the bureaucracies of the OECD group of countries. An international green policy-advisory elite or epistemic community, closely tied to a small number of elite academic institutions, is postulated as the active agent behind this experiment and associated institutional and procedural changes. The educational, national and professional background of this elite is tentatively described. It is argued that the employment of highly skilled civil servants and professional experts (scientists, lawyers, engineers, environmental managers and economists) selected or approved by this community and employed ‘as available’, allows the Bank to adopt a persuasive rhetoric in support of technological and political ‘modernisation’ in the South. This mission is legitimated with reference to the threat of future global warming which, while derived from an intergovernmental ‘natural science consensus’ and sweetened with the promise of ‘win-win-win’ strategies, has been translated into small income streams. These streams move from taxpayers to administrative, legal, commercial, political and research networks organised at the global level and seeking ‘participation’ in global governance. How is this achieved and what are the implications for international relations and geo-politics? Can the World Bank/GEF/UN be expected to cooperate and ‘do better’ for climate protection given the nature of the issue and prevailing political constraints?
1. Introduction: The Bank and Climate Change
The technicalities of the legal regime that is being negotiated to implement the Climate Convention in the Kyoto follow up to the 1997 Conference of the Parties (CoP) are not dealt with here, but rather the political implications of actual and potential intergovernmental interventions, in the form of subsidies, concessional aid and policy pressure, in world energy markets. It is asked who will be in charge of, and who will benefit from, these interventions - in particular from the administration of the Convention’s main tasks in relation to energy: the implementation of emission reductions, including emission trading in all its ‘flexible’ complexity, data collection and reporting, monitoring , the building of institutional capacities and the ‘transferring’ of technology to Group 77 countries. The provision of aid for approved development projects and activities , as well as potentially the buying and selling of emission rights, require large intellectual and administrative capabilities. It is here that opportunities for the World Bank (the Bank) arise.
World Bank funds to reduce the emission of greenhouse gases from specific energy projects has been available at least since 1990. By 1996 over 100 climate change related projects had been completed and were marketed with reference to ‘sustainable development’, and the delivery of ‘global environmental benefit’, ideas leading back the Brundtland and Brandt Reports. These labels are the conceptual wrapping of a package which can be seen as a global experiment in ‘eco-development’ in which the environmental imperative, and the vast amounts of knowledge required to respond to it, are to lever, guide and facilitate international investments in green technology in developing countries (World Bank 1997 and 1998 ). The Bank’s involvement advising on the implementation of the FCCC will be described and it is suggested that it may be seeking more direct involvement in at least some of these mechanisms, and in ‘sustainable development’ generally.
Being effectively controlled by the G7 group of countries (USA, Japan, Germany, UK, France, Italy and Canada) and co-ordinating its policies with the International Monetary Fund (IMF), the Bank is also searching for new roles as attacks on them from left and right critics are increasing, and private financial flows to the South are outstripping public ones. In recent years the Bank’s income has fallen, while demand and risk taking have increased (Chote 1998:24). Its bureaucracy, drawn form national administrations and academe, is being decentralised and defines itself increasingly as a development agency engaged in countering growing disparities in wealth and welfare, as a source of information and knowledge and hence as an agent of facilitation rather than mere finance. Governments, on the other hand, tend to use the Bank for interventions in the macro-economic and other policies justifiable primarily on political grounds. After a rapid rise, funding for the environment is said to be declining. Profound political tensions and incentives to disguise policy are therefore part of the Bank’s nature. Its policies are often ‘greenwashed’ for political reasons. However, because of current financial crises in Asia and Russia, the sustainable development mission may well be threatened by lack of resources, though this unlikely to be reflected in the official rhetoric.
Various UN agencies have also been attracted to climate change policy as a source of new responsibilities. Under the Kyoto Protocol four mechanisms for greenhouse gas emission reductions have been agreed which will need administrative homes. Degrees of governmental and intergovernmental involvement and control also remain to be negotiated with industry. Taxpayers and consumers will have to pay for large transaction costs without any actual impacts on climate being known or probably knowable. In the mean time, bureaucracies and experts will acquire jobs, resources and new powers; industrial interests and political forces will gain aid or subsidies. A step towards world government may be taken. If so, who would be the ‘decision-makers’ and who advise them ? International policy or strategy will be available in very general terms from CoPs and treaties, but actual decisions are made elsewhere.
To engage in significant degrees of intervention in energy markets requires a geo-political context in which there is a single set of rules and ideology to define the ‘regime’ or political-normative framework; yet two of these are available: the UN and the Bretton Woods institutions, with the latter not only better funded and increasingly attractive to research and intellectual elites, but also prevailing in cases of legal conflict. UN agencies appear to be brought under the growing influence of the Bank, for example by the Bank expanding its development brief and the UN adopting the Bank’s managerialism and private sector procedures. The Bank’s rhetoric abounds with terms like ‘efficiency’,’ being business-like’, ‘adopting good practice’, ‘stakeholder participation’ and engaging in ‘partnership with clients’ who must ‘own’ the aided projects. Once this language (and required calculations) have been complied with satisfactorily by applicants, money can be disbursed, though power relationships need not alter. This managerialism demanded for the sake of ‘efficiency’ and inter-country equity. But in the end, the Bank is not a free agent. It must negotiate with and between governments for replenishment and remain its high credit worthiness. Its policy is remains dominated by the US and thus subject to US domestic politics; and decisions are strongly influenced by British and American civil servants. If governments withdraw their financial support, the power of its bureaucracy and advisors will decline unless private clieants can be atrracted. Current debates about the becoming a ‘knowledge bank’ that may facilitate development rather than fund it, may be a response.
After an outline of context and conceptual assumptions (2) upon which my analysis is based, the international institutional politics associated with climate ‘mitigation’ efforts are described, in particular the links between global warming science the FCCC and the Bank (3), including a description of how the Bank ‘greened’ what efforts is has made alone, (4) and and in association with its UN approved off-spring, the Global Environment Facility , the GEF (5) , to practice ‘sustainable development’ with reference to climate protection. Ten interactive layers of politics are identified as affecting and potentially derailing GEF (and future FCCC) practice. It is argued that practical achievements have nevertheless been made, due to the considerable power invested in a small group of intergovernmental administrators and the help they received from a ‘light green’ epistemic community. This green global elite is analysed and partially identified (5). Some speclations about the implicatiosn for international relations (6) and tentative conclusions (7), follow.
By 1998, all global environmental institutions are assumed to desire roles in the post-Kyoto world of global environmental management. The ‘greening’ of the Bank goes back much further and will be described in some detail. Greening was achieved by a small group of people active inside and outside the Bank who was able to get intellectual and financial support for ‘rational’ climate protection policies, and enabled by the ‘discovery’ that global warming need not be a politically ‘malign’ problem (Underdal 1998). Rather, it could serve as justification for a range of policies attractive to politicians, bureaucracies and commercial interests. Since 76 per cent of the world’s energy services are derived from fossil fuel, and two billion people still have no access to commercial energy (WEC 1997), gaining access to markets for energy technologies while limiting the use of cheap fossil fuels - particularly of available and substitutable coal - promised opportunities not only for gas and nuclear power, could be transformed into a moral target for ‘sustainability’.
Both the Bank and the GEF have funded groups and projects that are seen as examples of how to change ‘business-as -usual’ in the energy world. This meant the ability of a specific project with GEF aid to reduce carbon dioxide emissions more at less cost than an alternative ‘baseline’, though such ‘green’ aid usually comes tied to other conditions, such as support for privatisation, trade liberalisation, technology transfer and economic deregulation. ‘Business-as-usual’, that is more carbon intensive modernisation, is defined as environmentally degrading and the extra costs of cleaner technologies may be funded. The political questions here are: who defines what is degrading and who decides what is clean enough to be funded cost effectively? Do these same decision-making groups benefit in the short term from their decisions, and have they therefore become stakeholders in the implementation process? By analysing how the World Bank and GEF select, advise and perhaps fund emission reduction in projects and activities, I hope to contribute to the understanding of international environmental politics, ‘globalisation’ and the emergence of environmental global governance. The evidence for my assumptions and interpretations is derived from five pieces of empirical analysis:
2. Context and Assumptions
The context is the geo-political environment in which governmental bodies seek representation and negotiation fora for the implementation of the FCCC. The two assumptions underlying my analysis are that the politics of climate change policy are primarily driven by non-environmental, that is societal, motives; and that a ‘green epistemic community’ in which knowledge-based industries and lobbies, that is research institutes for energy technologies, information technology and environmental lobbies, are strongly represented, has been successfully co-opted by these political drivers to provide scientific legitimisation ‘scientific’ for bureaucratic interventions.
i.. The geo-political context: Forum-shopping for development favours the Bank
The efforts of the Bank to green international finance, especially energy investments in industrialising countries like India, are described below. They are interpreted as a part of the wider US/Group of 7 policy of ‘democracy promotion’, or rather support for polyarchy, that is ‘political moderation which protects propertied minorities’ on whose co-operation all externally aided or financed development efforts - sustainable or otherwise- depend (Cammack, in Robinson 1998:161). Part of this promotion is the use of the threat of global warming to persuade tax payers and investors to spend money on scientific research and ecological modernisation (or industrial transformation) projects. The underlying philosophy is that ‘we can use less , and have more’ (GEF 1998:53). ‘We’ remains undefined
After a decade of negotiations about ‘global warming’, governments need organisations to administer the implementation of emission reduction plans. The global warming agenda has thus opened up opportunities for ‘forum shopping’- under whose auspices to meet and whose bureaucracy to trust more for delivering service. In order to be selected the institution offering itself must be seen by the ministries concerned as politically friendly or at least neutral, as competent administrator and credible provider of expertise. It should be able to deliver universal legitimacy and ideally, secure financial help as well. The Bank has become the institution most likely to satisfy these criteria because the OECD group of governments, with the US as leader, has made it impossible for the UN to provide efficient service (Childers 1994), and the signs that ‘the environment’ is fighting successfully for a come-back inside the ‘old’ UN are limited, and UN bodies engaged in development and environment activities remain visibly underresourced. Instead of properly funding UN agencies, the OECD countries appear to be demanding ‘reform’ through the denial of resources.
