UK’s Brown at Davos: A World Bank for the Environment?

What is just another typical week for us average world citizens is, for some 2,000 policymakers, academics, celebrities and religious leaders, an exclusive working vacation in the Swiss Alps. The annual meeting of the World Economic Forum began on Wednesday and runs through the weekend. To be invited, you have to be (1) very rich, (2) very powerful, (3) very smart, (4) very famous, or (5) have a voice that can make a grown man weep (e.g., Bono). I, unfortunately, fall pretty far short in all five categories (though I am working on my rendition of “Sunday, Bloody Sunday”). As much as I’d like to hop a north-bound train and try to smooth talk my way into the crowd of fawning bloggers and reporters, I have a feeling security is pretty tight. So, I’ll just settle for a few observations offered from boring old Geneva.

What caught my eye over lunch was this and this: Britain’s Prime Minister, Gordon Brown, calling for a “World Bank for the environment.” In his address, he stressed that our current international organizations - namely the International Monetary Fund and the World Bank - “were built for problems of the 1940s and can’t deal with the new problems we have in 2008.” On this point, I have to say I agree. The IMF has proven itself increasingly ineffective at identifying/preventing financial contagion and is continually losing credibility for its overt lack of representativeness. And with the World Bank, well, for an organization that works to combat corruption in the developing world, let’s just say that they may at times be perceived as being a little hypocritical. (If you’re interested in reading more seriously about the WB’s trials and tribulations, and the challenges of development work in general, check out this 2006 book from ex-World Banker William Easterly.) So, to sum up: I agree with Brown that our institutions aren’t up to snuff. The question is, what makes him think that a “green” World Bank would function any better?

On this, the Prime Minister offered few details. Granted, he’s at Davos to inspire, which naturally means to speak about big ideas and avoid getting bogged down in boring details. And granted, it would be heartless to refute Brown’s statement that the developing world will be hardest hit by the effects of climate change. And granted (my last “granted”), I think more money for the environment is almost always a good thing, especially when such funds would be used to finance alternative energy projects in the developing world. But, as I understand it, the devil is in the details. Why not strengthen the role of the Global Environment Facility and make them more accountable? What about increasing the “green role” of regional development banks? What about micro-loans at the local level? What about social entrepreneurship? In the end, I remain unconvinced that consolidating funding for the environment at the World Bank would be the most effective solution. Such an arrangement would surely not be free of the bureaucratic inefficiencies and contentious political debate (between the North and South) that so often gum up other centralized organizations. I look forward to Mr. Brown and the rest of the WEF attendees wowing us on this average, humdrum week in late January.