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(October 5, 2015) The World Bank, with an overarching mission to end poverty, hosts its Annual Meetings this week in Peru. Given that the impacts of climate change disproportionately harm the poor, and that world leaders are set to make a global agreement on climate change this December, climate is at the top of the World Bank agenda.
Peru is an interesting place for the Bank’s Annual Meetings as it is one of the most vulnerable countries in the world to climate change impacts. This week, the Bank Information Center (BIC), 11.11.11 and Derecho Ambiente y Recursos Naturales (DAR) released an assessment of the World Bank’s Peru portfolio, which found that the Bank’s model of growth in Peru has exacerbated Peru’s vulnerability to climate change risks.
At the forefront of climate change risks in Peru are water resources and the Amazon forest. Peru is already facing large water shortages, and climate change is making it worse through melting glaciers and changes in precipitation. Peru’s Amazon forests represent vital climate mitigation through significant carbon absorption, and when cut down, a huge source of carbon dioxide emissions. In fact, land use change is Peru’s largest source of greenhouse gas emissions. Unfortunately, Peru is losing its forests faster than any other Amazon country outside of Brazil.
The new report reveals that over the last two decades, the Bank’s Peru portfolio had a high concentration of policy reforms and project investments aimed at expanding export agriculture, mining, and oil & gas. The report indicates that the Bank increased these activities, which drive water scarcity and deforestation, without adequately improving the country’s regulations and capacity to manage and protect water and forest resources. For example, Bank-supported land tenure reforms aimed to increase land holdings through large-scale operations in these sectors without safeguarding land rights for poor communities, including for indigenous people.
According to Cesar Gamboa from Derecho Ambiente y Recursos Naturales: “Even though Bank efforts to improve irrigation efficiency were very important in Peru, these efforts were not coupled with sustainable limitations to agriculture and mining expansion or equitable distribution of water rights. Consequently, aquifers are over exploited, water scarcity has intensified, and small farmers and poor communities are left fighting for access to water.”
In addition, Peru’s increasing forest loss is largely due to the expansion of agriculture and roads, including those associated with mining and hydrocarbon development. Nezir Sinani from Bank Information Center indicates that “oil and gas concessions now cover 75 percent of Peru’s Amazon forests with as much as one half overlapping with nature and indigenous reserves.” Sinani further points out that “the majority of these oil and gas concessions were awarded after Peru’s adoption of Bank-supported policy reforms that provided subsidies to hydrocarbon investments, including tax breaks.”
In addition to increasing fossil fuel subsidies, which the Bank has recently pledged to eliminate, the report shows that the Bank’s energy sector investments in Peru were overly-focused on oil and gas, mainly the export of gas, with very little for climate-smart renewables. Pol Vandevoort from 11.11.11 points out that “since 2000, Bank investments in primary energy sources were 81 percent to oil and gas and only 3 percent to small hydropower (generally less than 10 MW) and solar PV systems. The remaining 16 percent went to large hydropower, which also poses climate change risks.”
To avoid repeating these climate vulnerable development outcomes, the report concludes that the World Bank needs to adopt a robust Climate Change Assessment Safeguard.ii Such a safeguard would need to specifically cover all investment and policy lending operations of the Bank. It would address the direct and indirect impacts to water and forests and problems around poor communities’ access to these resources. It would also eliminate fossil fuel subsidies. This climate safeguard would help countries world-wide meet their current and future climate pledges.
Nezir Sinani, Bank Information Center, US
+1 (202) 445-4219
Cesar Gamboa, Derecho Ambiente y Recursos Naturales (DAR), Peru
Pol Vandevoort, 11.11.11- Coalition of the Flemish North-South Movement, Belgium
+32 497 545182
i Full Report “The World Bank Group’s Peru Portfolio and Climate Change”: http://www.bankinformationcenter.org/wp-content/uploads/2015/08/Peru-Climate-Change-full.pdf
ii Civil Society Organizations proposal to the World Bank on Climate Change Assessment: http://www.bankinformationcenter.org/wp-content/uploads/2014/05/Climate-Change-Safeguard-Model-Policy-for-the-World-Bank.pdf