The choice of fora has therefore declined as political and financial clout have become concentrated outside the UN system defined as excluding the Bretton Woods bodies. The latter now excel in their ability to attract the best ‘experts’ so that ‘global’ decisions may be based on ‘sound science’, ‘cost-efficiency’, etc. and the promise to be able to deliver fair as well as sustainable policies. Over 2000 PhDs, about half of whom are economists, are currently providing the Bank’s knowledge base (Interviews, Washington 1997). Promises are enshrined in the mantra of global management and governance informed by neo-liberal economics, engineering and earth-based natural science, the types of knowledge which dominate in the training of the green elite (see Table). Underlying these promises an apolitical and instrumental rationality has been identified (O’Neill 1993). Those seeking help are naturally required to agree with this intellectual framework.
ii. Non-environmental motives promote emission cuts
Green aid and ‘vigorous lending’ are surely part of a process by which global capital can exerts political and economic influence. Environmental aid has been the only aid stream to increase since 1990, while private money flows and borrowing by the Bank have surged ahead without ‘sustainable’ direction. Cammack (1998) argues that political aid today springs from a mentality that differs but little from that which once supported the Cold War when groups were funded abroad to ’establish bulwarks against Communist groups’. Green aid is here seen as a part of political aid, that is a part of an effort through which governments as lenders are directly funding, or providing incentives to the private sector (‘leveraging’), to gain ‘global environmental benefit’. The meaning of this term and its translation into technologies, activities and partners that deserve concessions is therefore highly important for the identification of synergy with non-environmental motives.
By the mid-1990s numerous non-environmental commercial motives and interests, especially those of fuel suppliers, power generation equipment industry and the carbon sequestration R&D community- ranging from forestry to those designing various ways of removing carbon dioxide (CO2) from power station emissions, had attached themselves to the ‘combating of climate change’ agenda. Policies vying for implementation ranged from the setting of international carbon taxes to national to differentiated national emission reduction targets; from providing ‘incentives’ for the emission trading between rich and poor, to the ‘transfer’ of technologies, many of which had attracted R&D support during the 1970s in response to high oil prices and ‘limits to growth’ concerns. Falling energy prices and a fossil energy glut left these ‘alternative’ sources very much in need of intervention on their behalf (Boehmer-Christiansen 1997). Rapid growth in energy demand is expected in the developing world. ‘Green’ technologies and fuels are seeking markets in the near future, and considerable growth has already taken places as finance is flowing to privatised and liberalised energy sectors. In late 1997, the World Energy Council expected 50 per cent of global energy demand growth to 2020 to take place in China and India (Churchill 1998: 6). The ‘Asian crisis’ had thrown some doubt on this expectation, demonstrating that while there is ‘no shortage in the supply of demand’, there may be less demand for new energy technology than expected (Peter March 1988). Industry has reasons to seek government assistance.
iii. The role of an epistemic community: the global green elite
While the Bank and UN agencies are not the only ‘actors’ at the global level, most multi-lateral public policy changes and aid are channelled through them. Given the relative weakness of their bureaucracies vis-à-vis their formal masters as ‘sovereign states’, allies are sought. The UN has sought help through UN associations throughout the world, and even the Bank has began to deliberately seek support from ‘civil society’. In 1997 its representatives were sent to world capitals to communicate with elites outside government ‘wholesale rather than retail’, ‘to connect people in academe, NGOs, media and business with the Bank’ (Interview, London, September 1997). NGOs of various types - campaigning, business and research oriented - are the major source of potential support and an ‘independent’ supply of services to bureaucracies. Indeed, some of their members may become coopted into ‘policy communities’ with national or international roots. The Bank in particular is open to pressure from within the USA where the environmentalist lobby has been effective through links with Congress and the administration (Wade 1997. The GEF in particular is assisted by a advisors from NGOs (see below). International bureaucracies that are well funded, which now excludes the UN, are able to maintain ‘private’ friends and through them spread a ‘reform’ process which, once tested, may be spread to other agencies, including the UN and national bodies. A well funded publication and information dissemination policy assists this process inside both the Bank and the GEF.
The greening of the Bank has been forced onto a reluctant institution by individuals who belong to a self-selected elite of environmental experts tending to invoke global ‘eco-catastrophe’ as incentive for action, inter alia, emissions reduction. A mutually supportive tacit alliance developed between the Bank/GEF/UN agencies and an informal network of environmentalists and environmental economists active primarily in research institutions, i.e. an ‘epistemic community’ dedicated to global environmental management through international law and global institutions (Haas 1990). This community is not truly ‘global’ but educated mainly in the North. It has developed since the late 1960s, but lost a comfortable home with the decline of the UN Environment Programme (UNEP) in recent years - a development which the UK has resisted thanks largely to efforts by its bureaucracy several senior members of which remained, after early retirement, active UNEP supporters inside and outside government (Webb 1998). Some members of the green elite have found a new abode in the Bretton Woods institutions where ‘the environment’ has been able to transform itself more effectively from a research or strategic planning project into an opportunity for gaining access to consultancies and markets for intellectual products.
An epistemic community is difficult to define and identify. The above opinion is based on two decades of personal observation, but a more systematic attempt is made here (see Table 1) to characterise the green elite through the eyes, and needs, of the World Bank. Interviews revealed that a sense of belonging to such a community is real. For example, members of the green network inside the Bank/GEF may express, in private only, strong criticisms of traditional Bank practices. One member of the GEF Secretariat, for example, described Bank colleagues as ’suffering from narrow economistic thinking, being prisoners of intellectual ideology that cannot escape their chains, struggling and making good faith efforts but being trapped’. A Bank employee working on the GEF, in contrast, described the GEF Secretariat ‘as having by no means achieved a sound administrative system’ and as ‘overly politicised and image conscious’ and basing ‘personal decisions on short term political reasons’(Questionnaire, Washington, October 1997).
The postulated global green elite links influential (and often very wealthy) individuals from groups like the ‘Club of Rome, World Wide Fund for Nature (WWF), International Union for Conservation of Nature and Natural Resources (IUCN), World Resources Institute, Brundtland Commission, organisers of the Stockholm and Rio Conferences, International Council of Scientific Union’s Committee on Problems of the Environment, and most recently the Commission of Sustainable Development. There are also many smaller but very effective groups working at the national level or in distinct professional areas, like the Washington based Environmental Defence Fund and the Foundation for International Environmental Law (FIELD) based in London but staffed mainly by North Americans. These groups tend to have close personal links with ‘fellow travellers’ inside those national environment ministries and research agencies that seek active international involvement in the climate issue.
Given the importance the epistemic community tends to place on a sound knowledge base, one may ask how successful the Bank/GEF been in attracting allies from the climate science research. The following is somewhat of a sideline to the overall argument, but hopes to show that the scientific weakness of the scientific case has led to the exclusion or large areas of science in the epistemic community, and a preference by the Bank for those professions and areas of knowledge which stand to benefit directly from the hypothesis that global warming, assumed to be induced significantly by human activity, is best fought not by adaptation, but by reducing reliance on fossil fuels and developing markets for ‘clean’ technologies.
3. Linkages between Global Warming Science, International Law and The Bank
i. An agreed science base ?
The basic science of climate change remains disputed, with politics trying to by-pass science with the help of the Intergovernmental Panel on Climate Change (IPCC) and its pronouncement on a ‘scientific consensus’. This consensus allegedly asserts that we now ‘know’ that humanity - through activities that emit carbon dioxide to the atmosphere - is indeed changing the ‘global’ climate, and that this requires mitigating action. The sciences on which this opinion is based excludes important branches of knowledge, and therefore ignores alternative hypotheses which relate to changes in the physical behaviour of the Earth in space and to extra-terrestrial influences: cosmic rays, sun spot activity and their impact on clouds (Calder 1997), as well as man-induced feed-backs likely to have cooling effects. The 1995 IPCC scientific consensus as interpreted by politics ignores not only the mentioned uncertainties, but also the fact that all influential climate models used to ‘predict’ future dangerous warming assume a doubling of carbon dioxide concentration in the atmosphere, which is ‘extremely unlikely’ even if all known fossil fuel reserves were burnt; that the fate of additional carbon dioxide over time is not well understood, that carbon dioxide encourages plant growth and may turn out to be a good thing in large areas, or that most of the new carbon dioxide released is dissolved in the ocean and will not therefore be absorbed by the atmosphere, though it remains unknown whether this will be fast enough to keep atmospheric concentration constant (Metzner 1998: 96).
Closer textual analysis of IPCC statements to policy-makers reveals much ambiguity (Boehmer-Christiansen 1997), a view which is supported by reports of the bitter arguments behind closed doors that produced the latest version of this consensus in 1995. (IPCC 1996) Various interpretations of the evidence are possible and action still requires justification by the ‘precautionary principle’ as interpreted by environmentalists. The view that mankind is responsibility for global warming and is able to ‘mitigate’ by interventions in energy markets, is therefore interpreted not as a scientific fact, but as a belief which is disseminated by the above epistemic community because of its plausibility and non-environmental benefits for research, industry and environmental politics.
The scientific understanding of cloud chemistry and effects on radiation balances and of the carbon cycle have improved but remain too poor to ‘predict’ future climates. Yet it is on those predictions that the IPCC researchers on impacts and response strategies had to base their work and hence recommendation to bureaucracies and industry have tended to respond. Earth scientists have learnt that past climates have varied considerably, ‘switching’ extremely suddenly long before humanity could have had any impact. Natural scientists did not protest much against this misuse of their work by policy-related research; or of hasty action taken in their name. They had either remained isolated from politics, culture and socio-economic implications of the work (Shackley 1998), were persuaded by self-interest and solidarity to serve funding governments (Boehmer-Christiansen 1995, 1997), or had themselves become ‘believers’ of environmentalist doctrines. While institutionalised research interests, such as research councils or national academies, will attempt to remain neutral, they are bound to seek support for themselves before serving any cause or political agenda (Proctor 1991). A fundamental issue for the any research claiming to provide policy guidance had arisen: should mitigation or adaptation research be funded? Funding both was unlikely as government everywhere were withdrawing from basic research, thus giving all research a dangerous incentive to claim policy relevance. Mitigation related research was already well established (as a response to the oil crises of the 1970s). adaptation research is far less clear and has no lobbies as yet.
Either research area would only be of interest to the aid business if there were practical responses which allowed moving taxpayers’ money into profitable ventures or mandatory activities. Reducing carbon emissions from human activities does not need scientific advice, but requires scientific legitimation if done through regulation. Here direct links to policy exist for the applied natural (impacts research, emission measurement and modelling) and engineering sciences (alternative technologies and emission sequestration). Hence the linkage between climate change and the Bank arises mainly from the world-wide ‘ecological modernisation’ potential of emission mitigation and trading, projects which mainstream environmentalism has come to support because of their political acceptability (Murphy 1997, Boehmer-Christiansen, 1995). Assisted by state intervention they broaden the competences and resources for bureaucracies, law-makers, and experts, and promise more wealth for investors: the triple win strategy of advanced ‘green capitalism’(Lovins et al 1997). Investors, bureaucracies and selected NGOs may assume that the shorter term benefits from ‘tackling’ climate change by mitigation will deliver non-environmental effects of current policies to themselves. These benefits are considered to be the active ‘drivers’ of institutional politics. This includes the groups expecting to benefit also seeking to fora to negotiate and administer any new regime (Boehmer-Christiansen 1994, 1997). This new regime is important because it will define what counts as ‘global’ damage or benefit and who will decide how the threat is to be ‘tackled’. It is assumed that this threat become negotiable only if politically credible solutions -virtual or real- are discovered. Their existence explains the interest of the Bank/GEF/UN in the climate negotiations. What were the responses of the Bank?
ii. The Climate Convention, the Kyoto Protocol and Multi-lateral Aid
That global warming threat has not so far become credible is indicated by the calculation that the Bank has since 1992 funded - quite legally- projects that will add emissions to the atmosphere equivalent to more than all current global fossil fuel emissions (Institute for Policy Studies 1997). Yet negotiations between environment ministries, urged on by environmental groups, went on until 1998 when in Kyoto, decisions were once again postponed.
