TL: WORLD BANK: CHEMICAL GIANTS AND THE OZONE LAYER SO: Greenpeace International (GP) DT: September, 1994 FACTSHEET #4 ============= THE WORLD BANK, CHEMICAL GIANTS AND THE OZONE LAYER The World Bank controls the money for the Montreal Protocol on Substances that Deplete the Ozone Layer, which is supposed to help developing countries switch to ozone-friendly alternatives. However, the Bank has turned this into a profit engine for chemical companies. While many countries are switching to safer and cheaper alternatives, the Bank drags its feet and overwhelmingly supports the transnational chemical companies. The British Antarctic Survey states that if ozone continues to disappear over the Antarctic at the same rate as it is now, there will be none left in October 2005. While production of CFCs has been curtailed, the levels of CFCs in the upper atmosphere are still increasing, so things will get worse before the effect of the current cuts are felt. Alternatives exist. Greenpeace, along with an East German company, developed a domestic refrigerator which runs on butane as a coolant and cyclopentane in the insulation foam. The "Greenfreeze" has now been taken up by major manufacturers Bosch- Siemens, Liebherr, Electrolux, and Matsushita. The World Bank has approved this technology as a viable alternative, yet out of 176 projects only one takes this route. Instead, the Bank prefers to fund projects using the ozone-destroying HCFCs and global warming HFCs put up by chemical giants like ICI, Du Pont and Atochem. THE WORLD BANK AND OZONE DEPLETION BY NUMBERS * Total developing country use of ozone depleting substances (1991)- 150,000 tonnes a year * Percentage increase in developing country use of ozone depleting substances (1986-1991) - 54% * Total funds allocated to date for the Montreal Protocol implementing agencies - US$152.1 million * Amount of Montreal Protocol funds allocated to the World Bank - US$92.2 million * Number of projects administered by the Bank - 176 * Percentage of Montreal Protocol funds administered by the Bank - 60.6% * Percentage of funds allocated to the Bank that have been disbursed - 6.2% * Total tons of Ozone Destroying Substances (ODS) phased out to date - 951 * Tons of ODS phased out to date by the Bank - 245 * Tons of ODS to be phased out by Bank projects approved to date: 21,434 * Percentage of Bank's approved ODS phase-out that has actually been phased out - 0.011% * Percentage of Bank's phase-out to date accomplished by using "reduced CFC" technology - 81% * Percentage of all agency project funding slated for HCFCs and HFCs - at least 60% * Funds allocated to Bank for refrigeration and foam sector projects - US$48.3 million * Refrigeration and foam projects, as percentage of total Bank Montreal Protocol projects - 52% * Percentage of Bank refrigeration and foam sector projects that fund chemical company alternatives - 94.4% * Number of Bank projects that use "greenfreeze" technology - 1 * Number of Ozone Operations Resource Group (OORG: the Bank's technical advisory body) sector chairs: 7 * Percentage of OORG sector chairs with strong ties to chemical companies: 100 * Number of OORG sector chairs now employed by ICI - 2 ============================================================== THE WORLD BANK AND CLIMATE CHANGE Climate change directly threatens forests, agriculture, fisheries, and human health. Recognizing the grave threat that global climate change poses to development, 167 nations signed the Framework Convention on Climate Change at the 1992 Earth Summit in Rio de Janeiro. The treaty commits all signatory governments to stabilize worldwide greenhouse gas emissions. Almost all of the signatories are members of the World Bank. The World Bank will administer the Convention funds through the Global Environment Facility (GEF), to assist developing countries in developing and financing energy projects that reduce carbon dioxicd (CO2) emissions and therefore combat global climate change. The main source of CO2 is from fossil fuels such as coal, oil and gas. Throughout the entire negotiation process for the Climate Convention, developing countries opposed the World Bank administration of the GEF because of its previous record. This opposition continues. Greenpeace believes that the World Bank's responsibilities under the Climate Convention to cut CO2 cannot be carried out unless the same policies are applied to the rest of its work. The World Bank continues to fund almost exclusively fossil fuel energy projects, even with the knowledge that it will add to the global increase in CO2 emissions. Only 1.4% of all Bank energy lending now goes to renewable energy sources, and as little as 0.8% finances energy efficiency on the consumer side. Huge energy saving potentials in developing countries remain untapped. The largescale coal, oil, and