In a move sure to be celebrated by opponents of fossil fuel-based energy, the World Bank has just made a huge announcement at the One Planet summit called by French President Emmanuel Macron. The bank, which provides loans to developing countries to foster economic growth, announced on December 12 that it will no longer offer financial support for oil and gas exploration after 2019.
During the summit, the bank released a statement saying it “will no longer finance upstream oil and gas,” citing a need to change in a “rapidly changing world.” In 2015, the bank previously vowed to have 28% of its portfolio dedicated to climate action by 2020. The bank’s latest statement on fossil fuel financing suggests that it is on course to achieve that goal.
This is yet another blow to the fossil fuel energy industry, and a seemingly significant win for environmental advocates. The economics surrounding the energy sector are increasingly making it more attractive for entities to switch to renewable energy. Across the world, it has become cheaper to build new renewable energy installations than to operate and maintain existing coal power plants.
The World Bank’s plan does lay out a caveat for “exceptional circumstances,” saying that they will consider “…financing upstream gas in the poorest countries where there is a clear benefit in terms of energy access for the poor and the project fits within the countries’ Paris Agreement commitments.”
The Paris agreement is a major factor in the decision. The One Earth summit was planned on the two-year anniversary of the historic agreement, which was looking uncertain after the President of the United States, one of the major financial and influential member nations, decided to withdraw. Even so, the agreement looks to be thriving, even in the US, which may reach the goals laid out in Paris against all odds.