Ministries are reporting that they are increasingly overwhelmed by the enormity of the implications of the Kyoto Protocol’
(Reported from Bonn 1998, IISD Linkages:4)
As mentioned, the Bank and UN system had already spent money on climate protection. As OECD countries had not allowed the FCCC to have its own financing mechanism - though realising that without this, many countries could and would not implement even its reporting requirements, this conventions (and others) came to be served by the GEF in advance of a binding agreements being reached. The Bank, as the GEF’s parent and host, as well as its dominant IA in the climate change ‘focal area’, had simplified the objective of climate protection to mean the cost-effective reduction of carbon dioxide emissions from developments projects which might otherwise have done without these. These cuts were defined as a global benefit, something the GEF ‘which does not seek to address national environmental issues’ (UK House of Lords 1998) was set up to fund. The difficulty of distinguishing between national and global environmental benefits, surely a splendid piece of sophistry, has remained a fundamental reason for continuing complaints about the GEF (see below). However, defined as such, a brand of resource economics could be applied through which environmental subsidies could be calculated and then granted as multilateral aid (with or without bi-lateral contributions). ‘Agreed’ incremental costs, as distinct from total costs, of energy projects could be calculated in dollars and presented as a monetary global environmental benefit. The environmental value of many projects throughout the world could be added, and many environmental economists and emission experts be kept employed.
As amended in the Kyoto Protocol to FCCC, Annex I - that is OECD countries and the former second world - are to reduce their net emissions of six greenhouse gases, converted to carbon dioxide equivalents, by differentiated amounts between 2008 and 2012. This technically still impossible task as far as conversion to equivalents is concerned, is to cut carbon dioxide emissions by a global average of 5.2 per cent of below 1990 levels, and must involve at least 55 governments, whose 1990 emissions amount to 55 per cent of the world total. This would have little effect on atmospheric concentration of these gases, but be considered by believers in the threat to be a step in the right direction. First of all, enormous efforts of measuring and calculating net emissions will employ thousands of experts. Many governments will need financial and technical assistance just for this. The whole Kyoto process may proceed on a voluntary basis as some dispute the legally binding nature of the 1997 Protocol (WEC 1998:5).
The Kyoto Protocol contained surprises: non-nuclear, coal exporting Australia is allowed an 8 per cent increase and Iceland even 10 per cent, the EU accepted an average reduction of 8 per cent, less than it had called for and amounting to a reduction between 15-20 per cent compared to the projected aggregated emission growth; and the USA eventually agreed to a cut of 7 per cent. The ‘outrage’ to environmentalists is the former USSR, which needs merely to stabilise its 1990 emissions, though current emissions are significantly lower allowing it to sell ‘hot air’. Given that the US increased its CO2 emissions between 1990 and 1996 by 8.3 per cent, the US signature might surprise in spite of the agreed ’ flexibility’, unless three points are remembered:
During subsequent negotiations in Bonn, June 1998, when the Convention’s Subsidiary Bodies for Science, Technology and Implementation (SBSTA and SBI) were meant to take the Protocol forward, the World Cup reportedly proved more attractive that negotiations to many delegates. Agreement could only be reached on minor matters: methodologies, co-operation with relevant international organisations, and education. In issues of emission reductions and transfers, stalemate reasserted itself and three proposals have gone forward for further negotiations in Argentina in late 1998: from the EU, China/ G-77 and the USA. The European Union wants to re-open the issue of ‘hot air’, China and friends will continue to refuse even to discuss new commitments from non-Annex I parties, something the other two groups demand. The US and its friends are refusing to reopen their arrangements with Russia and seek pure market solutions. The South seeks technology transfer or even leap-frogging, though in the Convention itself, technology transfer is defined neither operationally or theoretically. However, business and R&D interest are expecting new markets.
For the purpose of calculating their obligations, Parties included in Annex 1 (for whom land use changes and forestry constituted a net source of greenhouse gas emission in 1990), should include in their 1990 emission base year the aggregate anthropogenic carbon dioxide equivalent emissions minus removals in 1990 from land use change (Article 3, paragraph 7). All countries will require national systems for the estimation of anthropogenic emissions by sources and removal by sinks of all greenhouse gases, which would have to be in place no later than one year prior to the start of the first commitment period (Article 5, paragraph 1): hence the many requirement of the GEF to offer help with ‘capacity building’, ’enabling activities’, and the ‘innovative’ financing emission reduction technologies.
The range of potential intergovernmental and governmental interventions arising from the FCCC, not only in energy sectors, is potentially vast. Article 2 of the Protocol states that each party included in Annex 1, apart from achieving quantified emission limits ‘in order to promote sustainable development’, should do so by ‘enhancing energy efficiency, promoting forestry, innovating environmentally sound technologies’, as well as by ‘reducing or phasing out market imperfections, fiscal incentives, tax and duty exemptions, and subsidies in all greenhouse emitting sectors that run counter to the objective of the Convention and apply market instruments’(UN 1997). Subsidies to nuclear power and renewables, but not coal, may be approved. Market instruments as generally advocated by the USA are supported. Adverse effects on international trade are to be minimised and the Parties must be able by 2005 to demonstrate progress under the Protocol, though progress remains undefined. The FCCC would justify interventions in energy prices and markets, as well as the regulation of forestry and land-use once these are accepted as international obligations. The short-term beneficiary will be the new professions of environmental economics and emission modelling whose practitioners will have to justify ‘rational’ choices in the realm of ‘internalising’ environmental externalities. Since any emission reduction ‘which a Party acquired from another Party...shall be added to the assigned amount for that party’, and transfers will be subtracted. a new profession of emission accountants will spring up. Ensuring that such measurements are credible would become a major policy issue.
Vast amounts of information will have to be processed internationally before the administration of emission cuts may begin. The Bank took the strategic decision (‘several years ago’) not to become involved in the politically sensitive, largely small scale ‘enabling’ activities that are being funded by the GEF, but to concentrate instead on large energy projects which cannot be entrusted solely to national bureaucracies (Interviews 1998). Assisting the national bureaucracies tends to be left to UNDP or UNEP, with the Bank seeking policy synergy between environment and economic development through large projects, for example by combining climate change goals with energy efficiency or sustainable forestry. It is here that, with the IMF, it also tends to assert its broader conditionalities, such as privatisation, deregulation and financial reforms. When the alleged encroachment by the Bank on UNDP in sustainable development, poverty alleviation and technical assistance has been raised with its administrator he replied that the Bank was actually following UNDP’s good example and was working with UNDP (which has manages $6 billion a year in official development aid) in ‘global partnership’ with UNDP. But he did call for a World Environment Organisation where ‘the world’s environment ministers can deliberate’.
It is conclude that many of the transaction costs associated with the implementation of the FCCC and its Protocol initially promise competence, resources, jobs and research opportunities for intergovernmental institutions which will have to divide these opportunities between them. In the ensuing turf battles professional elites and their allies in ‘civil society’ will be sought as allies in what amount to a quest for the implementation a specific ‘green’ branch of development theory. Such an aspiration requires persuasive justification, something provided by the global environmental threats that have local causes but require global solutions. Global decision-making power for industrialising and pre-industrial economies is sought by experts applying the arts of neo-liberal and environmental economics, provided that funds are forthcoming from governments so that prescribed knowledge and technology may be ‘transferred’ and hopefully accepted by those who must, in the end, accept the risks and charges incurred.
Four Flexibility Mechanism set up: Bubbling, Trading, JI and CDM
In Kyoto, the environment ministers agreed to accept US proposals for the flexible implementation of emission reductions. Articles 4, 6, 17 and 12 of the protocol deal respectively with bubbling (allowing Europe and to share out its emission among member states, and perhaps Russia its hot air ), emission trading (between firms), joint implementation (JI) which so far is only possible between firms in Annex 1 countries, and a Clean Development Mechanism (CDM). The first three mechanisms were accepted by Group 77 countries and China in principle in return for the CDM; they themselves have not accepted emission reduction obligations. Global emission trading, however, requires that a credit or allowance system is set up for all parties. Emissions can be traded across national emission inventories, that is calculated lists. Technology transfers, on the other hand, must be project based. For trading, no other environmental or social criteria need to bee involved and it can be left to the private sector, once governments have agreed on the allocation of credits or allowances, and some central broker has been found.
The CDM ‘shall be subject to the authority and guidance of the CoP’ of the FCCC’ and is to be ‘supervised by an executive board’ and is to ‘assist parties not included in Annex 1 in achieving sustainable development......and assist Parties included in Annex 1 in achieving compliance with their quantified emission limitation and reduction....’(FCCC 1997). It is new because it would allow Northern private firms to earn emission reduction units as credits for the North by investing in developing countries that have ratified the treaty. Firms could also buy less efficient electricity companies there (i.e. privatised ones), invest in cleaner technology and then earn profits for themselves, as well as certified emission reductions, measured in tonnes of carbon equivalent, for Annex 1 countries. However, much vagueness remain, though it is the only mechanism that provides for an objective assessment of whether emission transfer was likely to lead de facto to reduced emissions, since the transfers would be project as distinct from inventory-based (Werksman: 1998). It will not start functioning between North and South at least until 2000, which leaves time for its many problems to be resolved. First it has to find an institutional base: will it the CoP, the Bank or the GEF ?. As a part of the Bank, the CDM would be seen as an instrument of donor countries; as part of the CoP, treasuries, trade and foreign ministries are likely to have reservations. As part of the GEF, the CDM would remain more subject to the Bank and less to the influence of the CoP and UN norms, but UNEP and environment ministries might have less influence than inside the FCCC. In theory, the GEF emerges as a compromise between North and South, treasuries and environment ministries.
