World Bank overstated environment money 

The World Bank overstated its commitment to environmental projects since 1990, possibly by billions of dollars, an internal watchdog group reported.

The bank's official estimate for commitments to programs specifically aimed at helping the environment is $59 billion from fiscal 1990 to 2007, according to the Independent Evaluation Group.

But the watchdog group, established by the bank to monitor its activities, found only $18.2 billion allocated by the poverty-fighting institution went to projects deemed to be at least 80% environmental in nature. The rest of the $59 billion went to projects with a smaller environmental component.

The $59 billion figure "appears to overstate the actual volume of resources going directly for environmental improvement," the group's report said.

"Because of the way (World) Bank commitments are identified, it is unclear exactly how much lending has gone directly for environmental improvement. But the priority given to lending for ENRM (environment and natural resource management) appears to be modest," the report said.

Bank officials disputed this and maintained that investment in environmental projects is being underestimated due to a subjective but internationally accepted coding system that is also used by the United Nations.

Over the past decade the World Bank has increasingly focused on the impact to the environment by development projects funded by the institution in the developing world, including in emerging superpowers China and India.

Recently, rich donor countries tasked the World Bank with developing a plan and overseeing billions of dollars in funds to accelerate investment in new clean air technologies and to help poorer countries adapt to climate change.

Guesstimate

"It has to do with the way these (environmental) commitments are assigned," said John Redwood, one of the report's authors. "And essentially the way these commitments are estimated is a guesstimate."

Specific investments in environmental quality could be "substantially lower" than these estimates, Redwood said in a telephone interview. "But we're not sure, because it's just the way the commitments are estimated ... This was one of our great frustrations."

Laura Tuck, the bank's director for sustainable development in Latin America and the Caribbean, took issue with the watchdog report on this point but acknowledged that the coding system can under-represent environmental commitments.

"We believe that a huge amount of our environmental impact, particularly in the last three to four years, is not captured in the official bank statistics," Tuck said by telephone.

This is because the bank's projects are divided into sectors - such as sanitation, transportation, infrastructure - but also into themes, including the environment. The coding system does not allow more than one code for each expenditure, Tuck said.

Projects that achieve more than one aim - such as an urban transport program that uses new technology that cuts greenhouse gas emissions - are more likely to be classified under their sector than as an environmental project, Tuck said.

Asked whether the bank plans to fix this coding system, Tuck said, "I think it will take time but I think there is an understanding at the bank that it needs to change."

Korinna Horta of the nongovernmental group Environmental Defense Fund said the watchdog report shows the bank does a poor job of monitoring and evaluating the environmental impact of the programs it supports.

"The bank does not have an appropriate accountability structure in place to ensure that its well-meaning environmental and social policies are actually implemented on the ground," Horta said in a statement.