June 25, 1997

WASHINGTON, June 25, 1997, The World Bank today announced a series of initiatives at the United Nations Earth Summit in New York which, it says, could make a real difference in tackling climate change and other threats to the global environment.

Addressing the UN General Assembly, World Bank Group President, James D. Wolfensohn, said the current state of the environment was cause for profound concern and, despite the call to action issued at the last Earth Summit in Rio in 1992, progress had been disappointing.

"Five years ago in Rio, governments from around the world came together and committed themselves to a more equitable and sustainable world. Five years later the picture is very mixed," Mr. Wolfensohn told delegates attending the UN's Special Session on the Environment. "As an institution dedicated to reducing poverty, we at the Bank are more aware than ever of the continuing link between the degrading environment and the poverty still afflicting so many of the world's people. Less than a quarter of the world's people consume three-quarters of its raw materials, while three billion people still live on less than $2 a day. At the global level we have not achieved our objectives."

Noting there was an urgent need for decisive action to protect the environment, Wolfensohn outlined five priorities where the World Bank, in partnership with governments, conservation groups, and the private sector, could make a real difference.

Climate Change

Given that only three OECD countries have so far met their commitments under the Climate Change Convention to scale back on greenhouse gas emissions, the Bank believes there could be greater progress if the Convention would permit "carbon offsets". This innovative measure, the details of which are still evolving, could bring benefits to both developed and developing countries. This would allow countries to collaborate with each other to reduce their carbon emissions, and therefore, speed the flow of money and technology to developing countries while also helping industrialized countries make deeper cuts in their emissions. The Bank would be willing to launch a Carbon Offset Fund if signatories to the Climate Change Convention were interested.

In addition, the World Bank will routinely calculate the potential impact of all its energy projects on climate change and, where there is cause for concern, to assist developing country clients to finance more climate-friendly options.

Arresting the rapid loss of animal and plant life will not succeed unless the marketplace can embrace more green and social values. As a result, the Bank wants to set up strategic partnerships between governments, private companies, development agencies, and community groups to establish markets for goods made in a socially- and environmentally-friendly way. As a first step, Bank President James Wolfensohn is inviting the CEO's of some of the world's leading forest product companies and conservation groups to join together in a campaign to transform the marketplace. Furthermore, the Bank and the World Wildlife Fund are joining forces to conserve and sustainably manage millions of hectares of tropical, temperate, and northern forests to help arrest the rapid depletion of global forestry.

Ozone Depletion

The major bright spot in global environmental efforts is the success of the 1987 Montreal Protocol in phasing out chlorofluorocarbons (CFCs) which damage the ozone layer. However, progress is being undermined by excessive CFC production in Russian and black market smuggling. The Bank, in collaboration with production factories and the Russian government, has developed a plan to eliminate all CFC production in Russia by the year 2000. The World Bank needs international support to find the necessary money to complete this "critical endeavor".

Desertification

Halting the loss of productive land to desert is vital for developing countries to alleviate poverty in their societies and ensure food security. Today, over 40 percent of the world's total land area has been degraded-affecting hundreds of millions of people in more than 100 countries. As the world's biggest financier of projects that try to curb the spread of new desert lands, the Bank says countries must now carry out the terms of the Desertification Convention which they ratified last year, and that the Bank stands ready to do its part in encouraging and financing better agricultural and land management practices.

Water

Supplies of clean water are reaching dangerously low levels in many regions of the world. At least 20 countries today have problems with their water supplies. By 2020, that number will double. Developing countries will need to invest approximately $600 billion over the next decade to stave off a water crisis, of which the Bank expects to lend about $35 billion during this period. The Bank salutes the creation of the Global Water Partnership in 1996 and is committed to making it work.

New Money for the Global Environment Facility (GEF)

To deal with the global environmental issues of climate change, the loss of biodiversity, ozone depletion, and international water pollution, the Bank says the GEF must be generously replenished with new money this year to allow it to continue its vital work of financing environmental projects in developing countries.

In his concluding remarks to the General Assembly, World Bank President James Wolfensohn said that environmental problems are seriously threatening the long-term development of many of the Bank's client countries, with the poor invariably paying the highest price.

"These are not fringe activities. They are central to meeting human needs and reducing poverty," Wolfensohn said. "I wholeheartedly commit the Bank to do all it can to forge a global partnership to promote equitable approaches to global environmental issues, and to do so quickly. Time is not on our side. This agenda cannot afford to wait."

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