dam projects financed by the World Bank for over 30 years have had tremendous social and environmental impacts, not only in the sphere of climate change. Millions of people's lives and culture have been completely disrupted, and entire ecosystems have been destroyed. Whole sector loans do not even receive Environmental Impact Assessments. CASE STUDY IN INDIA In 1993, the World Bank approved a $US 400 million loan to India's National Thermal Power Corporation (NTPC) for coalfired power expansion in the Singrauli region in eastern central India. Over the next ten years, the Bank intends to finance, with US$1.2 billion, the construction of 15 new coalfired power plants and two gasfired power plants. This will be the single biggest new source of greenhouse gas emissions on earth. India's coal-fired power plant expansions will produce an annual minimum 100 million tonnes of CO2. The impacts of this loan on global climate change and the social impacts on the affected people in India, were simply not considered. Around 51,000 Singrauli citizens have been uprooted in the Singrauli area because of Bank projects. Many of the mostly poor tribal families have been displaced several times. Future coal loans will displace more. Already Singrauli coal mining has turned the area into a moonlike landscape, drinking water is polluted and there are widespread health problems on the local people who are now entirely dependent on NTPC and the national coal company. Ironically, about 60% of the regions' inhabitants do not have electricity in their homes. Greenpeace Demands * the World Bank must adopt a CO2 reduction policy, requiring energy lending to be based on comprehensive lowest cost energy plans, and including social and environmental costs in sector and project evaluations. ============================================================ Financing Forest Destruction World Bank Forest Policy In response to heightened global attention to rainforests and pressure brought to bear by non-governmental organizations from around the world, the World Bank adopted a new Forest Policy in 1991. The new policy looked good on paper, including the environmentally appropriate terms "participation,", "sustainability," and "conservation," and prohibited the Bank from directly financing logging in primary moist tropical forests. With this new policy, the World Bank attempted to wipe clean its past record of forestry debacles which have caused the destruction of an estimated 1,900,000 square kilometres of forest including: * 1982 - Carajas Iron Ore Project in Brazil. The financing of a mine, a 780 km railway, and a deep water seaport, destroyed 150,000 square kilometers of Brazil's tropical rainforests. * 1982 - Trans-Amazon highway project in Brazil. The loan unsuccessfully attempted to construct a highway across the Amazon, and ended up ended destroying 23.7% of forest in the state of Rondonia and forcibly relocating 250,000 people. The Bank then came up with a project, Planafloro, to repair the damage to forests and biodiversity in the region, But local NGOs catalogued repeated instances of ineffective policies and staff and lack of participation of affected communities. Even worse, in one case the Bank was discovered of having invented fake NGOs and rubber tapper unions in an attempt to cover up its lack of compliance with its own consultation policy. Global Environment Facility (GEF) and the Biodiversity Convention At the 1992 Earth Summit, where the Biodiversity Convention was signed, the World Bank was given the mandate to use the GEF to fund protection of forest biodiversity. But recent history has shown a considerable number of GEF biodiversity projects failing. One example among many: * The Congo Wildlands Protection and Management Project. An independent report revealed the project was tied to a $20 million World Bank loan for logging in primary tropical forests - a breach of both the policies of the GEF as well as the World Bank's own ban on logging in tropical forests. During 1994, the World Bank reviewed its new Forest Policy, which is fatally flawed. The following examples show why: Failure to address cross sector effects (effects on forests from other, non-forestry sector loans eg deforestation due to a hydro electric project). * Arun Dam in Nepal. This World Bank project, scheduled for approval in October 1994, will impact one of the last virgin rainforests in the Himalayas. Due to road building and current logging, local NGOs state that total deforestation will likely occur in 15 years or less. * 1968-1973 - A series of land settlement loans for Malaysia financed the deforestation of 253,000 acres of rainforest on the Malaysian peninsula Failure to protect temperate and boreal forests * 1994 - Belarus Forestry Development Project. This would increase exports of timber by 800%. 