The economic fallout from the energy crisis unleashed by the war in Iran and questions of how to bolster energy security are dominating discussions at the World Bank and IMF spring meetings in Washington this week.
For low-income countries in sub-Saharan Africa and South Asia, higher import bills for fuel, fertilizer, and food risk exacerbating already record-high debt levels, squeezing the fiscal space necessary to invest in climate action and resilience to future shocks.
At the same time, the US is mounting pressure on the Washington-based financial institutions to disengage from considering climate change in fiscal risks and debt sustainability and to loosen lending restrictions for fossil fuel projects.
The World Bank’s climate strategy, which sets a climate lending target of 45%, expires in June, but discussions on a new plan are being relegated to whispers in corridors, The Guardian reports.
“The US could take advantage of the current circumstances — when people’s attention is focused on other issues — to roll back the progress on climate issues we’ve seen over the past five years,” Salvatore Serravalle of think tank E3G told Semafor.