Technology transfer can already build on Bank/GEF experience in designing emission baselines and calculating reductions derived when ‘dirty’ local coal or technology is replaced with imports, or new energy systems are set up, for example in rural areas. Involving the private sector in its projects remains a major objective of both the Bank and GEF. However, it is not clear whether the Bank wants to become the home for the CDM. Interviews suggest that many people in the Bank have strong reservations, fearing the volatile politics likely to be involved. However, the GEF appears ‘happy, willing and able to take on the CDM’, at least according to its CEO when he addressed the GEF’s First Participants’ Assembly, thus raising the question of the role of the Bank inside the GEF (El-Ashry, 1998). At Kyoto, El-Ashry, formerly of the Bank (see Table no 6) had already explained how the GEF could serve the Climate Convention’s CoP given ‘the markets in developing nations for power plants, cars, appliances and other products .....worth millions.’ He also spoke of ‘the high cost of inaction’ and promised to facilitate ‘large-scale transfer to developing countries of energy efficient and renewable energy technologies’, adding that the GEF also offered ‘a concerted outreach program to strengthen implementation of enabling activities’(El-Ashry 1997). The close, if competitive links between the GEF, the Bank and UN agencies remain to be described, but could become a source of strength as well as weakness. The decision-making rules, politics and degrees of accountability ‘at home’ of these bodies are by no means identical and are one reasons for the importance of intra-governmental politics - the domestic turf battles - in addition to inter-institutional and intergovernmental battles at work at the global level, battles which reduce effectiveness in policy-making and development. This raises the complex issue of Bank -GEF relationships, and the question of how far and why the Bank has ‘greened’ in the first place?
iii. A green World Bank: the new agenda
The ‘greening’ of the Bank is described from a political perspective. Environmental policy impacts have been studied by others and were summarised recently as follows:
...the (environmental) facts have often ended up as relatively unimportant details compared with symbols and postures and the struggle for power..... Rhetoric has flourished on all sides ..., for the stakes are high and supporters must be won..... That the Bank moved largely for tactical reasons has shaped the legitimacy and content of its environmentalism... (for which) many still believe .... there was no strong business case. Even by 1995 a majority of its operational staff .... still believed that there was no strong business case for many of the Bank’s (environmental) world-class standards and procedures....and some see them still as imposed by the Board and NGOs (Wade, 1997: 730-731).
An internal rule had committed the Bank since 1984 not to finance ‘projects that contravene any international environmental agreement to which the member country concerned is a party’ (Sand 1994:497). As this acted as incentive for potential recipient governments to not sign environmental treaties, GEF money would be made available only to governments who had ratified the relevant treaty. After 1986 the Bank rapidly increased the number of environmental specialists, from five to over three hundred a decade later and appointed a vice-president for ‘environmentally sustainable development’. Today, the Bank is to use economic leverage to make international environmental law effective.
The Bank’s ‘greening’ took place in 1986 after a period of strong criticism from US environmental lobbies made effective through the US Congress (Wade 1997). ‘Greening’, he found, was not an act of reflection or conversion, but the result of pressures from groups like Greenpeace, the Sierra Club, and Environmental Defence Fund - all well staffed by lawyers- who succeeded in imposing ‘green’ conditions on lending policy when the Bank sought new funds to protect the US banking system from the impacts of Latin American debt default. Fortunately for the environmental cause, this coincided with discussions inside the Bank about a number of funds which would be needed to gain the support of the ‘South’ for conservation and the 1992 Earth Summit. In several European governments too, particular France and Germany, negotiation for such aid came to be supported by ministries concerned with overseas development and environmental protection, both however subject to treasury constraints. France had some money to spare and set the ball rolling.
From 1991 onwards, therefore, the Bank was able to gain experience in managing environmental finance, starting with the responsibility for about 80 per cent of the total project funds allocated to the Multilateral Fund attached to the Montreal Protocol, dealing with ozone depletion and administered by UNEP. In 1992 an environmental economist working for the Bank and later for the GEF, currently deputy to its CEO, argued that the Bank,
...because of its experience with the GEF and the Interim Multilateral Fund under the Montreal Protocol is well placed to perform, or at least to advise, on any of the institutional functions required under the Climate Convention as it evolves’(King and Munasinghe 1992:2).
Seven likely functions were listed: compliance monitoring, project implementation and financing, project auditing, emission rights registration to support trade of permits, mobilisation and transfer of financial resources, arbitration, and research and its dissemination. At this stage, UNEP still expected to play a leading co-ordinating role in the climate change area, but this idea was successfully resisted by the USA, in part invited by UNEP itself by its early lack of interest in the ‘pilot phase’ GEF.
US based green lobbies have continued to exert considerable pressures on the Bank, for example through ‘demands’ that the Bank should refuse loans for energy other than renewables (Flavin 1997). Changes in the Bank’s development rhetoric, e.g. from ‘economic growth’ to ‘sustainable development’, from ‘guidance’ and secrecy to ‘participation’ and transparency, were largely in response to NGOs and the less visible pressures of members of the green epistemic community active inside the Bank. Some of these were rather successful in engaging with governmental and commercial interests for whom ‘the environment’ came to provide the justification or several reforms inside the Bank. Global warming proved to be one of the most effective tools for this tacit coalition active under the umbrella of the US based Climate Action Network. Bank projects came to require social and later environmental impact assessment and the newly greenwashed Bank needed allies against clients keen to suffer environmental damage in return for some aid that might promote their industrialisation. Climate change projects promised to satisfy all parties: donors, recipients and green lobbyists.
iv. The Global Carbon Initiative (GCI): the concept
In 1992 Bank authors King and Munasinghe published a paper on ‘Cost-Effective Means to Limit the Emission of Greenhouse Gases in Developing Countries’. Later, under its Global Carbon Initiative (GCI), the Bank conceptualised a carbon investment fund (CIF) not too dissimilar to the CDM through a research project funded by a small number of countries contributing to the Bank, in particular Norway, which has a great need to buy emission reductions from abroad. The CIF, it was envisaged, would obtain funds from industrialised countries and the private sector to invest in emission reduction for economies in transition and, potentially, developing countries. Through such a fund the Bank could expect additional influence over economic development in recipient countries by acting as lender, designer of projects and administrator of aspects of emission trading. Neither UNCTAD nor UNDP would be similarly trusted by business and lending governments, while UNEP weak and unpopular in many quarters, could be side lined as it lacked a clear mandate. The GCI/CIF were explained at the Kyoto conference. The academics charged with developing the programme had consulted extensively with all types of countries, as well as the private sector, to investigate the setting up of this voluntary market mechanism’ (World Bank Environment Department 1997). The preparations for an active Bank include:
The Backcasting Study is a simulation exercise based which predicts from economic theory what would have happened to the Bank’s project costs if carbon emissions had been integrated into energy lending by applying shadow values ranging from $5 to $40 per ton of carbon emitted. It serves to identify investment opportunities for emission mitigation and its findings are to be built into the analytic foundations of the Bank’s climate change strategy. ‘Mainstreaming’ the global environment into all its projects and ‘dialogues’ began in 1995 and largely produced investment advice and advice. This is to help countries adjust their policies so as to integrate global externalities into their national economic planning for climate change ‘overlays’ with energy, transport, industry and forestry. The Global Overlays programme is aimed at the reform of economy-wide and sectoral policies, meaning the inclusions of global externalities into national economic planning as well as the Bank’s ‘country dialogue’(WB Environment Department April 1997). Backcasting and overlays are part of the mentioned Global Carbon Initiative drawn up by 12 researchers funded by Nordic countries. These programmes, if implemented, surely overlap directly with the GEF’s function, which may explain its emphasis on its own ‘uniqueness’ and independence in funding ‘global’ benefits.
An undated set of papers in the folder ‘World Bank Global Overlays Program: Mainstreaming the Global Environment’ was given to delegates at the First Participants Assembly in New Delhi, April 1998. These tell that Climate Change Overlays are to: provide direct alignment of investment planning with international conventions, reinforce the rationale for capturing ’win-win-win’ opportunities through economic reforms, identify opportunities for Bank and GEF financing, and enhance relationships with line ministries and finance ministries..., ‘thereby drawing key players into dialogue on environmental management’. The underlying assumption is that the global commons is being degraded and that, similarly to a graphic overlay which attaches a new layer of analysis to existing GIS maps, biodiversity and climate change overlays add the global dimension to traditional economic and sector work.
The Bank’s conceptual approach applies doctrines from neo-liberal economic theory to the development cum climate problem, which is defined as emission reduction, but also requires state intervention to create the required rules and conditions for markets to work. The role of government has recently come to the fore, as when the Bank’s chief economist revealed the Bank’s learning in response to the ‘Asian crisis’. In what has been called the ‘Post-Washington Consensus’ ( Stiglitz 1998:1), the Bank’s has adjusted previous doctrines to argue that governments can do too little intervening in national economies. Rather, they should set up frameworks, including financial systems, that serve ‘markets’ and economic growth with the joint objectives of ‘sustainable development, egalitarian developments, and democratic development’. He specifically recommended a carbon investment fund:
‘that would allow countries and companies that needed to pursue emission reductions to invest in carbon-reducing projects in developing countries... (To these)... this plan would offer increased investment flows and pro-environmental technology transfers’ (Stiglitz 1998:29/30).
In this new belief system, the market is seen as underproviding technology and the goals of development are widened to include education and environmental protection, with the joint implementation of carbon reductions explicitly mentioned. A clearer statements of the desirability of comprehensive intervention, or even planning, by the state in the name of sustainable development made by a senior official of the Bank, seems hardly possible.
v. Shaping Policy
When Joseph Stiglitz (see Table no. 32) addressed the Fifth World Bank Conference on Environmentally Sustainable Development prior to Kyoto, he at first argued from principle against quantitative emission targets, that is tonnes or percentages of gases from specific sources to be cut, and in favour of cutting emissions through the price mechanism. He claimed that economists knew that ‘the downside risks sometimes associated with the use of the price mechanism’ had been exaggerated and that this mechanism would be best for reducing emissions because prices could more readily be adjusted to serve the needs of long-term policy . If prices increased through taxation, increased revenue should be used ‘to reduce other distortionary taxes’ - not perhaps a solution that appeals to bureaucracies and treasuries. He asserted further that the world faces ‘policy choices which could potentially have enormous distributional consequences’ and proposed various principles to indicate how climate change policy should be approached. He promised his audience of selected environmental leaders - the members of the ‘green elite’ analysed below - that the Bank stood ‘ready to act - in partnership with you and others’ to protect to global environment. The Bank’s GCI was put to the audience as:
Recognising that governments would be ‘facing a problem of sequential decision-making under uncertainty’, he also tried to turn the audience against the use of environmental standards. While international energy efficiency standards would be politically easy to monitor and enforce, this was not true, he argued, everywhere and would weaken economic efficiency. Economics and economists should be at the heart of global regulatory policy and their recommendation was for ‘internationally agreed-upon carbon taxes’ (ibid. :11) Reducing per capita carbon dioxide emissions ‘seems to be the target for which we should be aiming’. Internationally uniform taxes would be a relatively efficient way to curtail carbon emissions, lower overall abatement costs and weaken arguments over the international distribution of costs. However, the Chief Economist also recognised that an international carbon tax was not likely to be accepted by governments and proposed emission trading as the second best solution, that is de facto the Bank and the US government have advocated - ‘setting a price at which emission permits can be sold’ and the trading of such permits between private firms. Punitive charges on imports for those in breach of compliance were proposed by Stiglitz. This idea of emission trading has since been recommended to European governments, e.g. Germany, in recognition of their hostility to the idea, for example. (Stromthemen 1998:3)
In Kyoto the Bank’s disseminated the same message. One of its managing director’s when addressing the CoP, admitted that the setting of quantitative limits was essential for emission trading to begin, be this by allowances or by credits. Glossing over problems of measurement, equity and enforcement, he presented climate change as primarily a development issue. The prospect ‘of the sharing of benefits between industrialised countries and our clients’ was put to an audience officials from 160 governments (Koch-Weser 1997, see Table no.14), though the terms ‘government’ or ‘state’ being were avoided in favour of the more neutral ‘country’. The President of the IMF (see Table, no. 21) also spoke and defined sustainable development as ‘high quality growth’, while Vergas (no. 37), speaking as the President of the Third World Academy of Sciences and Brazilian Minister of Science and Technology, called for the ‘universalization of the current scientific and technological revolution’.
