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In November 2008, the president of Bolivia, Evo Morales, wrote an open letter entitled "Climate change: it is necessary to save the planet from capitalism". In said letter, Morales expresses the demands and concerns of many peoples, movements and organisations around the climate crisis and the decisions that are being made by those who are suppposed to be "our leaders". When one of the main solutions pointed out is to strengthen the role of Multilateral Financial Institutions (MFIs) – such as the World Bank – which played a key role in the elaboration and implementation of the same policies that are responsible for the crisis, it is impossible not to wonder whether the goal is to save the planet or capitalism.

The practice of Multilateral Financial Institutions is opposed to their discourse, also with regards to the climate crisis. In view of an alarming reality, they continue to create opportunities to make more and more profit.

In November 2008, the president of Bolivia, Evo Morales, wrote an open letter entitled "Cambio climático: es preciso salvar al planeta del capitalismo” [Climate change: it is necessary to save the planet from capitalism]. In said letter, Morales expresses the demands and concerns of many peoples, movements and organisations around the climate crisis and the decisions that are being made by those who are suppposed to be “our leaders”. When one of the main solutions pointed out is to strengthen the role of Multilateral Financial Institutions (MFIs) – such as the World Bank – which played a key role in the elaboration and implementation of the same policies that are responsible for the crisis, it is impossible not to wonder whether the goal is to save the planet or capitalism.

Over-exploitation and over-consumption of natural resources, mainly by Northern countries, are the actual causes of climate change. As a result of human activities, extreme climate changes, droughts and floods, reduced agricultural production, loss of species and destruction of ecosystems, an increased sea level, the disappearance of territories, the sharp increase of environmental refugees and other social conflicts, could end up being part of our daily life provided radical changes failed to be implemented as of now.

The drought in the Amazon basin in 2005 – a region which contains more than 20% of fresh water on Earth – which affected over 250,000 people in the states of Amazonas and Para, is a clear example of this current threat1. Nevertheless, as if this wasn’t enough, the water, land and traditional cultures will be turned into commodities. Nowadays, even global warming has become a business. A lucrative business.

Contradictions that repeat themselves

False solutions, such as the carbon market, agrofuels, hydroelectric power plants and nuclear energy, are increasingly being promoted. Those who contaminate the most are not interested in fulfilling the poor commitments undertaken. Until 2006, greenhouse gas emissions (GGE) had increased 9.1% with regards to 1990 levels2. Apart from this, the proposals submitted give priority to mitigation and adaptation mechanisms that basically avoid a real reduction in emissions and open the way for more businesses. One of the leaders of this process is the World Bank.

Historically, the World Bank has been one of the major financiers of large hydroelectric and thermoelectric plants, agrobusinesses, fossil fuel projects and the privatisation of the energy sector; all of them contributing, in a way or another, to global warming. The Bank continues to invest between 2 and 3 billion dollars per year in energy projects, which are responsible for greenhouse gas emissions. Although the “Extractive Industries Review” carried out by the Bank itself, had recommended in 2004 that “the World Bank Group should gradually reduce investments in oil production until 2008”, its financial support for fossil fuel projects indeed increased in 2007. On the other hand, in the fiscal year 2006, World Bank loans for renewable energy projects accounted for less than 4% of its 4.4 billion dollars in loans for the energy sector3.

An example in the Amazon Basin

Greenhouse gas emissions resulting from deforestation account for 20% of global emissions and 75% of domestic emissions in Brazil. While in Brazil the main source of deforestation is extensive cattle ranching, the International Finance Corporation (IFC), the private sector arm of the World Bank, approved in early 2007 a 90 million dollar loan for the cold-storage company, Bertim, aiming at doubling its annual supply capacity in Marabá (Pará) and at expanding its activities in Rondonia and Mato Grosso4. That is, the IFC is funding the CO2 emissions resulting from deforestation and methane from cattle breeding.

