IPS
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Press Release

For Immediate Release

Aid Money Ensures Unprecedented Fossil Fuel Consumption in Developing, EIT Countries

These reports are available in English, German, Italian, and Japanese on the World Wide Web at the following website:
http://www.igc.org/ifps/publicat/wb-g7-report and
http://www.igc.org/ifps/publicat/EBRD-REPORT

For further information, contact:
Daphne Wysham, in Kyoto: 010-155-9100
Ophelia Cowell, The Netherlands: 31-653-4334-52,
Francesco Martone, Italy: 39-6244-04212
Jim Vallette, U.S.: 207-244-3106

December 5, 1997, Kyoto, -At the same time as it urges developing countries to cut its greenhouse gas emissions, the U.S and other rich countries are spending billions of taxpayers dollars ensuring that developing countries and economies in transition burn billions of tons of fossil fuels. The U.S. is the largest donor to both the World Bank and the European Bank for Reconstruction and Development (EBRD); investments made by these two multilateral development banks, together with other aid agencies, are playing a significant role in fueling climate change, according to two studies released at the Conference of the Parties in Kyoto today.

Among the key findings included in two new reports by the Washington, DC-based Institute for Policy Studies and the International Trade Information Service, "The World Bank and the G-7: Changing the Earth's Climate for Business," and "The EBRD: Fueling Climate Change," are:

*The World Bank has funded $9.4 billion in coal, oil, and gas projects since the 1992 Earth Summit. These same projects will, over their lifetimes, release 9.5 billion tons of carbon-about 1.5 times global fossil fuel emissions for 1995.
*The EBRD has funded over $1 billion in fossil fuel projects since its inception in 1991. These projects will eventually release at least 1.4 billion tons of carbon-about 22% of annual fossil fuel emissions for 1995.
* Although earmarked for development assistance and poverty relief, 9 out of 10 World Bank fossil fuel investments end up enriching multinational corporations based in the G-7 countries.

Reacting to the disastrous consequences of fossil fuel developments on vulnerable communities in the poorer nations, more than 200 non-governmental organizations from around the world released a Declaration in Kyoto demanding measures that will help end fossil fuel addiction while meeting the energy needs of the world's poorest 2 billion people.

Meanwhile, the World Bank unveiled its Global Carbon Initiative at the Kyoto conference, which proposes that the World Bank act as a "middleman" in an emissions trading scheme between industries in countries like the U.S. and industries in the economies in transition (EITs). The World Bank projects that it will net about $100 million per year in commissions from this emissions trading scheme. It hopes to eventually extend this scheme to developing countries. Yet, the IPS study found that the World Bank invests 100 times more money on climate changing activity than on projects which theoretically avert climate change.

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