A press release from the First Assembly of GEF in New Delhi announced several months later that the Bank was increasing its efforts to help countries by mentioning 84 GEF projects in 75 countries involving US $800 of GEF resources, and another $800 millions in loans and highly concessional grants from its own funds to ‘enhance national development and reduce poverty’ (WB 1998). It was also ‘stepping up its efforts to mainstream global environmental concerns into its clients’ service. The projects mentioned were:
These developments were promoted by the professional expertise inside the Bank through its Indicator and Environmental Valuation Unit, though, to the regret of environmentalists, there are no plans ‘to regularly publish any green national accounts let alone to make these the basis for planning its country advice and lending work,’(from NGO email 15 June 1998 in preparation of a conference to challenge the Bank’s 1998 development report). For the Bank, however, by 1997 climate change and the environment in general had become a set of investment and aid opportunities clients needed to know about. It was now ‘delivering $250-275 million per year to the GEF’ to be spent on combating climate change, and thinking about setting aside special blocks of finance for climate, where, despite of a ‘tremendous explosion in interest, capital markets had not been quick to respond positively’ (Interviews, Washington, 1997).
The Bank had clearly made significant efforts since the early 1990s to investigate opportunities for emission reductions that could be included in its investment portfolios, including the development of ‘carbon sinks’, that is funding reforestation, a profoundly complex issue. Recent Bank publications rarely refer to the scientific assessment of the IPPCand associated controoversies. They rather refer to technical advise on how to measure emissions and price the costs of emission reduction. Climate change has become a ‘development issue’, a justification for ODA to private investors, governments and selected NGOs, as well as a means to persuade ‘clients’ of the relevance to them of climate change. The Bank is primarily interested in infra-structure projects in energy and transport in the industrialising South, leaving parts of projects that generate ‘global environmental benefits’ and as such deserving of aid, to the GEF. In contrast, the GEF would be encouraged to be more experimental and innovative, i.e. provide higher risk concessional loans or grants. The Bank’s experience in shaping and serving the GEF now deserves to be explored. It has managed 70 GEF projects in over 57 countries, with a cumulative value of US $674 million (World Bank Environment Department 1997).
5.. The Bank and its baby: a closer look at the GEF
i. Origins and home inside the Bank
This body was proposed by France and several conservation bodies such as the Internationa Union for the Conservation of Nature (IUCN) in 1989 as a joint IMF and Bank responsibility. However, this failed because of the insistence of several European governments supported by developing countriesand against the wishes of the USA. The GEF was formally set up in 1991 by the Bank’s Board of Executive Directors with the aim was to provide additional aid on a grant or highly concessional basis. This aid was to support programmes and activities from which environmental benefits would accrue to the whole world, and which would not otherwise be supported by existing development assistance or environment programmes. The Bank’s environmental lawyer of the Bank at that time, hoped that the GEF ‘might turn out to be a potent green virus in the Bretton Woods software (Sand 1994: 499). It disbursed its first money in some hurry prior to the UN Conference on Environment and Development (UNCED). The GEF is administered by a Secretariat housed inside the Bank, is legally part of the Bank and shares its funds between three Implementing Agencies: the Bank, the United Nations Development Program (UNDP) and the UN Environment Program (UNEP). National environment ministries make their inputs via the CoPs of environmental treaties, such as the FCCC, but also biodiversity, and in a more limited way, ozone depletion, international waters and desertification. The GEF is governed by a its own Council of 35 government representatives speaking for groups of countries, and a Participants Assembly which includes all member of states, of which there are 120 and which met for the first time in New Delhi in 1998 (Boehmer-Young and Boehmer-Christiansen 1998).
The GEF pays the Bank for its professional services, thus opening another pathway, apart from procurement, by which GEF money remains in the North and inside the ‘epistemic community, that is, pays consultants. All review processes are now similar in nature and time. The Bank stresses that it is keen to share its knowledge and experience as ‘lessons learnt’, and ‘good practice’ with UNEP, and FAO (Interview, Washington 1997). It is said that no major GEF project can be financed without the Bank’s approval, which in turn is often beholden to the US Congress (Interviews, 1998). However, opposing views on the status of the GEF vis-à-vis the Bank are held even inside its Secretariat.
The main condition for GEF aid is that projects and activities it support benefit the global environment. Only ‘thereby’ may GEF funds advance ‘sustainable development’. Benefits for the national or local environments, in contrast, may be adequate for a Bank loan. For climate change, the official commitment so far has been to mitigation rather than adaptation, though its scientific and Technical Advisory Panel (STAP) now promotes research in this direction as well. German , American and British scientists have appealed to the GEF for ‘targeted’ research funding. The GEF differs from the Bank in its strenuous attempts to build broad alliances with non-governmental political forces, if only to counter critics in the Bank and elsewhere.
The GEF Secretariat is responsible for obtained the best available scientific advice, (available meaning time and place availability), as well as for good relations between several treaty secretariats, the GEF units in its IAs, with the Bank as itsTrust Fund. Cordiality must also be maintained with numerous NGOs determined to be involved at several levels and have free access to information, and occasionally most useful to the Secretariat in various turf battles and during replenishment. This has led to ‘staggering, mind boggling’ amounts of paper work (Interview, The Bank, Washington 1997). The Secretariat is staffed by about 30 officials, mainly generalists but including environmental and other experts as well as temporary consultants. They tend to interpret ‘valuing the environment’ much more broadly than Bank, though even here there remain observable clashes of belief and priority. There is no full agreement on the nature of climate change, with views ranging from ‘distinguishing human changes of climate change from natural variability remains a challenge’ to the more widely shared assumption that the threat is real and that technological solutions are needed urgently.
By 1997 the governments funding the GEF now seem more or less satisfied that they need do no more than oversee ‘macro-management’ by the Secretariat, though in the UK some grumbles were expressed about lack of success with biodiversity projects and excessive‘top-down’ planning (House of Lords 1998). Governments appear to want to leave the GEF Secretariat to get on with the design, selection, funding and reviewing of projects, as well as with keeping NGOs at bay; that is with ‘micro-management’. Only general guidance is given by the Council which approves work plans. GEF work at the national level lies in the hands a small number of middle ranking civil servants (focal points) either found in overseas development ministries (Annex 1 countries) or industry ministries (Annex 2), though subject to guidance by colleagues from environment and finance.
iii. Structure and Governance
At UNCED considerable pressure was brought to bear by the South to change this ‘facility’ proposed from within the Bank. The GEF was accepted only as an interim mechanism for the implementation of the Climate Change and Biodiversity Conventions, and ‘restructuring’ was demanded. This rather painful process was completed in 1994, though tensions with the CoPs of the relevant Conventions continue as the GEF’s legal ‘Instrument’ is more precise than the Convention, which merely guide the GEF. A considerable amount of discretion remains in the hands of GEF administrators and their available advisors.
Restructuring included the setting up of its Council and agreement on more precise roles for the two UN bodies, UNEP and UNDP, which had been involved in earlier discussions. UNDP came to manage pre-investment and technical assistance projects and a small grants programme for NGOs. UNEP was slow to become involved, rightly perceiving a threat to itself. Its allotted function is to assist with the drafting of policy guidelines and strategic planning to ensure consistency with treaties, and to provide the secretariat function for STAP, a group of individuals through which the IPCC has always gained access to the GEF. The Bank continued to manage the GEF Trust Fund, still identifies and appraises most GEF energy projects, but no longer chairs GEF Council, a post that would fall to the Council and Secretariat. Indeed, the Secretariat was significantly strengthened.
Contributions to the GEF trust fund are voluntary and no longer exclusively from the ‘developed’ world. The GEF Council (or Board) consists of 32 constituencies, into which near universal membership must be fitted. While influential countries, including the UK, may have a single constituency, others combine up to ten countries represented by only one official in rotation. The Council is assisted by about 100 individuals, working inside the GEF Secretariat or in GEF units inside the IAs and Convention secretariats. In theory the GEF takes ‘guidance‘ from the CoP of the FCCC on climate change matters, though in practice this may mean little more than compliance with vague terminology as these CoPs, intergovernmental gathering of middle ranking officials, are generally not well informed about environmental issues and the conventions are still in the process of deciding their policy. Their officials have no legal means of overruling the GEF Council, that is the chamber of governments where these possess unequal influence and voting power due to ‘constituency’ membership. With the GEF legally part of the Bank, and under the Salt Lake City agreement of 1947, UN bodies cannot challenge decisions made by its Council which is legally subject to the Bretton Woods regime. The resulting disagreement over ultimate authority for project decisions remains a matter of some concern to the CoPs. The history of the GEF has therefore been anything but smooth as different parties were attempting to turn it into a test case for either reforming the UN, or the Bretton Woods institutions, quite apart from saving the Planet.
After UNCED, the GEFwas ‘restructured’ in response to much criticism and pressure for more participation, transparency and accountability. The Group of 77 governments and influential conservation NGOs wanted access to more influence and resources through the GEF In 1993, however, at a GEF (pilot phase) Participants Meeting in Cartagena, Colombia, the whole project almost collapsed for internal and external reasons, revealing of the political forces that endanger its survival. Apart from routine N-S clashes, there were problems between European countries, and tensions between ministries from single countries. While the number of attending countries was still small, personal issues of job allocations for civil servants from developing countries led to serious conflicts. There were fights over the role of NGOs, an issue over which the French government is said to have withdrawn it support overnight, thus leaving the OECD group (led by the UK) in the difficult position of having to revoke a previous agreement. The G77 group, always very disciplined, then walk-out, but returned on behind the scenes promises of specific project aid to key governments. The G77 weakened their own position by trading their veto over decisions for jobs in Washington, and gave up their original demands for the position of chairman of the Council to be separate from that of Chief Executive Officer (CEO), and for the CEO not to come from the Bank. (Interviews 1994 -1998). There was, however, a considerable commitment to the GEF by some major donors, probably for domestic political and personal reasons. Some of the civil servants involved held deep environmental convictions and may be considered part of the green epistemic community.
