FINANCE:

World Bank's climate change envoy steers around hot-button issues

Ask Andrew Steer, the World Bank's new climate change envoy, what he thinks of his institution's controversial recent decision to help build the world's fourth-dirtiest coal plant in South Africa, and he hedges.

"My job is not to give a personal opinion on things," Steer finally says. His thoughts on a sensitive proposal to calculate the environmental and social costs of carbon emissions in all new project assessments? That's for World Bank shareholders to decide, Steer maintains. And to the environmental community's insistence -- lately echoed by Democrats in Congress -- that the bank phase out loans for coal plants altogether, he begs off entirely.

"We are revisiting our strategy for energy lending," Steer said. "Far be it from me to pre-empt that discussion."

But environmental activists who fought the South Africa power plant, are pushing the bank to accept shadow carbon accounting, and are demanding an end to fossil fuel loans say they're not worried by the non-answers. To the contrary, many say they are confident they have an ally in Steer, who recently became the World Bank's first-ever ambassador for climate change and low-carbon development.

Sitting at a table in his office already piled with files and three-ring binders just months into his new job, Steer is, say those who know him, the consummate World Bank insider.

An economist by training, Steer has worked at the World Bank since the 1980s, and has led operations in both Indonesia and Vietnam. He was the chief author of the World Bank's first World Development Report on the environment and is the former head of the bank's environment department. Most recently, he served as policy director at the U.K. Department for International Development (DFID), but he returned to the World Bank's shimmering glass and steel headquarters in Washington, D.C., this year at the request of President Robert Zoellick.

"This is somebody who is experienced and has been successful working within the bank," said Jonathan Lash, president of the World Resources Institute, who has worked with Steer on various issues over the years. Lash described Steer as an "upbeat, energetic pragmatist" who thinks analytically and gets things done.

Bank critic praises him

The praise comes even from fierce critics of the World Bank. Chad Dobson, whose nonprofit organization Bank Information Center routinely lambastes what it considers destructive lending practices, called Steer one of the best environment directors the World Bank has ever had, adding, "he's hard-working, he's smart as can be, and he knows the system."

The creation of a climate change czar at the multinational development bank comes at a critical time. With cap-and-trade legislation stalled in Congress, movement toward an international treaty is, as a result, also at a standstill. Even so, industrialized countries are starting to put up promised funds to help vulnerable nations cope with climate change. The World Bank is poised to take on a significant role in doling out that money, which could amount to $100 billion annually by 2020.

At the same time, many countries insist they are committed to getting on a low-carbon development path. Steer said part of his job is to help nations get there.

"Bob Zoellick realizes that we are at a stage when we have an unusual opportunity. The world does. And things are not necessarily going the way that they ought," Steer told ClimateWire in a recent interview. Still, he said, about 80 percent of countries are now telling the World Bank they want a blueprint for addressing climate change as they develop lending strategies. That's a far cry from the handful that would ask to include some measure of environmental protections a decade ago, he said.

Moreover, Steer said, the interest in climate change is now coming not just from environmental ministers but from heads of agriculture, infrastructure and finance throughout the world.

Steer described his mission as turning the behemoth ship of World Bank bureaucracy to factor in climate change into its development decisions while also working with client countries to make sure that poverty alleviation is mindful of greenhouse gas emissions growth. The World Bank's ability to bend the ear of top leaders and channel large sums of money -- like a $6 billion climate investment fund that Steer will oversee as part of his portfolio -- makes the institution a unique player in climate finance, he argued.

"We do have, I hope, a helpful role to play in the transformation that has to happen throughout the world," he said, adding that he wants to see the World Bank scale up big money for clean energy. The time for demonstration projects, he said, is over.

Working on ties to environmental groups

"We've had enough piloting. We need to be good at something more than that. It's not good enough to simply be able to say there's a great little program in 19 villages," he said. "I think we can move to a lower carbon emissions growth strategy."

At the same time, he insisted that poor countries must continue to have the right to pollute.

"If you're an African country currently emitting 1 ton per person, it's not fair to keep them down there. It's just basic fairness to allow and even expect those countries whose citizens are emitting well below what could be a long-term emission to emit more," he said. "What really matters, whether it's South Africa or whether it's wherever, is that there's a coherent strategy of what's sustainable."

Steer's work with environmental issues dates back to the 1980s, when, he said, he first served in Indonesia for the World Bank. The country's then-environment minister asked for help in strengthening the country's ability to protect the environment. The World Bank's answer: Sorry, we don't do that kind of thing.

"I remember thinking then, that isn't right," Steer recalled, "because it's not a product line; it's a service. It became clear to me that we were missing something. We just didn't get the environmental issue."

He went on to lead the World Bank's first World Development Report on the environment and later to head the bank's new Environment Department.

David Wheeler, a former World Bank researcher who now heads the climate change division of the Center for Global Development, said Steer "assembled a leading edge, state-of-the-art team trying to forge the first of many uneasy coordinations" between the bank and the environmental community.

Cosmetic change?

"It was very controversial at that point," Wheeler said of the flagship report to the 1992 Earth Summit in Rio de Janeiro. "It was one long argument, and he was very good at trying to forge a consensus for change," Wheeler said.

He called Steer a "master of diplomacy," a description echoed by others who have worked with him. Several also said his ability to bridge different interest groups explains his reticence to weigh in publicly on some of touchiest World Bank issues.

But not everyone is confident that the creation of a new high-level position on climate change will spell real change.

In 2009, according to the bank, its lending for fossil fuels was the lowest ever -- about 24 percent of its total energy lending portfolio. Meanwhile, it reported, $3.3 billion, about 40 percent of its energy financing, went toward renewable energy and energy efficiency projects. But environmental activists question how the World Bank calculates its numbers and say the institution isn't doing enough to pull out of the dirty fuels business.

"Is this going to be more than a cosmetic change? Because the bank needs more than a cosmetic change," Karen Orenstein, spokeswoman for Friends of the Earth, said of Steer's job.

Orenstein said the $3.75 billion that the World Bank loaned South Africa this year so it can complete construction of a 4,800-megawatt coal-fired power plant expected to emit 25 million metric tons of CO2 annually will make it one of the institution's highest-ever coal-lending years. And activists are still waiting to see fundamental signs that the World Bank is trying to steer away from coal.

"Just having a good spokesperson when the vast majority of what the bank's doing is not positive in terms of climate is not going to be sufficient," she said. "I just hope that he [Steer] is not going to be greenwash."

Others say they are optimistic. Dobson noted that in addition to creating Steer's position, the World Bank has in recent months changed its energy director and is bringing on a leading expert from the University of California, Berkeley's Renewable and Appropriate Energy Laboratory. Meanwhile, Dobson said he believes the World Bank's new blueprint for energy development will reflect the increasingly strong call from environmentalists and even members of Congress for the bank to shift its lending habits.

"I hope he takes the criticism and articulates it to the bank and makes them change," Dobson said of Steer. "And I'm hoping that we have an energy strategy that gets us out of fossil fuels."