20% of Belarus' forests are fragile wetlands and another 20% of the forest cover is contaminated by fallout from the Chernobyl nuclear plant. Adequate environmental studies and community consultations were not conducted. In early 1994 the Bank came under attack for other forest sector loans -- one in Laos and the other in Ecuador. The Ecuador loan would fund a plantation project run by a rich family, and would dislocate the indigenous Chachi people. The bank was forced to withdraw funding. Flawed approach to plantations. Plantations, rather than meeting the needs of local communities, are only aimed at guaranteeing supply of cheap pulp for industry and threaten the subsistence economies of local communities. The FAO has stated that planatation yields are often as much as 50 % below inital expectations. Single species plantations do not allow for biodiversity of flora or fauna. But in spite of the high degree of failure of forest plantations throughout the World, the World Bank has paid out USD 1,416 million to fund plantations in the past two years and in the past ten years has financed the establishment of over 2.9 million hectares of forest plantations. But the Bank still plans to fund the establishment of over 1 million hectares of plantations. Greenpeace's Demands 1) The World Bank must be held accountable for its responsibilities under the Biodiversity Convention. 2) The current World Bank ban on funding logging in primary tropical rainforests must be reconfirmed and extended to all primary forests. 3) The World Bank must implement a "precautionary principle" approach to all projects that may impact forests and biodiversity. Where there is a threat of reduction or loss of biological diversity or other irreversible environmental impacts, forest planning should err on the side of caution. =============================================================== THE ROLE OF SPAIN IN THE GLOBAL ENVIRONMENTAL CRISIS Theoretically, Spain supports international conventions on climate change, ozone layer protection and conservation of biodiversity. In practice, however, applied policies tell a different story: the Spanish Government intends to increase CO2 emissions to the atmosphere; multinational Atochem continues to produce ozone-depleting CFC's in Spain and this country plays a major role in forest destruction, both within its own boundaries and in the tropical areas of the world. Reduction of CO2 emissions: Let others do the work! While recognising the need to globally reduce carbon dioxide emissions and admitting to the serious extent of climate change and its consequences (temperature rise, reduced rainfall and soil humidity, beach erosion, desertification, proliferation of storms and forest fires), the Spanish Government intends to increase its CO2 emissions by 25% in the year 2000. Thermal power plants will be a major contributor to the emission increase. Over 20 projects for new construction or expansion currently exist, failing to consider the low rise in energy demand (0.2% in 1993) and the high potential for energy saving (50%) and use of renewable energy sources in Spain. Greenpeace has denounced the European Commission at the European Court of Justice in Luxembourg, for having used EC funds to illegally finance the construction of two new thermal power plants in the Canary Islands, thus violating EC legislation concerning CO2 emissions. Ozone Layer Depletion French multinational Elf Atochem still produces CFC's in Spain, and far from reducing its production, it was increased in 1993 after the company transferred its production capacity from France to Spain, in breach of European Union legislation. Elf Atochem also produces HCFC's. Meanwhile, Electrolux in Spain is using "Greenfreeze" technology to build refrigerators which are sold only in Germany. Deforestation Spain has some of the world's highest forest destruction rates and ranks tenth with respect to tropical timber imports, from countries such as Ivory Coast, Cameroon, Brazil, Paraguay and the Philippines with very high deforestation levels. Between 1988 and 1993, Spain imported 1.8 million tonnes from Africa, 171,128 tonnes from Asia and 278,604 tonnes from Latin America, as well as 111,572 tonnes of tropical timber via other European countries. Within Spanish boundaries, forest destruction is continually rising. A major contributor are forest fires. This summer, over 350,000 hectares have been destroyed in an accelerating spiral of fires, most of them deliberate. Plantations of eucalyptus and pine-tree for paper mills have replaced large expanses of indigenous forests. Finally, a large number of dams and reservoirs will be built under the National Water Plan, that will flood the few remaining riparian forests and thus destroy the role that they play in water saving and rational use of resources..