In 1975, New Zealand set up a tribunal to distribute billions of dollars in cash and land settlements to Maori people, recognizing a long history of brutal colonization. From 1945 to 2018, Germany paid close to $87 billion to Holocaust survivors and their descendants. In 1988, the United States allotted $20,000 to each living Japanese American person who had been wrongfully detained in “internment” camps.

As Noah Gordon at The New Republic points out, “Reparations aren’t radical, and they aren’t without precedent.” Making reparations—financial or other forms of compensation to those who have been wronged—is not only feasible, it has been done. Yet despite long-standing activism movements, “Notably absent from a list of U.S. reparations are payments to enslaved people or their descendants,” Gordon writes.

But a lack of progress is by no means an indication that the global struggle for reparations is dormant. Last November, world leaders at the annual UN climate conference, COP27, in Sharm El Sheikh, Egypt, reached a landmark agreement to create a new “loss and damage” fund. The facility will distribute money from developed countries to nations that are most vulnerable to—and least able to cope with—climate disasters.

“Loss and damage” is UN lingo for the range of devastating climate impacts countries experience, including droughts, floods, crop failures, sea-level rise, and heat waves. Activists have referred to the new fund as a form of climate reparations, recognizing that, as Barry E. Hill writes in ELR—The Environmental Law Reporter, “Those who are least responsible for climate change suffer its greatest environmental and public health consequences.”

To confirm this logic, one only needs to look out the window or glance at today’s headlines. Climate change has been linked to “a historic drought in East Africa, which is pushing millions of people to the edge of starvation,” the Washington Post reports. In Uganda, last summer’s prolonged drought left more than half a million facing starvation. The Philippines, facing rising sea levels and increasingly severe typhoons, has been named the country most at risk for climate impacts by the Institute for Economics and Peace. And for participants at COP27, the devastating floods in Pakistan last summer, which affected more than 33 million and killed 1,500 people, were a fresh reminder of our climate realities.

“An estimate of damage and loss has exceeded 30 billion dollars,” Pakistan Prime Minister Shehbaz Sharif said at the UN climate conference. “This all happened, despite our very low carbon footprints. . . . We became a victim of something with which we had nothing to do.”

Developed countries are responsible for about three-fifths of historical fossil fuel-based carbon emissions, based on data published by the Global Carbon Project. When you get down to the granular level, the disparity is even more pronounced. “Consider that Pakistan generated 0.6 percent of the world’s CO2 emissions in 2021. Uganda produced 0.02 percent. . . . These countries are almost carbon neutral,” writes Émile P. Torres in Salon. The Philippines stacks up at only 0.39 percent, according to Our World in Data.

The new fund is the result of a decades-long battle to recognize this injustice. In 1991, Vanuatu, an island nation in the South Pacific, first proposed a global insurance pool to provide funding for countries dealing with sea-level rise. The idea was rejected, and loss and damage didn’t show up in UN climate language until the Bali Action Plan 16 years later. The Paris Agreement of 2015 mentions loss and damage, but includes a clause (added by developed countries) that clarifies that the concept “does not involve or provide a basis for any liability or compensation.”

COP27 was the first time parties agreed to put loss and damage on the official agenda, and reaching agreement brought negotiations down to the wire. Now that the fund has been established, many basic details still need to be hammered out. Which countries will contribute, and how much? Who will receive the funds? And in what form will funds be transferred? These questions “may sound technical to the lay reader, but it literally means life or death for our children and grandchildren, and for generations yet unborn,” writes Pakistan Foreign Minister Bilawal Bhutto Zardari. To provide answers, a 24-member transitional committee will deliberate during this year and make recommendations for countries to adopt at COP28 in November.

To understand the opportunities this new fund presents, we first need to consider the current landscape of loss and damage financing. According to preliminary research by the World Resources Institute, existing funding sources are “extremely difficult to identify.” One reason is the lack of an official definition for loss and damage, which means funds may not be properly classified. Yet upon a review of a wide range of potential sources, WRI concludes that at every turn, existing funding “is not enough.”

One potential source, humanitarian assistance, is clearly falling short. Research by Oxfam has found that humanitarian aid appeals for extreme weather events have gone up eight-fold compared to 20 years ago. Over the past five years, half of those appeals haven’t been funded, totaling an unmet need of $3 billion.

