European Public Banks Accept World Commission on Dams Recommendations
Berkeley, California – The two biggest public banks in Europe, the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), have announced that they will take into account the international standards for dam-building set by the World Commission on Dams (WCD).
"We welcome the decision of the two biggest public banks in Europe to join the growing number of institutions worldwide that take seriously the World Commission on Dams‚ recommendations," says Ann Kathrin Schneider, Policy Analyst for International Rivers.
The EIB has told International Rivers that it will "align to" the recommendations of the WCD for any large dams from which it sources carbon credits. The EBRD has told International Rivers that any large hydro projects from which it sources carbon credits "will have been considered in relation to the WCD criteria and guidelines." However, neither of the institutions have translated these verbal commitments into binding obligations. The statements are not yet mandatory policies and are not reflected in the environmental policies of the institutions.
In contrast to the EIB and EBRD, the World Bank is continuing to disregard the recommendations of the WCD, despite being one of the Commission's two original co-sponsors. The World Bank has so far refused to confirm to International Rivers that they will respect the WCD in developing carbon trading hydro projects.
The European Investment Bank, the European Bank for Reconstruction and Development and the World Bank are planning to increase their roles as brokers of carbon credits under the Kyoto Protocol's Clean Development Mechanism (CDM). They are establishing an EBRD-EIB Multilateral Carbon Credit Fund and a WB-EIB Carbon Fund for Europe to buy CDM credits. These credits would be used to help European countries meet their emission reduction targets under the Kyoto Protocol.
The EU "Linking Directive" states that carbon credits from large hydropower projects can only enter the EU's Emission Trading System if they respect the recommendations of the World Commission on Dams.
"It is disgraceful that the World Bank seems determined to flaunt European law. The World Bank has to wake up to the fact that applying the standards of the World Commission on Dams is steadily becoming the norm," says Ann Kathrin Schneider.
Notes: An EU directive regulating the admission of CDM credits into the EU's emissions trading system states: "In the case of hydroelectric power production project activities with a generating capacity exceeding 20MW, Member States shall, when approving such project activities, ensure that relevant international criteria and guidelines, including those contained in the World Commission on Dams year 2000 Final Report, will be respected during the development of such project activities."
- Read a letter to the World Bank concerning WCD and carbon financing
- Read the response to the letter
- Read a EIB response to a similar letter (PDF)