Restructuring was completed in 1994 with the adoption of the GEF ‘Instrument’ (GEF 1995). A complex voting system for the Council had been negotiated. (This has not so far been used as meetings prefer decision-making by consensus.) The routes taken, namely ‘professionalisation’ inside the Secretariat and ‘macro-management’ by Council, have not in my view democratised the decision-making process, which may well have made the Facility less effective. While formally increasing the powers of G 77, real power concerning policy and project decisions now lies in the hands of a dozen or so international civil servants, aided by natural scientists and economists, as well as private advisors to the CEO cum Co-Chairman of the Council.
The Bank was deeply involved in the GEF’s restructuring. In November 1993 a senior World Bank team evaluating the GEF had agreed that radical streamlining and integration of GEF and Bank project identification and review procedures were necessary, while the unique strength of the Bank’s mandatory external technical review arrangements had to preserved and applied to GEF projects as well. Project procedures for both Bank and GEF are identical (but not with UN bodies). The Bank’s influence was clearly not easily diluted. It trained the current GEF’s Chief Executive Officer (CEO) cum c-chairman of Council. GEF staff move quite freely between Bank and Facility, though there are significant tensions over image, competence and above all, consistency of procedures. GEF staff try hard to maintain a separate identity, though interviews suggest that many GEF ‘users’ do not distinguish readily between the two, that is whether the Bank acts as alone or as IA for the GEF.
iv. Administering climate change project
Project selection and approval, while requiring approval from the GEF Council, rests de facto with a small operational committee inside the GEF Secretariat, the GEF’s Operating Committee or GEFOP, which increasingly engages in bi-lateral rather than joint negotiations with the IAs and Convention Secretariats. It selects and amends projects proposed by many applicants but put forward by one of its own IAs. GEFOP consists of members from the Convention Secretariat, the GEF Secretariat and the Implementing Agencies, and allocates money not only to enabling activities and capacity building projects, but also to various innovative, often experimental projects under the climate change label. The IAs as main proposers of projects must ensure that the client ‘country’ remain in the driving seat, or at least approves the project. This has by no means always been the case, nor is it a conditions that is readily satisfied. Indeed, this condition makes ‘professionalism’ rather difficult to practice. GEFOP is indirectly influenced by the mentioned private advisors close to the CEO who clearly has the final say. Scientific experts in STAP seem less important for policy and the smoothing political problems, rather they are also consulted via a formal procedure on agreed projects, but often too late to make major inputs (Interviews 1997; questionnaire replies).
In general, the procedures to access GEF funds are complicated and time consuming. There are always pressures from ‘clients’ to make procedures easier and faster, clients now including the big NGOs, research bodies , the private sector, as well as competing government ministries. Accountability to client and donor governments has to be ‘traded off’ for greater speed with the project cycle, less red tape, and political support. The institutional implication is a considerable degree of centralisation of decision-making power in the Secretariats where complex politics and diverse personalities have to be ‘managed’. The proposing and ‘micro-management’ of projects remain with the IAs and executing bodies over which the GEF has little control in the field. Case studies of GEF failure at this level are available (Bacon, 1998; Young and Makoni forthcoming, Hiremath et al 1997:30). The research reported here could not explore the effectiveness of Bank/GEF influence on national environmental planning. The limited literature available suggests that so far, at least for Bank projects, such planning ‘has played a fairly marginal role in focusing attention on environmental problems and........has not been a very useful instrument in policy-making’, and has in fact tended to be wishful thinking. (Marcussen and Speirs :178). Planning does, however, provide tasks for national bureaucracies and provides data report writing at ‘higher levels’. Perhaps that is all that can be achieved should planning - as it may well be an illusion because it is not possible to plan for the future (ibid.: 179).
Most of the NGOs invited by the GEF Secretariat to participate in the policy formation process and by the IAs to assist with implementation, such as IUCN, WWF and Birdlife International, now claim to have positive relations with the GEF ‘family’ of institutions, and some regularly benefit. Groups like the Nature Conservancy and UNED UK, who lobby for the GEF at the national level, may also be rewarded with funds from the GEF. The small number of commercial parties interested in GEF money tend to work through the IAs, which for climate change primarily means the Bank and International Finance Corporation, the Banks’ private sector lending arm. In essence the GEF funds the implementation of environmental conventions in countries eligible for World Bank concessions or UNDP grants, with the FCCC and its protocol being a major responsibility.
Economists working for the GEF (and Bank, see above) have long worked on climate change; indeed it was here that the idea of measurable incremental costs - the costs of reducing carbon emissions technologically or by correcting ‘market failure’ - was borrowed from academe and in particular environmental economics as taught in the UK. These principles were translated into relatively simple, if still widely misunderstood, calculations and accounting procedures by which the global environmental benefit of specific projects and activities is identified and measured in dollars. Decision-making would, in theory, become transparent and rational. It would also ensure a distinctive niche for the GEF in the competitive business of administering aid.
Yet the concepts of global environmental benefit and incremental cost continue to cause many difficulties with ‘clients’ and NGOs who resent them intensely either because of the logical contortions needed for their ‘operationalisation’(see below), or the ease with which they are manipulated to suit existing preferences. This is especially true for biodiversity projects; climate ones are easier because environmental benefit is created, it is argued, by the cost of abating or potentially abating, carbon dioxide - an entity whose volume is readily calculated. The CoP of the FCCC has apparently asked the GEF not to become involved in Activities Implemented Jointly because of the difficulty of applying the incremental cost concept to such projects. But for the economists on the GEF/WB staff, however, the concept of environmental benefit provides one means for excluding the unprofessional and developing their image as development professionals. For their political masters in the GEF Secretariat and the donor members of the Council (Interviews, UK, Germany, Australia) it remains a fundamental decision aid by which project selection can be made.
v. Funding streams to ‘combat’ climate change
Most funding allocations are subject to ‘guidance’ from the Conventions and final approval by the Council. The primary decision-making body is GEFOP in consultation with the CEO.
During its pilot phase, 1992-1994 the GEF on average provided $131 million per year for the climate change focal area, which might be compared with $183 million spent by the US per year on alternative energy developments during the 1990s, itself a more than three fold increase over the 1980s. Funding projects under the climate change, i.e. carbon reduction label, has used up almost 40 per cent of the GEF’s total resources, slightly more than that spent so far on biodiversity. The GEF is therefore clearly not a major aid provider and must find tight arguments to allocate its limited resources fairly. It tends to hand out sweeteners to potential ‘partners’ - governments, firms and NGO are all in principle eligible provided the country concerned is poor enough- who can convince the Secretariat that their projects, or part thereof, will benefit the global environment as defined by environmental conventions.
In the climate change ‘focal area’ the GEF has funded renewable energy (biomass and solar power), as well as energy efficiency projects, though transport is still knocking at the door. Under the FCCC, enabling activities are a major funding targets as they enable the implementation of reporting requirements. From our limited ability to inspect relevant documents, it appears that only few innovative, technology related energy projects have been rejected, in contrast to the fate of quite a few, less commercially promising UNEP proposals.
Translating what must in the end remain largely political judgements into monetary costs that represent global environmental benefits, remains is a major intellectual effort for all applicants and a source of income for environmental economists who have significantly increased in numbers inside the World Bank , and GEF where they tend not to be described as social scientists.. Entitled to fund only additional or incremental cost arising in a projects (or other activity) from the reduction of emissions (or any other environmental damage agreed to be global) above those that would have been accepted for the sake of the national environment, is difficult. It means that the GEF will rarely fund the full costs of a project (though it may fund all enabling activities). It also means that the ultimate decision-making power rests with those experts who define what is a global benefits and possess the methodology for measuring these benefits, or in the climate case abatement costs assumed to be benefits, against hypothetical baselines of emissions not creating any global benefits.
For global warming such complex funding conditions means that calculations measuring incremental costs need to be made for the efforts to increase energy efficiency, fuel substitution, the adoption of cleaner electricity generating technologies, the development of renewables energy sources or their introduction to potential markets - in fact anything that reduces greenhouse gas emissions cost effectively above what a country would want to achieve anyway. This funding of energy efficiency and renewables is not a new project funded by the Bank, but rather an old one provided with a new justification. Similar projects were planned or started in the 1970s because of very high oil prices. The GEF therefore deals with higher risk energy sector investments. It said to account for about ten percent of the total annual investment in alternative energy in developing countries from all sources (GEF note 1997:14).
Funds are disbursed from various windows or streams which impose different conditions and are aimed at different target groups. The control of the GEF Secretariat/Council over these allocations tends to decline and Bank’s to increase with the size of the grant or concession. involved. Big infra-structure projects in energy, forestry and transport remain very much under the Bank’s aegis and rely on trust funds that are managed by mixed private and public boards and provide sustained financing through capital investment and the dispersal of the net income to support grants to development projects. Full project grants which cost over $1 million are used by the Bank to ‘sweeten’ investments, including from the private sector, so are rarely self-standing projects.
Medium-sized grants are a ‘new window’ for between $50,000 and $1 million which may be allocated with considerably less accountability and bureaucracy compared to the above window. Friendly NGOs hope that these grants will be largely for them as ‘executing’ agencies. They can be seen as rewards for NGOs in donor countries who have supported the GEF. The highly popular Small Grants Programme is already well established and counts as a single grant operated by UNDP and largely serves ‘community-based’ NGOs co-ordinated through national committees which are encouraged to bring together private and public bodies. Again there is less accountability (to the Council) and only approval by the CEO is required for their disbursal. The global green network can therefore direct funds to itself provided supportive relationships between NGOs, the scientific community , which through STAP is formally required to approve larger projects), the GEF Secretariat and GEF units in the IAs, are maintained. Most recently, to ensure that all ‘partners’ may enjoy GEF sweeteners, a Small and Medium-sized Enterprise Program has also been set up which is to be executed by the International Finance Corporation (IFC), that part of the Bank which provides loans only to private sector companies. Technology transfer to combat climate change is cited as major objective.
vi. Green conditionality
The Bank has adequate incentives and powers to impose tough environmental, political and macro-economic conditionalities on ‘client’ governments. most of whom are already subjected to IMF macro-economic conditionalities (Chapman 1997). Environmental and economic conditionalities are part of these lending and aid arrangements, even though GEF aid should be ‘country-driven’, rather a contradiction that is making life very difficult for the GEF. Country-drivennes does not, however, rule out conditionality. Indeed, national governments may not be consulted until very late in the process. From the above analysis of the functioning of the GEF, the political pressures, tensions and opportunities can now be summarised.
vii. Ten layers of interactive global politics
Always tending to frustrate their undoubted commitment to environmental management and a more ‘holistic’ organisational culture, the GEF institutions must manage ten layers of politics before they can manage the global environment. An attempt is made, purely subjectively, to out these in a declining order of significance today. During the restructuring process, the order would have been very different.:
Some simplification of the above complexity has occurred over time and has made life for the ‘GEF family’ a little easier: national politicians appear to have largely lost interest in the GEF and many NGOs may be following this example. Decision-making power, therefore, within the limits of replenishment, lies almost entirely in the hands of intergovernmental and governmental bureaucracies, with the latter tending to delegate to the former. No simple division between national, international and local politics are possible, they all tend to be interwoven to varying degrees. The restructuring in 1994 de facto strengthened its GEF Secretariat at the expense of most governments and to the advantage of the ‘reformist’ green epistemic community with El-Ashry as a charismatic persuader and ultimate decision-maker (interviews, questionnaires). Personal charm and intellectual power, plus the ability to ‘twist arms’ are major assets applied effectively to pre-conference informal negotiations and ‘off-the -record’ informal meetings with the personal advisors. As well as allocating funds on the basis of difficult and often imprecise criteria, GEF documents demonstrate considerable pressure on its Secretariat to ensure inter-agency consultation and co-operation in what are in essence competitive relationships. The negotiated ‘equal’ status of Bank, UNDP and UNEP remains a formality given their resource and status differentials.