However, the World Bank continues to express concern about climate change and leads the lucrative carbon international market. Before launching the Climate Investment Fund (CIF) in July 2008, the Bank was already administrating ten different global funds, totalling the amount of over 2 billion dollars on behalf of 16 governments and 64 private companies, making a profit of 13% on each transaction5.

The first carbon trade projects – such as methane uptake from toxic waste deposits and carbon discarding from genetically modified plants – resulted in large profit for companies of the respective sectors and commissions for the World Bank. On the other hand, these projects have shown limited effectiveness in the reduction of emissions, apart from promoting other socio-envionmental problems.

Such projects granting corporations “the right to contaminate”, fail to change the production and consumption practices that are necessary to cope with the problem in a structural manner. Now, the Bank will be the administrator – which means more loans – of over 50 billion dollars. This amount will be allocated to Southern countries to become adapted to climate change. In other words, more illegitimate external debt, more conditionalities, more profit for market transnationals and an increased ecological and social debt which the North already owes the South.

The Inter-American Development Bank (IDB) has also already included climate change in its discourse. Nevertheless, once again, there is a long way between discourse and practice.

For instance, the IDB is already incorporating the condition that the country must include a fund to cover climate risks into its plans and projects. In this way, besides not forbidding, or at least avoiding climate risks, any risk is covered by the borrower and not by the Bank.

One crisis leads to another

With an initial contribution of 20 million dollars, the IDB launched the Sustainable Energy and Climate Change Initiative in August 2007, mainly aimed at financing agrofuels and mitigation and adaptation initiatives6. The production of agrofuels, to be used in Northern countries’ cars, takes place at the expense of increasing food prices and, thus, of food sovereignty, in a context in which a serious food crisis is already going on. When agrofuels occupy crop areas, thus expelling family farming, they destroy lands that are carbon deposits such as woods.

In the same way, the technical assistance projects of the International Monetary Fund (IMF) for “the macroeconomic, fiscal and financial challenges of climate change” have conditionalies attached that violate the sovereign right of nations to determine their own future.

“Our leaders” should acknowledge Southern countries as creditors of a large ecological debt and ensure reparations and compensations for committed climate crimes. To the extent in which 90% of carbon emissions are from corporations and Northern countries, the populations that are most affected by the consequences live in Southern countries. Rather than being reinforced, those who are blamed for such crimes must take their responsibility. The projects and programmes aimed at dealing with the climate crisis must be paid by Northern governments, corporations and the global elite, rather than by people.

Basically, the only real solution is to attack the structural causes of climate change. As president Evo Morales says: “climate change has placed all humankind before a great choice: to continue along the path of capitalism and death, or to build the path of harmony with nature and respect for life”. Which path are we going to choose? If climate continues in the hands of MFIs we already know the answer.

Fabrina Furtado is economist and executive secretary of Jubilee South - fabrina@jubileesouth.org

This article was first published in Portugues language on the Magazine Contra Corriente: "Who wins with the destruction of the Amazon?", edited by Rede Brazil on Multilateral Financial Institutions and launched at the World Social Forum 2009.

Notes:

1) De Souza Braga, Osvaldo and Zanchetta, Ines. Seca na Amazônia: alguma coisa está fora da ordem. October, 2005. Available at:
www.brasiloeste.com.br/noticia/1654/seca-amazonia
2) Morales, Evo. Save the planet from capitalism. November, 2008. Available at: www.alternativabolivariana.org/modules.php?name=News&file=article&sid=3749
3) SEEN. How the World Bank Energy Framework Sells the Climate and Poor People Short. September, 2006. Available at: www.seen.org
4) IFC. Latin America and the Caribbean: Project Information. 2007. Available at:
www.ifc.org/ifcext/lac.nsf/Content/Project+Information
5) WORLD BANK. Carbon Funds and Facilities. Available at: www.worldbank.org
6) IDB. The IDB’s Sustainable Energy and Climate Change Initiative (SECCI) supports the efforts of Brazil-United States to promote biofuels in Central America and the Caribbean. January, 2008. Available at:
www.iadb.org/news/detail.cfm?language=EN&id=4371

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