Can the World Bank fit climate under its tightened belt?

From: POLITICO's The Long Game - Friday Apr 14,2023 04:01 pm

Apr 14, 2023

THE WEEK THAT WAS

Ajay Banga speaks.

Incoming World Bank President Ajay Banga will bring fresh blood, but maybe not a cash infusion. | Win McNamee/Getty Images

BANKING ON THE FUTURE — U.S. Treasury Secretary Janet Yellen and other top financial officials are vowing to reshape the World Bank to make it a leader in the battle against climate change.

They just don't want to pay for it — at least not yet, as Zack Colman and Ben White report.

There's a clear tension in talks at the bank's spring meeting this week between the need to spend more and the desire not to inflame debt and deficit concerns within shareholder countries. And if the bank can't spend more, the money for climate will need to come from somewhere — potentially from poverty-fighting dollars for poor nations.

Yellen said Tuesday that "we are responsibly stretching [the bank's] balance sheet to deliver up to an additional $50 billion of lending over the next decade." She has also called for significant contributions from the private sector.

But the World Bank’s development committee said it won't be enough to meet "the vast needs of client countries,” even with greater domestic and private resources. The debate over the bank's future illustrates how even governments that view climate change as an existential threat are reluctant to pay the steep price of confronting the danger.

“The conversation about stretching the balance sheet without an additional infusion of resources — I don't see that as a game-changer,” said Jonathan Walters, a former Middle East and North Africa director at the World Bank. "It won't send a strong enough signal to staff, and more importantly it won't send a strong enough signal to developing countries.”

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BUILDING BLOCKS

CAR TALK — The Biden administration just upped the ante on Wednesday with new tailpipe emissions standards for cars, light trucks and vans that will drive even more EV production.

This is a very big deal, potentially:

If Wednesday’s proposals work out the way President Joe Biden’s regulators envision, two of every three new cars and light trucks sold in the U.S. in 2032 will be electric — more than 10 times the current national sales rate, Alex Guillen writes. (Still, California's targets go further: They envision 100 percent new-car sales being zero-emission by 2035.)

And the demand is there, analysts say.

"There's a huge amount of pent-up demand for EVs right now, and automakers aren't delivering," Chris Harto, a senior policy analyst at Consumer Reports, told POLITICO's E&E News' Mike Lee and David Ferris.

But prices have to come down, too. “The challenge is that as of now, the vehicles aren’t affordable enough that there’ll be a big enough buying base for them to be bought in these numbers,” said John Gartner, who leads EV and charging infrastructure research at the California nonprofit Center for Sustainable Energy.

What's next: We'll see how these new rules intersect with the Inflation Reduction Act's tax credits for domestically produced EVs, which the Treasury Department released guidance for last week. By Tuesday, automakers are supposed to confirm which of their models meet the new Treasury requirements, Alex writes. (They’ll have to swear this under penalty of perjury.)

Only five of the 91 EVs on the market qualify for the full $7,500 tax credit so far, Tanya Snyder reported last week.

The ball is in the automakers' court, basically, Mike and David write.

Automakers are being circumspect: "The question isn't can this be done, it's how fast it can be done," John Bozzella, president and CEO of the Alliance for Automotive Innovation, said in a statement. "[H]ow fast will depend almost exclusively on having the right policies and market conditions in place to achieve the shared goal of a net zero carbon automotive future."

WASHINGTON WATCH

TREE COVER — The Biden administration is pouring a billion dollars from the Inflation Reduction Act into urban trees, Marc Heller reports for POLITICO's E&E News.

The program massively boosts the Forest Service's budget for urban and community forestry — it was $36 million in fiscal 2022. “Put simply, community forests are a fundamental asset to sustainable society," the National Association of State Foresters said.

AROUND THE WORLD

SKI BUMMER — The ski season in Europe may be coming to a close, but the chemicals left behind by skiers and snowboarders could remain on the Alps forever, Leonie Cater writes.

Five E.U. countries are calling for a ban on per- and polyfluoroalkyl chemicals in all consumer products, including fluorinated ski wax, which contains dangerous "forever chemicals" that have been found in ski waxers' blood in concentrations up to 25 times as much as the general population.

The International Ski Federation and International Biathlon Union have announced a ban on the use of fluorinated ski wax — but have postponed fully implementing it several times in the absence of fail-proof, real-time testing technology.

YOU TELL US

MAILBAG REQUEST — Do you know of large buildings (residential or government) constructed within the past decade that have needed significant repairs due to weather-related flooding or storm damage? Help us investigate the impact of climate change by telling us the addresses – email our E&E News reporter Corbin Hiar at chiar@eenews.net.

GAME ON — Happy Friday! Welcome to the Long Game, where we tell you about the latest on efforts to shape our future. We deliver data-driven storytelling, compelling interviews with industry and political leaders, and news Tuesday through Friday to keep you in the loop on sustainability.

Team Sustainability is editor Greg Mott, deputy editor Debra Kahn, and reporters Jordan Wolman and Allison Prang. Reach us at gmott@politico.com, dkahn@politico.com, jwolman@politico.com and aprang@politico.com.

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WHAT WE'RE CLICKING

— An Italian energy company is planning to seek U.S. government subsidies to double the number of fast chargers for electric vehicles along America's highways, the Wall Street Journal reports.

— A climate tech startup has raised $18 million to scale up its business of installing small turbines in irrigation canals to produce carbon-free electric power. The Associated Press has that story.

— New research adds fuel to concerns that while wind farms may be good for fighting global warming, they're not so good for the birds. Bloomberg has details on those findings.

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