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CGD Policy Blogs

 

A gas power plant

The DFC, World Bank, and How a Nuanced Compromise on Gas Financing for Poor Countries Could Quietly Become a Blanket Ban (Hint: Ask the Kosovars)

The debate over whether development finance should be allowed for downstream gas projects appears to be settling toward a compromise that makes such investments rare but not impossible. But will it be so in practice? Lessons from a previous (eerily similar) compromise suggest that any flexibility is probably fleeting. A flexible policy is probably not flexible if not a single project can ever get through.

Sunset at a natural gas plant. Adobe Stock

Climate Colonialism Update: More Proposed Bans on Financing of Fossil Fuels (Only for the Poor)

Earlier this year, I wrote about the ban on the international financing of fossil fuels, proposed by Special Envoy John Kerry and others. I argued that such a ban would be particularly devastating for poor countries that are reliant on institutions such as the World Bank to finance much-needed energy projects. For now, the world’s richest countries (also the largest shareholders in the World Bank) have allowed the financing of natural gas projects when no other alternative is available. But this may not last long,

The US capitol building

How Congress Is Turning DFC into an Agency Serving Poland and Israel but not Senegal or Ghana

The US International Development Finance Corporation (DFC) is the $60 billion agency that’s supposed to catalyze investment to capital-starved countries, bolster job-creation in emerging markets, and support US foreign policy. The BUILD Act which created the DFC was a bipartisan bill, carefully crafted to overcome long-standing objections from both liberals and conservatives to its beleaguered predecessor agency.  Recent actions from the Hill and the White House, each one arguably unobjectionable on its own, all add up to a highly worrying erosion of the DFC’s mandate—that threaten both the political bargain that sustains the agency and US strategic goals across Africa.

An image of a fossil fuel refinery

The Biden Administration May Join the European Union in a Ban on Financing Fossil Fuels with Development Dollars. Poor Countries Must Be Exempt.

Since taking office, the Biden Administration has taken several steps to address the climate crisis and plans to do more on the international stage. This trend will be in line with an earlier move by the European Union to “stop funding oil, gas, and coal projects at the end of 2021, cutting €2bn (£1.7bn) of yearly investments.” But a blanket ban on fossil fuels is likely to stifle economic growth and make poor populations in Africa even more vulnerable to the impacts of climate change.

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