5. Towards Identifying the Green Elite
i. The Fifth World Bank Conference on Environmentally Sustainable Development
To support my observation that the belief system shared by senior bureaucrats in the Bank and its global support network, including the postulated green epistemic community, is largely created by an Anglo-Saxon education in a rather narrow range of disciplines, the CVs provided by speakers to the Fifth World Bank Conference on Environmentally Sustainable Development, October 6-7 1997 were analysed. The available biographies of 41 participants are used to demonstrate the educational, national and institutional identity of an elite which is taken as representative of a green global policy network or a part of a wider epistemic community of environmentalists and their immediate beneficiaries. . While several of these were working for the Bank, others were selected from friends in academe, NGOs and government. The education of this group will inculcate confidence in the management of society and natural resources and tends to be instrumental in its approach to knowledge, and rational (in the sense of liberal economics) in its objectives. This places trusts the validity of neo-liberal economic thought, balanced by prudent state regulations, and subject to global legal restraints.
ii. The national, educational and institutional background of the green elite
See Appenix: Table
iii. The eductionl background
Most members of this group were trained in elite universities in the USA and UK/Australia/Canada, usually to doctoral level. Only a few other universities, all in OECD countries, made some contribution at this level. Strong Middle-Eastern/African representation, achieved through the Bank’s young professionals programme, suggests a significant element of ‘brain drain’ to Washington from these regions. East Asia, Central Europe and the former USSR are hardly represented. Males dominate with 37 out of 41 speakers, with 3 of the 4 women classified as senior civil servants from North America (though one might be a consultant), the fourth being a Latin American representing the International Union for the Conservation of Nature (IUCN) as a president, but neglecting to provide information on her educational background. With respect to professional backgrounds in general, the panel was dominated by senior administrators (25 out of 41) with only one individual each clearly fitting into the categories of ‘politician’ (a former Swedish prime minister) or ‘businessman’, actually the President of the Bank himself. Seventeen people had either been or continued to work academics. Some mobility between senior NGO employees and the Bank is also indicated.
With respect to disciplinary educational background, people trained in the natural sciences (11, including the CEO of the GEF), engineering (6, plus one planner) and economics (11) clearly predominated, (28 out of: 41), with three individuals having trained in both economics and engineering and insufficient educational information being given for 6 people, including Maurice Strong. The remaining ten individuals included two lawyers, the small remainder having been trained in the ‘softer’ arts or humanities, a group which included three women. For the seven people identified as having close links to NGOs, or representing them at the meeting, one (Maurice Strong) might also be viewed as one of the two businessman present,(or even as a failed politician). Strong admitted only to multiple honorary doctorates. One person served the World Watch Institute as a mathematician-cum-economist, the remainder serving, or having served NGOs as evolutionary biologist, anthropologist, or as a member of SCOPE, the Scientific Committee on Problems of the Environment of the International Council of Scientific Unions. The last body organises global environmental change research and has, incidentally, two of its representatives inside the GEFs STAP.
The ‘global’ green elite is certainly no longer purely white in skin colour, though whites clearly predominate. Education in the less global social sciences and arts does not seem to provide the required training and beliefs. Nobody at this level can, or even tried to represent the ‘uneducated’, young or poor. The green network assumed to underpin this elite is understood as an exclusive club that deserves the name of meritocracy and probably suffers from intellectual arrogance. Their speeches and publications certainly provide evidence for their use of at least some of Rayner’s (1994) five hegemonic myths: global vulnerability, per capita equality, historical obligation, and market solutions, though for the advocacy of the fifth myth, voluntary frugality, little evidence could be found. With these myths acting as justification for claims to global environmental governance, this elite arguably attempts to govern through intellect, technology, access to wealth and law. Beyond this grand vision and probably in the end more real and realisable, is the need of this self-selected ‘priesthood’, to maintain itself and its supporters. The financial resources for doing this are not derived primarily from its own efforts, but from tax payers in ‘donor’ countries. To keep these resources flowing, persuasion is needed; and persuasion not rationality is surely the essence of politics. The Bank/GEF have helped to set up and fund support network for science-based NGOs and government offices in developing countries. Depoliticised through their interests and methodologies, the natural and economic sciences serve the GEF ‘family’ through the IPCC and STAP. Are they seduced to do so by the brilliance of the intellectual environment and the promise of technocratic power and funding, or the invitation to serve ‘development’ with objectivity, efficiency and cost-effective equity (WMO/UNEP 1995, DoE 1991).
iv. A shared belief system
Neo-liberal economic theory provides the elite with a prescription for achieving ‘efficiency’, though for climate protection, this cannot be achieved without major government intervention. Governments need to define standards or taxes which bureaucracies must administer and enforce. The institutions of the natural sciences are required only to deliver the ‘consensus’ to legitimate this intervention with reference to a real, probable or modelled environmental threat. This does not come easily to science, as shown by the fierce negotiation between IPCC scientists taking place under considerable political pressure within the IPCC over the evidence for the hypothesis of human induced climatic warming, and the ambivalence of its conclusions. In contrast, World Bank/GEF documents and propaganda, though claiming to be based on natural science, continuing scientific debates and uncertainties are hardly mentioned. In the GEF too, the influence of natural scientists on project selection is low and possibly declining. From the political perspective the work of science appears to have been done, or will they challenge their own consensus to move on the research agenda - from mitigation to adaptation ? If so, any response which makes the causation of warming less relevant and undermines current energy focused mitigation strategies, might also undermine aspects of global environmentalism.
6. Impacts on international relations
i.. The climate treaty in international politics: an invitation for intervention and service
Were the Bank to succeed in its aim of ‘mainstreaming’ -or integrating - climate change fully into all its own projects as well as national developments, the environmental function of the GEF would become redundant, though a political rationale, such as weakening - or reforming - UN agencies in the aid business, may ensure survival. The GEF may well be seeking a role in the CDM, realising that without this, the CoP of the Climate Convention would de facto allow the Bank to become their financial mechanism, something they fought against at UNCED and for which they were rewarded with the ‘hybrid’ GEF. So rivalry all round still continues and does not bode well for effective action on the ground. Formally, however, the GEF is likely to survive as a distinct ‘entity’ and probably as a thorn in the side of the Bank.
Nevertheless, the Bank rather than the GEF was a significant actor in the preparation of Kyoto and is likely to remains so as big three (EU, USA and Japan) and the G 77 group continue their negotiations. In the mean time, the precise roles of the Bank and the GEF in the implementation of climate policy will remain uncertain. The negotiations over the division of the non-environmental spoils of emission reduction policies are unlikely to fail, and hence deliver global bureaucratic tasks, because too much political and bureaucratic capital has now been invested to admit failure. The synergies possible between energy policy, emission reduction, international and finance, aid and trade, as well as global governance procedures, seems strong enough indicate to provide sufficient ‘no-regret’ reasons for going ahead with a degree of implementation. Effects on climate are only likely to follow, if at all, if arrangements yet to be fully negotiated will create profits ‘from emission reduction, not brokers’ transactions’ (Oyuela 1998:10). It is not clear that the Bank is supporting such a solution. It may well be seeking only the profits, including well-paid consultancies handed out to pragmatic supporters and true believers in the post-socialist experiment in ‘sustainable development’ and ‘global governance’. In this experiment, the threat of environmental doom is likely to play a growing role unless the scientific institutions change their mind.
Immediate, non-environmental benefits which derive from the management of a future environmental problem are not, however, only economic. They are also political in nature - enhancing competence, status and access to information. These benefits will accrue to the elites which manage and advise the Bank irrespective of any environmental impacts of their policies. If this interpretation is correct, one can also argue that the Bretton Woods institutions, including the GEF, because of their ‘interventionism’, are indirectly serving the weakening of the modern state system, and especially its welfare functions as achieved in the ‘West’ in the past and apparently being sacrificed to global competitiveness. The development of human welfare is not achieved through the market, though environmental protection may. The accusation is already often heard among radical NGOs that the Bank, through its environmentalism, practises a new form of green imperialism (Young, 1999, Environmental Politics, forthcoming). This may further expose politically weak elites to the management by ‘civil society’, meaning foreign corporations and NGOs funded from abroad, long before stable and effective legal systems have been set up.
The Bank and its allies is now claiming, without much evidence as yet, that they can ‘facilitate’ global governance by directing, or ‘leveraging’ private funds and ‘rational’ knowledge to desirable ends. Official aid alone clearly cannot develop the South, let alone do so sustainably. Hence seeking a role and justification for securing, directing, monitoring and evaluating private flows will ensures a political role for the Bank in spite of decreasing financial support from governments. The real issue for the analyst is whether ending such a role would improve international relations and human conditions in developing countries , as many green critics tend to claim (Bello1994).
ii. Post-modern philosophers provide the space for intervention, the experts the wish
Ironically, the project of global governance and the growing conditionality of aid, to which the environmental agenda appears to be so closely connected, may depend for their political success on ‘post-modern’ philosophies. Post-modern thought, it has been argued , has through their very lack of interest in the macro-political and structural, supported fragmentation, introspection and individualism in the North, thereby allowing an orientation abroad which tolerates the globalisation agenda of an intellectual and political ‘project’ which the North has largely discarded as ‘modern’ (Kofman and Youngs 1997), or which its ‘post-socialist’ philosophers have decided to ignore (Hornsey 1996; see also the literature on the risk society and ecological modernisation). Environmental advocates and their professionals supporters and intellectual mentors may have been enabled by this neglect to engage in a global development mission that may result in anything but One World.
