Congress of the United States
House of Representatives
December 3, 1999

Dennis J. Kucinich
10th District, Ohio
_______________
17230 Longworth Office Building
Washington DC 20515
(202)225-5871
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14400 Detroit Avenue
Longwood Ohio 44102
(216)228-8850

Mr. James Wolfensohn
President
World Bank Group
1818 H Street, NW
Washington, D.C. 20433
Dear Mr. Wolfensohn:

I am writing to express my concern over the World Bank's role in investing in carbon-intensive energy projects around the world. Recent studies suggest that the World Bank has spent over $13 billion on fossil fuels since the 1992 Earth Summit. Simultaneously, the World Bank and the Global Environmental Facility (GEF) are not doing nearly enough to jump-start the market in climate-friendly renewable forms of energy. Instead, the Bank is spending 25 times as much on fossil fuels as it and the GEF are on renewables and energy efficiency programs. In the last year alone, these studies show, the World Bank spent over $1.3 billion on coal-fired power projects in China alone.

A year ago, at the Earth Summit 11 in New York, you pledged to begin to calculate greenhouse gas emissions associated with World Bank lending, and where there was cause for concern, explore other, more climate-friendly options. This pledge was welcomed as a good faith gesture at creating transparency and accountability within the Bank. Yet the World Bank's own OED review, conducted shortly after your speech, found that despite an operational directive to do so, this process was taking place less than half the time - and only for power projects, not for oil and gas reserves and coal mines the Bank helps open up for exploitation. We must have total transparency around all power, energy and transportation sector projects - with full greenhouse gas emissions assessed and made public at least 120 days in Board approval, in adherence with the Pelosi Amendment - as a first step in building transparency, accountability, and a reduction in the carbon-intensity of World Bank lending. This is the sentiment of the G-8 leaders, who instructed the World Bank and the other international financial institutions "to take full account of climate change" in their May 1998 communiqué.

I am alarmed to learn that, despite a lack of transparency around its own investments in fossil fuels, the World Bank is now preparing to "jump-start" the market in carbon globally, over protestations from the NGO community as well as from the US Treasury and State Departments. There is widespread concern that this new activity poses a serious conflict of interest for an institution already overwhelmingly invested in fossil fuels. In addition, I am concerned that this proposed "Prototype Carbon Fund" will distract your staff from the much more expedient effort to "green" your own energy portfolios, and will provide them with incentives to continue to invest in fossil fuels in developing countries.

The World Bank's Executive Directors discussed their energy and environment strategy, a document entitled "Fuel for Thought, A New Environmental Strategy for the Energy Sector," on November 24. At the urging of numerous parties, they have agreed to a delay in approval of this strategy.

Before this document is approved, I urge the World Bank to upgrade its energy policies so that they become more binding Operational Directives rather than non-compulsory Good Practices. These policies should be strengthened in keeping with your goals of investing in climate-friendly activities in developing countries, with the strategy for implementing the binding policies reflected in the final version of the Energy and Environment Strategy,

I also support a clearly measurable target for renewable energy lending to help push the global energy market toward renewable forms of energy in countries where the need for energy services is great. As your own rural energy strategy documents, renewable energy systems are the best, most economical way of reaching the poorest two billion who are currently without access to any form of energy other than biomass. Focusing World Bank lending on creative approaches to solving problems such as these - which would serve the dual purpose of providing markets for US renewable industries' products overseas while lowering the price of renewables globally - is the sort of leadership we need from you.

Finally, the Byrd-Hagel Senate Resolution calls on the US to take no action under the Kyoto Protocol domestically until key developing countries, including China and India, are also participating in the Protocol in a meaningful way. As the single greatest contributor to the World Bank, the US has a duty to ensure that we are not working at cross-purposes with our own goals. I believe we can best meet the terms of the Byrd-Hagel Resolution without stalling the Kyoto process, by leading developing countries down the road toward meaningful participation with as many incentives as possible - key among them, using our development dollars to invest in renewable forms of energy and energy efficiency,

I would like to set up a meeting in the coming weeks to discuss these and other matters of pressing concern, I look forward to discussing these issues with you in person.

Sincerely,

Dennis J. Kucinich
Member of Congress