The World Bank Is Getting a New Chief. Will He Pivot Toward Climate Action?

The World Bank has long been an institution devoted to economic development, poverty reduction, and financial stability. As the world changes, and the threats to the global economy become increasingly complex, the World Bank has found that it needs to adapt and change its focus. With the current challenges presented by climate change, the question arises: Will the World Bank pivot toward climate action with its new Chief?

On September 1, 2021, former investment banker and development economist, David Malpass, began his second five-year term as the President of the World Bank. During his first term, Malpass initiated reforms to the bank’s lending practices and its internal workings, which many critics saw as unwieldy and bureaucratic. His reforms changed the bank’s focus from large, general development loans to more targeted, smaller-scale investments.

The changes that were put in place during Malpass’s first term were not without controversy or criticism. Some experts argued they went too far, cutting back on environmental and social protections, and that the old-style lending practices were more effective. But, Malpass argued that the traditional approach to development had not been working, and that targeted, specific lending would lead to better results.

Now, with his second term, the question arises: will Malpass pivot his focus towards climate action?

The answer to that question is not clear. During his first term, Malpass was criticized for not taking climate change seriously enough. He questioned the science behind climate change and raised concerns about the costs associated with implementing policies to address it.

However, since then, Malpass has indicated a growing awareness of the need to address climate change. In March of 2021, he delivered a speech at the Climate Adaptation Summit, where he acknowledged the threat of climate change to the world’s poorest people and committed the World Bank to increasing its lending for climate adaptation.

The World Bank has also announced that it will no longer finance oil and gas exploration, and that it will increase its financing for renewable energy. These moves represent a significant shift in the bank’s approach to climate change, signaling a growing commitment to action.

However, there are still concerns that Malpass may not be committed enough to climate action. He has not made any commitments to phasing out financing for fossil fuel projects, which many climate experts see as necessary if the world is to transition to a low-carbon economy. Additionally, he is widely seen as a supporter of President Donald Trump, who was widely criticized for his climate policy.

There are also concerns that Malpass’s approach to development may not be compatible with tackling climate change. Critics argue that his focus on market-driven solutions may not be able to address the systemic changes necessary to mitigate and adapt to climate change.

Overall, it is still not clear whether Malpass will pivot towards climate action. While there have been some positive signals from the World Bank, there are still concerns about Malpass’s commitment to the issue. The World Bank is an important institution, and its leadership is critical to addressing the challenges of climate change. It is therefore important to watch how Malpass’s term progresses and to hold him accountable for his commitments.

One of the key challenges facing Malpass and the World Bank is how to balance short-term economic growth with long-term sustainability. The traditional approach to development has been to focus on economic growth at all costs, with little consideration for environmental or social impacts. This approach has led to significant economic growth, but also to widespread environmental degradation and social inequality.

To address this challenge, the World Bank will need to develop a new approach that sees economic growth and sustainability as interdependent goals. This will require significant investments in renewable energy, green infrastructure, and sustainable agriculture, as well as social safety nets to ensure that the poorest are not left behind.

Overall, the World Bank’s pivot towards climate action will be a complex and challenging process. It will require significant changes in its lending practices, its approach to development, and its internal culture. It will also require leadership that is committed to the issue and willing to take bold action.

As Malpass begins his second term as President, the world will be watching to see if he is up to the challenge. While there are concerns about his commitment to climate action, there are also signs that he may be moving in the right direction. The coming years will be critical for the future of the world, and the World Bank’s role will be central in shaping that future.