What the Bank and its thinkers may also ignore is that their strategy of minimising disputes over the distribution of economic costs between states, is likely to contribute to conflicts over the distribution of political power inside nations and hence to political instability - which may well deter the all important private investors. By not making political implications explicit in their analyses, indeed by claiming to be non-political and merely offering facilitation, the Bank/GEF and their funders may be testing a dangerously one-dimensional model of the world for which they cannot offer risk insurance, though their theories promises to develop the South economically, protect the climate and alleviate poverty simultaneously. Such so-called ‘win-win-win’ strategies are suspect and ignore a broad range of relevant knowledge. The success of the climate project as technology transfer and more efficient global governance is therefore by no means certain, though in the interim non-environmental benefits will accrue and contribute to the internal and external politics of the Bank, GEF and several UN agencies, and hence to aspects of intergovernmental and international relations.
iii. The green elite: can it shape sustainable global institutions?
Global institutions, including the Bretton Woods group are served by a technocracy selected from Anglo-Saxon institutions, especially universities and bureaucracies which are the home for a growing number of approved environmentalists brought together by a shared faith in future environmental doom unless ‘precautionary’ advice is taken and global prescriptions are adopted (Interviews, New York and Washington, Montreal 1997; Wade 1997, World Bank 1996). The political power of this elite, though still a small, has grown because of the attraction of its message to non-environmental interests and values. Given its small size, the unpredictability of the future and the unreliability of natural science as the ‘underpinning’ of climate policy, will the elite be persuasive enough to deliver effective ‘mitigation’ beyond serving itself, as well as contribute to the improved governance? No answer can as yet be given.
The success of a green elite, or network of advocates and committed experts inside governmental and intergovernmental bureaucracies, requires support from international networks on the outside. It has to bring together environmental advocacy, research institutions, finance and active but ‘responsible’ groups from civil society. Via ‘partisan mutual adjustment’ (Lindblohm 1965), these groups have greened the Bank and set up the GEF; they do advocate and select ‘green’ projects, and also impose conditionalities to attract aid to the poor and sweeteners to wealthy corporations so that these may alter their priorities. The private sector, thus ‘bribed’, is expected to deliver more environmental protection at more ‘competitive’ prices. But what is the political price? What is excluded from the triple win strategies ? Perhaps it is this which the recipients of green aid are most likely to loose, the development of indigenous decision-making powers and institutions.
Working through and from the greend intergovernmental bodies, the green elite has gained the support of selected global corporations and NGOs that are dedicated to conserving what their members value most in ‘nature’. In practice this is likely to mean controlling the development process of potential commercial and political competitors, (as well as conserving access to wilderness and game hunting areas in the name of biodiversity). Steps are being taken to promote the technocratic management of ‘the environment’ in the client countries with little reference to political, cultural and environmental diversity, though there will be much ‘participatory social and environmental assessment’, monitoring and project evaluation. For the strategy to succeed globally for the energy sector, this will need and probably has had since 1997, the support of the US corporation and government (Nature 1997). As implicit allies, the big conservation NGOs and energy corporations that benefit from their links with the intergovernmental financial institutions, have become global political actors. However, only weak administrations are likely to fall under the full influence of their global partnership.
iv. Preventing the growth of independence in the South?
Despite the best of intentions of global ‘partners’ in development, including the stress put on participation, learning, openness and transparency, many scholars observe, even in the North, the prevalence of
systems of governance which are not responsive to, or even aware of, their constitutive publics - whether this be at the level of national governments ....or international policy elite within the UN.... (Shackley et al 1998:77)
Green conditionality and the very idea of distinguishing between global and local environments, cannot but increase the lack of responsiveness to governments and people that are being aided. One can argue that real responsiveness is impossible, especially, at the global level for an issue as future, research and investment oriented as anthropogenic climate change, and that the tasks urged upon international administrators by the green policy elite concerning ‘governance’ and environmental protection are unrealistic, serving instead a type of realpolitik in which gon-governmental actos are sought as allies of sub-national governmental interests.
The observed functioning of the GEF, being in the centre of so many tensions and pressures, is sen to demonstrate that structural forces, including the complexity of institutional politics, tends to bring about the centralisation and partial privatisation of decision-making power in the hands of a small group of professionals and their advisors. These groups are constrained less by public opposition than by excessive and conflicting demands, lack of resources, ideological fashions and conflicting interests among themselves. Can they be accused, with Leyshon and Tickell, that they practise ‘power’ without responsibility? (in Kofman 1996:290). They may have no choice if they want to practise at all. But what are the unintended effects of such practice?
I argue, tentatively, that the effect if not intention of the current solutions offered by the these groups, including the Bank and its allies - even if successful in their attempts to involve ‘civil society’ - is the further weakening of the state as a protective institution in developing countries, that is in societies that have failed to achieve ‘sovereignty’ since emerging from Western tutelage. Some may applaud this, other may fear the political consequences. In either case, this weakening will be described by OECD states as UN reform. The degree to which such reform serves to strengthen the Bretton Woods institutions, and hence ‘Anglo-Saxon’ intellectual hegemony over ‘sustainable development’, deserve future political analysis. While a weakening of the UN system in the post-Communist era may be no surprise, has this been encouraged by NGOs and an epistemic community wooed as allies in international environmental politics and rewarded with public resources?
6. Tentative Conclusions
The reality of dangerous anthropogenic global warming caused by greenhouse gas emission, and the belief that it is preventable by technological fixes, are fundamental assumptions underlying current climate protection policies pursued by the Bank/GEF and the UN. Were these assumptions to be wrong, then the proposed solutions - technology transfer and emission trading - would serve other ends. As mentioned, it is assumed that these solutions already underpin much of the obervable activism on climate protection and that this benefits the North. This the so because emission mitigation related policies as implemented as justifications for advancing ‘the manic logic of global capitalism’(Greider 1997). The rhetoric of ‘ecological modernisation’ and the rather dubious distinction between global and other environments have allowed the Bank and GEF to market themselves as development agents in possession of superior knowledge and expertise. This in turn is leading to encroachment on the functions of existing UN agencies, a process which is judged to have been intentional, reflecting the realities of post-cold war power politics.
While the genuine conversion of the Bank to environmental protection must remain open to debate, the research intensive promise of technological leap-frogging has attracted many non-governmental supporters to the Bank policy (Schneider, 1998). Rhetoric has greened in response and aid now given has included the separate stream for the global environment. The GEF was a prize for the green elite and a pay-off to developing countries who wanted a financial mechanism more responsive to themselves. As long as Southern elites pine for investments from the North where taxpayers remain persuaded that their security and income are served by combating the climate threat more cheaply abroad, a bargain has been struck not only between North and South, but also between the Bank/GEF and a weakened UN. This bargain, while involving encroachment, is disguised as partnership. It would come unstuck were the institutions of global science to fail politics, which is surely unlikely.
Resistance to the Bank, if desired, cannot come from complaints about its secrecy or global planning efforts even if disguised by free-market dogma.. If at all, resistance must come from concern about the political impacts of attempts made to implement politically agreed policies without making these politics clear, and hence from the intellectual rejection of some of the assumptions and myths underlying the ‘facilitation’ of global eco-modernisation by leverage of international financial flows. Given the nature of the ‘Bank’, GEF and UN agencies as the homes of alliances between bureaucratic elites supported by the relevant research industries in the North, they cannot be expected to ‘do better’ for the environment than politics will allow them. More fundamental geo-political changes ‘from below’ are needed for change at the top. Between these groups, however, and reflecting contemporary realpolitik which is increasingly played with knowledge and information, and whose costs of transfer (though not adoption) are plummeting, competition and rivalry leading to duplication and some waste of scarce resources is likely to be unavoidable. This inefficiency may well be the price that needs to be paid to keep a system of intergovernmental international relations going at all.
Since international civil servants have been given the task of saving the planet from ‘global’ environmental degradation by using (weak) international law and a set of global financial institutions not legally subject to the UN norms, rows between the UN system and Bretton Woods bodies, are preprogrammed. This was revealed during the GEF’s restructuring, and is confirmed by recurring tensions, for example between UNEP and the GEF, as well as the latter’s apprehension that it may be ‘mainstreamed’ away. Intergovernmental tensions may well have been reduced by the ‘hybridisation’ of the GEF, but intra-governmental bureaucratic turf battles continue to afflict the whole GEF ‘family; the idea that it may act as example for the reform of the UN more generally, is better put to rest. Almost unimpeded by any constituency other than an overworked group of national civil servants (themselves at the mercy of national treasuries), the GEF Secretariat remains subject primarily to internal political constraints, thriving only because of the personal integrity of a small number of individuals inside, and any support that NGOs may give at the margin. Both the Bank and the GEF need non-governmental allies and have taken these away from the UN. **Though accountable only to ‘states’ which they cannot be influenced with grants or the payment of fares, strong individuals from the NGO community who can claim to represent expertise and the interests of humanity, are sought as political allies. However, the institutional weakness of this elite once the agenda has been set, the ‘discourse’ agreed and governments been asked to spend public money, also creates difficulties for intergovernmental secretariats. The temptation remains that the little money that government allocate to the environment, primarily maintains bureaucracies and their allies, raising the ultimate question of the whether the world would be a better place without international aid. An empirical answer seems impossible.
Current climate negotiations favour the Bank/GEF regime of governance, that is administration, over that of the UN. Flexibility remains the keyword, however, and some role is likely to be given to each contender, with the control over investment criteria remaining with the Bretton Woods institutions. The GEF has now achieved a degree of independence from political supervision which make it a favourite for the Clean Development Mechanism, with UN agencies being called upon to implement rather than decide. The threat of global eco-catastrophe is likely to remain an attractive tool for the Bank and the UN to attract attention and money to ‘common’ causes, even if only to weaken domestic opposition in donor societies to resource transfers to industrialising competitors. International financial bureaucracies will promise their lenders and aid givers that in the longer term, more wealth will return to them, and that a little charity today will not require a modification of the global visions the Northern political class. These myths enable the Bank and GEF, through a small number of effective international civil servants ‘networking’ with their counterparts at national levels and advised by a single epistemic community - both and working in a context of limited political accountability - to encroach upon environmental policy making cum national planning for ‘sustainable’ development in two areas: the relevant UN agencies, especially UNDP and UNEP, and from administratively weak governments. Behind this effort appears to be not only genuine environmental concerns, but also that without such efforts, a ‘damaging leakage’ of carbon intensive industries to the South may take place (Stiglitz 1997). Bureaucratic intervention in the name of climate protection promises achieve the economic protection governing elites worldwide seek and which the USAand its allies have practised for some time through their support for political polyarchy abroad. This objective is already being pursued through the uneasy partnership between the Bank, GEF and the UN agencies described above. As representatives of these elites, but with de facto control in the hands of bureaucracies committed to global political stability , these intergovernmental bodies are able to negotiate degrees of co-operation through globally available networks based on information and shared intellectual assumptions, that is knowledge selectively linked to power. The reality and strength of green social movements is tested by such a development, as is the view that thinking globally will protect the environemnt.
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