Other multilateral funds are also found wanting. In 2009, developed nations pledged that by 2020, they would funnel $100 billion a year in public and private climate finance to developing countries. As a part of this effort, parties to the UN climate talks created the Green Climate Fund to help developing countries adapt to climate change and decarbonize energy systems. Today, countries have failed to reach that pledge by at least tens of billions of dollars. Furthermore, only 16 percent of all Green Climate Fund projects explicitly tie loss and damage to their main activities, according to the Intergovernmental Panel on Climate Change. Remaining UN sources, including the Least Developed Countries Fund, the Special Climate Change Fund, and the Adaptation Fund, “only seemed to provide funding for adaptation,” WRI reports.

Another potential funding source is disaster risk financing. As Mary Boyer, disaster risk management specialist at the World Bank, tells me, “Disaster risk financing is about arranging financial instruments ex ante so that you can have access to quick and cost-effective liquidity when a disaster happens and prepare institutionally for how to allocate and implement the resources.”

Boyer describes a layered approach that multilateral organizations like the World Bank use when working with a country on disaster risk. For events at the lowest level of risk, countries could prepare a rainy day fund within their government, earmarked for disaster response or other shocks. At the medium level, countries could access contingent loans or lines of credit from donors—in the Caribbean region, for example, that donor might be the Inter-American Development Bank or the World Bank. Finally, for the most severe disasters, countries could use risk transfer instruments, an umbrella term for different methods to “transfer risks to the market through some kind of financial institution, like insurance.”

The Caribbean Catastrophe Risk Insurance Facility and the African Risk Capacity Group are examples of regional bodies that offer disaster insurance and other risk-transfer mechanisms. Insurance schemes made headlines recently when a climate risk initiative called the Global Shield was launched ahead of COP27 by the G7, a group of industrialized countries, and the V20, a group of finance ministers from climate vulnerable countries. Like the new loss and damage fund, specific details for how the Global Shield will operate have yet to be finalized. The initiative will likely provide insurance programs and other forms of financial assistance.

Critics of disaster insurance schemes argue that countries need more direct forms of funding for loss and damage. The advocacy group Loss and Damage Collaboration states that insurance usually “only pays out a small proportion of the loss and damage,” and “is ill-suited to address non-economic loss and damage and slow onset climatic processes.”

Regardless of funding structure, a central question remains: How will the new fund get enough money? The fundamental challenge lies with the voluntary nature of most international commitments. Countries will need to give up money of their own volition, and in a nation like the United States, where appropriating money for its own citizens regularly results in gridlock, the proposition can seem out of touch with reality. At a New York Times event only two months before COP27, U.S. climate envoy John Kerry responded incredulously to the idea. “You think this Republican Congress . . . is going to step up and do loss and damage? Good luck!”

There’s also the issue of debt. As philosopher and scholar Olúfémi O. Táíwò points out in Reconsidering Reparations, funds directed to developing countries often come in the form of loans, “saddling recipients with debt rather than relief.” One solution proposed by Táíwò is to convert “sovereign debt into fuel for climate relief.” In fact, the government of Barbados has proposed a similar plan to simultaneously relieve government debt and fund climate resilience.

Some have proposed innovative sources to fund loss and damage. Scholars Margaretha Wewerinke-Singh and Diana Hinge Salili suggest imposing a climate damages tax on fossil fuel companies based on how much carbon is embedded in extracted oil and gas. Divestment from fossil fuels, a popular movement on college campuses in the United States, is another possibility. Meanwhile, in September, UN Secretary-General António Guterres urged “all developed economies to tax the windfall profits of fossil fuel companies.” He asked world leaders to instead redirect fossil fuel subsidies and profits “to countries suffering loss and damage caused by the climate crisis, and to people struggling with rising food and energy prices.”

The new loss and damage fund signals a seismic shift in the political climate. Guterres says “Polluters must pay”—and the global community seems to agree. It’s no longer a question of if climate vulnerable countries should receive compensation, but rather “how much” and “in what form.”

But when it comes to any form of reparations, “The devil is often in the details,” as Táíwò reminds us. The loss and damage transitional committee will need to grapple with many tough questions, both practical and existential. On a procedural level, how will the UN assess the amount of loss and damage? How will non-quantitative losses, like the loss of cultural heritage, be accounted for? How will funds be used, monitored, and evaluated for effectiveness once received? Perhaps most fundamentally, as Gordon asks in The New Republic, “How do you put a price on monumental human suffering?”

