World Bank interview: COP26 delegates came loaded with commitments, but will they deliver?

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The UN Climate Change conference in Glasgow has finished its first week. Promising commitments were made but there's a great deal of criticism and concern as to whether ambitious goals will be achieved.

RFI's Jan van der Made spoke with Mari Elka Pangestu, formerly Indonesia's trade minister and currently managing director of development policy and partnerships in the World Bank, the world’s biggest multilateral financier of climate action in developing countries.

During the first week of the climate change conference in Glasgow, plans were laid out and commitments were made. And next week, it is hoped, there will be a comprehensive agreement.

Jan van der Made:

What are your expectations of this COP26?

Mari Pangestu:

I think I am a little optimistic, because what we have seen is, compared to other COPs, and especially since Paris, we see a heightened level of political commitment from many countries. Presumably some are not quite there yet.

But you see a heightened level of commitment, evidenced by the number of leaders who did come ... and the number of ministers who came.

The private sector is really in abundance here. Both the financial sector, the investors, the insurance funds, insurance companies, as well as the big manufacturing companies and consumer related companies.

And everybody is making calls for action and doing what they should be doing in their particular area or sector.

There are a lot of good intentions and a will to move [forward]. But I think post-COP will be the big issue, in terms of implementation. As always, the devil will be in the details.

Jan van der Made:

How would you describe the atmosphere among delegates?

Mari Pangestu:

It's pretty good. I think most delegates are feeling hopeful, excited, asking a lot of questions about the how to - and I think that is good. Also you have the usual dose of scepticism, and questioning.

For instance the famous 130 trillion dollar that is creating a lot of discussion here. 'Ok that sounds good, how do you actually access that and how do you actually deliver that to countries. How can you make sure that we can achieve the climate and development agenda?'

And for developing countries, with really limited resources, they will need additional resources and technology. It is the big post COP26 homework, but at least the intention is there to mainstream climate into development, into the whole of government approach, it is really beginning to happen.

Jan van der Made:

The World Bank was invited as the interim trustee for the Green Climate Fund. According to the World Bank website, different countries have contributed some $15 billion. The French government, which is the major contributor to the fund, says that it was aiming for $100 billion in 2020 alone. It also says that 'an estimated $1,000 billion needs to be invested annually in developing climate-friendly renewable energy production' - the French government's words.

Of course the World Bank may not be the only fund, but it seems that there is not enough money by to ever reach this one trillion per year. How do you see this, and what does this mean for putting plans in place?

Mari Pangestu:

You have two numbers out there. It's the $100 billion public funding of which the bank actually contributes a quarter of that $100 billion because it is public in the sense of the multilateral development banks, the regional development banks and the bilateral donors.

That's what's meant by the $100 billion and that $100 billion is what we call the public funding. And then there's the private sector, which is the $130 trillion. To get to one trillion euros a year - [these are] the additional resources that we need to achieve [these goals], especially in developing countries, climate and development.

And a lot of that will be in the energy sector. You will need not just public funding, but also private sector [funding]. You need both. Public funding can be used to support countries to prepare the long term low carbon development strategy and the reforms that will be needed to have the energy, transport or agricultural transition.

It has to be people focused, just like you can't have stranded assets in the case of coal or fossil fuel based power systems. You can't have stranded communities or stranded workers or stranded people.

And in the overall package, some parts, like retraining of workers or decommissioning a coal plant will have to come from public funding.

But the rest like repurposing the asset renewable energy and replacing the coal that can come from the private sector.

Jan van der Made:

Some of the most notorious coal users, notably China, have made commitments. For example Beijing issued a key policy paper in September with ambitious plans. But reports from the ground suggest that implementation of coal cutting policies is hard. What tools does the World Bank have, as money lender, to guarantee that countries actually live up to the commitments made here?

Mari Pangestu:

Commitments are made by countries. So the first thing we do, including with countries like China, is we support them with analytics diagnostics putting climate as integral to development plans. And that is a recognition of how climate risks need to be built into your long term macro and growth simulations.

And the models that I have seen have the ability to show you that the cost of inaction today will lead you to lower growth in the future, as well as lower health. Because of pollution, you will have lower health outcomes, which will impact on your human capital and your productivity, and low jobs creation.

Because for political purposes, you need to show that whatever you're doing 20 years down the road is actually going to lead you to better growth, as well as jobs and better human capital outcomes.

Jan van der Made:

A report by the NGO Friends of the Earth published on 25th of May this year, called "The Hidden Flows of Finance to Fossil Fuels: World Bank and IMF edition," charges that the World Bank Group has provided $12 billion in financing to fossil fuels since 2015, calling it the worst actor of all the multilateral development banks. How do you respond to that?

Mari Pangestu:

It's not accurate. We stopped lending to coal back in 2010 and since 2019 we no longer give financing to upstream oil and gas. Maybe what they're talking about is the legacy from the past.

Jan van der Made:

Critics are exemplified by the Swedish teenager Greta Thunberg who summarizes the COP26 proceedings as not much more than "blah blah blah:" empty talk, lots of promises, no results. As a major player of the COP26, what do you do to brush off that image, which is very strong in the media and public opinion?

Mari Pangestu:

We will just say that we are about 'doing' and we are about helping countries to make sure that they can achieve both their climate objectives and their economic growth, jobs, creation and development objectives. And so we are working with many countries to do that.

Jan van der Made:

But what do you think when you see people like Greta Thunberg? Do you think it's useful what they're doing? Do you think it's useful to have a dialog with them [young people], for example?

Mari Pangestu:

Oh, yes, very much so. You can start with ourselves. I don't know whether you're a parent, but I'm a parent and my kids are my conscience. They remind me all the time about what we are not doing right, and I think that Greta is great. She started a youth movement in many countries, encouraging people to be aware and to speak up.

And and I think it's a good reminder to the policymakers, to the politicians about what matters. I read a survey that was basically asking the youth: "what do you care about the most in your future? And it wasn't about having a high paying job or having a successful career. It was about quality of life that was still number one for them.

And I think that that revealed what they cared the most about. They want to be able to live a healthy life and climate change is a big issue in there.

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