The United States has issued a powerful demand for the World Bank to abandon its climate change obsession and return to its fundamental mission of ending global poverty. This dramatic intervention comes as world leaders gather for the COP30 climate summit in Brazil.
US Challenges World Bank's Climate Focus
US Treasury Secretary Scott Bessent has called on the international financial institution to remove its commitment to direct 45% of financing toward climate projects. Instead, Bessent argues the Bank should concentrate on investments that increase access to affordable and reliable energy, reduce poverty, and boost growth.
The World Bank, originally established to rebuild Europe after World War Two, later took on the mission of lifting people out of poverty. However, following the 2015 Paris Climate Agreement, the institution dramatically shifted direction, committing billions to climate initiatives and positioning itself as a leader in green financing.
Last year alone, the Bank poured $42.6 billion into climate projects - money that critics argue could have been directed toward more immediate human needs.
Development Versus Climate Spending
Research consistently demonstrates that traditional development investments deliver substantially greater and faster benefits than climate spending. Core initiatives like improving maternal health, advancing e-learning, and enhancing agricultural yields provide more impactful results for the world's poorest communities.
World Bank president Ajay Banga has defended the climate targets, arguing that poverty and climate should be addressed together. However, this approach faces growing scepticism. Addressing poverty through nutrition, health and education can rapidly improve lives for hundreds of millions at relatively low cost, while climate-focused poverty reduction shows minimal impact even by the end of the century.
Meanwhile, climate policy costs frequently reach into the trillions while potentially harming vulnerable populations through increased fertilizer and energy costs.
Energy Access Critical for Development
As Secretary Bessent emphasised, developing nations require cheap, reliable energy to industrialise, create jobs and achieve prosperity - mirroring the development path taken by wealthy nations and China in recent decades.
The statistics reveal stark energy inequalities: the average poor African uses as much fossil fuel in an entire year as an American consumes in less than nine days. Most of Africa remains in poverty with limited access to energy beyond wood and hydro power.
The World Bank's Mission 300 initiative aims to connect 300 million more Africans to electricity by 2030. However, this worthy goal risks being undermined by an inflexible focus on renewables that may not provide the reliable, affordable power developing economies require.
While solar and wind power can be cost-effective when conditions are right, they require extensive backup systems that drive up costs. This reality explains why wealthy nations, despite their environmental rhetoric, still obtain more than three-quarters of their energy from fossil fuels.
Evidence from the ground confirms this preference for reliable energy. Last year, Africa added five kWhs of electricity per person from solar and wind, but added nearly five times more from fossil fuels because they're cheaper and more dependable.
The UK recently voted to support the World Bank's high climate spending, but faces pressure to reconsider this position in light of the American intervention and mounting evidence about what truly helps the world's most vulnerable people.
Bjorn Lomborg, President of the Copenhagen Consensus and author of "False Alarm" and "Best Things First", argues that raiding development funds for climate initiatives represents more than just poor policy - it constitutes an affront to human suffering that demands immediate correction.