In communities that need loss and damage compensation the most, some members maintain a reasonable amount of doubt that world leaders will actually follow through. After all, this would not be the first broken promise from the UN climate proceedings. “How are we to ensure that there are direct resources to the communities that have experienced these losses and damages, as opposed to just new mechanisms for states to further entrench our communities into more loss and damages in our homelands?” asks Eriel Tchekwie Deranger, executive director of Indigenous Climate Action, as reported by Democracy Now!

These concerns underscore a crucial component of meaningful reparations: self-determination. The principle recognizes “everyone’s rights to pursue the political programs that fit their situation, culture, and values,” Táíwò writes. “Different people will come up with different actions and approaches fitting different cultural contexts and strategic situations.” For a challenge as wide-ranging, complex, and context-dependent as climate losses and damages, only a “deeply pluralistic” approach will suffice. TEF

Akielly Hu is associate editor at The Environmental Forum. Views expressed are her own.

The 27th Conference of the Parties to the climate convention that met last November struggled with unresolved tensions that have persisted since the first COP in 1995. Most major emitters have failed to deliver on reduction commitments, and richer nations have come up short in aiding poorer nations transition to a carbon-neutral economy. What we are seeing is a world where nation states and international institutions are unable to cope with a myriad of interconnected and accelerating environmental, economic, technological, and political changes.

A sobering guide to these stresses can be found in the global trends reports of the U.S. National Intelligence Council. The NIC was established in 1979 to facilitate collaboration of the intelligence community with policy experts and researchers inside and outside the government. Every four years since 1997 the NIC has published these reports.

The most recent, “Global Trends 2040,” foresees a destabilized, “more contested world.” Environmental, social, and economic costs of climate change will fall disproportionately on the world’s poorer nations, creating new global “vulnerabilities and exacerbating existing risks to economic prosperity, food, water, health, and energy security.” Environmental stresses combined with aging populations in developed and middle-income nations (e.g., China) will slow world economic growth—and exacerbate existing trends of economic inequality in most countries, fostering increased geopolitical competition. The power of international corporations will increase, but face political movements for regulation and protectionism.

Within populations, pessimism and distrust will grow vis-a-vis the ability of governments to cope with global challenges increasingly experienced at the local level. The trends report predicts many will seek refuge within ethnic, national, and religious identities, as well as in populist political movements that offer specious solutions. Advanced information technology and social media risk promoting an increasingly siloed information world that fuels these social trends, with growing threats to democracy. Rich countries may have less resources and political capital to deal with a world of failing states, as environmental disasters stress their domestic financial and institutional resources.

According to the report, emerging energy technologies with falling costs can speed up the transition to a climate-friendly economy. Examples include solar photovoltaic and wind energy; advanced energy storage systems; and small-scale modular nuclear reactors. But the successful deployment of these technologies is very much a function of the political economy of nations and the international system.

Technology will not save us, unless we save ourselves by reforming political and economic systems mismatched to deal with global challenges. As national and international institutions and multilateral agreements are “overwhelmed or sidelined” by the challenges, the trends report warns, nations, or even individual corporations and billionaires, may take reckless unilateral actions, with unforeseen consequences. Geoengineering, for example, could entail unintended catastrophic side effects on global weather patterns.

“Global Trends 2040” concludes with five scenarios offering different outcomes depending on the evolution of political and economic factors. The optimistic “Renaissance of Democracies” scenario envisages a renewal of the rules-based, western-led international order, both within nations and internationally, spurred by rising economic growth and technological advances. Global challenges will be met, as wealth and technology is shared more equitably with poorer nations. In “A World Adrift,” current trends continue, the international political system and global economy atrophy, and the world spirals into greater turbulence as climate change pushes humanity closer to the edge. In “Competitive Coexistence,” the United States, China and other states cooperate in setting rules for peaceful competition, but “long term climate challenges remain.” “Separate Silos” portrays an Orwellian future where the international order disintegrates into economic and military-security blocs, trade is reduced, more poor countries become failed states, climate change is unchecked, and global problems multiply. Finally, “Tragedy and Mobilization” envisages a future of worldwide environmental catastrophes, causing global food shortages, and mass famine. Violent calls for political change create the political will for the European Union, China, and the United States to effectively act together.

Only one of these scenarios is hopeful for avoiding climate catastrophe and mitigating social and geopolitical risk. Effective action in that direction depends on a growth of trust that governments can address, and together will address equitably, these synergistically interconnected environmental, economic, and social challenges.

ELI at the UN Institute advances rule of law, peacebuilding, and ocean conservation at key international conferences last summer

Fifty years after the United Nations’ first global Conference on the Human Environment, world leaders convened in Sweden this past June to take stock of environmental governance achievements and work toward the next era of sustainable development. At this year’s Stockholm+50 conference, ELI played a key role in two official side events and engaged in several other panels to promote environmental peacebuilding and environmental rule of law.

On June 2, ELI partnered with the Environmental Peacebuilding Association, Geneva Peacebuilding Platform, and PeaceNexus to convene an official side event on Improving Sustainable Development by Integrating Peace. The panel was moderated by ELI Senior Attorney Carl Bruch and featured Research Associate Shehla Chowdhury. Speaking to a full house, panelists discussed the connections among peacebuilding, sustainable development, and conservation by highlighting illustrative case studies and initiatives.

On the same day, ELI also co-sponsored an official side event on Judges, the Environmental Rule of Law, and a Healthy Planet Since the 1972 Stockholm Declaration. Participating judges included several long-time partners of ELI, including Justice Antonio Benjamin of Brazil, head of the Global Judicial Institute on the Environment, Justice Brian Preston of New South Wales, Australia, Justice Mansoor Ali-Shah of Pakistan, and Justice Michael Wilson of Hawaii—all leading champions of climate action.

Prior to the official Stockholm+50 conference, the Institute also co-sponsored a two-day Symposium on Judges and the Environment: The Impact of the Stockholm Declaration in Shaping Global Environmental Law and Jurisprudence. At the event, President Emeritus and International Envoy Scott Fulton presented ELI’s Climate Judiciary Project. The program is the only one in the world working to equip judges with the basic climate science education needed to administer justice in climate-related cases. Fulton shared that the project is now looking to pivot internationally, with the goal of sharing the same knowledge base with justices around the world.

Later in the summer, ELI Oceans Program Director Xiao Recio-Blanco and Visiting Attorney Patience Whitten joined the UN Ocean Conference in Lisbon, Portugal, from June 27 to July 1. As part of the summit’s events, ELI hosted the Future of Food Is Blue panel, in partnership with the Environmental Defense Fund, World Wildlife Fund, Rare, the Government of Iceland, and others. The event formally launched the Aquatic Blue Food Coalition, which promotes fish, shellfish, plants, and other aquatic foods to address food security and climate.

Recio-Blanco spoke at a reception immediately following to share ELI’s research on sustainable fisheries, highlighting the Law and Governance Toolkit for Sustainable Small-Scale Fisheries, published in 2020. The toolkit helps legal drafters develop effective policy mechanisms to sustainably manage small-scale fisheries.

Advancing migration with dignity through innovative research

Climate change, war, economic insecurity, and a myriad of other global issues have accelerated internal displacement and global migration. Yet migrants typically suffer many indignities during their transition to a new place, and existing institutions often fail to recognize their basic human rights. In response to this challenge, ELI and its partners have undertaken groundbreaking work on Migration With Dignity, a framework that offers legal and policy options for governments, policymakers, and nonprofits to uphold the dignity of migrants. The concept builds upon the policies of former President of Kiribati Anote Tong, who asserted the need for the people of Kiribati to maintain their autonomy and standard of living throughout the migration experience.

A recent special issue of the Journal of Disaster Research reflects a collaboration between ELI and the Dignity Rights Initiative, the Delaware Law School, the UN International Organization for Migration, and the Ocean Policy Research Institute. ELI Senior Attorney Carl Bruch co-authored two articles, Migration With Dignity: A Legal and Policy Framework, and The Methodology and Application of a Migration With Dignity Framework, along with Shanna N. McClain, NASA disasters program manager and former ELI visiting scientist.

Migration With Dignity: A Legal and Policy Framework considers a variety of migration contexts and identifies policies that work and gaps that exist for considering the dignity of migrants. Meanwhile, The Methodology and Application of a Migration With Dignity Framework provides a methodology for considering the social and legal dimensions of the Migration With Dignity framework. The issue also discusses the intergenerationality of immigrants in adapting or assimilating into their new environment, and how mass media affects perceptions of migrants in host countries.

ELI is continuing its work on Migration With Dignity through a new grant from the United Institute of Peace, which explores the potential of the framework to prevent and mitigate conflicts. Through research, dialogue, technical assistance, and capacity-building, the Institute seeks to strengthen legal protections for people displaced across national borders through its Environmental Displacement and Migration program.

Report on mining in Amazon identifies major corruption risks

In July, ELI and its partners contributed to Corruption in Artisanal and Small-Scale Mining in the Peruvian Amazon, a study prepared for USAID as part of the agency’s Prevenir Amazonías project. The Prevenir project aims to prevent and reduce the three greatest threats to the Peruvian Amazon: wildlife trafficking, illegal logging, and illegal mining. According to USAID, the project “works with the Government of Peru and civil society to improve the enabling conditions to prevent and combat environmental crimes.”

The guide represents the third in a series of reports developed by ELI for the project. The first, published in 2021, discussed the incorporation of wildlife trafficking into Peru’s organized crime law. Another, released in 2022, detailed best practices for prosecuting and sanctioning wildlife trafficking crimes.

The new report identifies corruption risks in the value chain of the gold derived from artisanal and small-scale mining in the Peruvian Amazon. In doing so, the report addresses the complex reality of mining in an analytical and evidence-based manner. Collaborating with local experts and professors, ELI analyzed interviews and conducted surveys of stakeholders involved in the gold mining value chain, including government officials, specialized prosecutors in environmental matters, and the chiefs of Amazonian Natural Reserves in which illegal mining often takes place.

The report then proposes regulations and governance mechanisms to mitigate these risks.

Sandra Nichols Thiam, ELI associate vice president of research and policy, served as project manager, and Elissa Torres-Soto, staff attorney, served as principal researcher and writer. Research Associate Georgia Ray, Staff Attorney Kristine Perry, and Visiting Attorney Vera Morveli also contributed to the research.

Geared toward policymakers, the study pinpoints the incidents where corruption is more likely to occur, and the factors that make corruption more likely. The Prevenir project is now focused on conducting outreach to spur dialogue and action on the report’s recommendations, especially to members of the Peruvian Congress who are beginning to address these issues.

ELI’s work on the Prevenir project situates within the Institute’s longstanding Inter-American Program. Since 1989, the program has worked in more than 20 countries in the region, with an extensive network of local partners to promote strategies of sustainable development and the conservation of natural resources.

In coming years, ELI plans to release another report under the Prevenir project on the use of amicus curiae in environmental crime cases in Peru, aimed at law students and members of NGOs.

 

ELI in Action Dialogue on the right to a healthy environment

In July, ELI partnered with Delaware Law’s Global Environmental Rights Institute, Barry University’s Center for Earth Jurisprudence, the American Bar Association Section of Environment, Energy, and Resources, the ABA Section of Civil Rights and Social Justice, and the ABA Center for Human Rights to produce a series of webinars about the right to a healthy environment.

Last year, the United Nations Human Rights Council in Geneva formally recognized the right to a “clean, healthy and sustainable environment” and recommended that the UN General Assembly do the same. In the first webinar of the series, a panel of international leaders from the United Nations and the Sabin Center for Climate Change Law at Columbia University discussed what it might mean for the UN General Assembly to adopt such a resolution. In the second installment, human rights practitioners reviewed the United States’ position on the issue, which continues to evolve. And finally, the third webinar, featuring experts in environmental rights and justice, examined the extent to which states in the United States have recognized or might recognize a right to a healthy environment.

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ELI’s Food Waste Initiative is publishing a series of research briefs to present takeaways from the Initiative’s research, spanning a range of topics important to food waste prevention, recovery, and recycling. In May, the Initiative released Social Science Literature Review on Value of Measuring and Reporting Food Waste, authored by Research Associate Margaret Badding and Senior Attorney Linda Breggin. The brief provides an overview of relevant social science literature on the behavioral implications of measuring waste or emissions. Research indicates that simply measuring these components can motivate behavior change, due to increased awareness as well as reputational and financial concerns of measuring entities.

In June, the Initiative also published An Overview of Multilingual Outreach, Translation, and Language Justice Resources. Implementing environmental initiatives requires clear communication with affected communities—including those that speak languages other than English. Written by Research Associate Jordan Perry and Senior Attorney Linda Breggin, the brief highlights best practices for effective and inclusive multilingual outreach and document translation. To be most helpful to organizations with limited time and funds, these best practices are pulled from ready-to-use resources such as checklists and toolkits.

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Under the Clean Water Act, states, territories, and tribes restore water quality in part by implementing Total Maximum Daily Loads (TMDLs), which set a maximum level of a pollutant allowed in a given body of water. Evaluating the effectiveness of TMDLs is challenging, yet vital for revealing whether a TMDL and implementation actions are working or should be revised.

In June, ELI published Evaluating the Water Quality Effects of TMDL Implementation: How States Have Done It and the Lessons Learned, a report highlighting the diversity of approaches to evaluating the water quality effects of TMDL implementation. The document explains some of those methods and conveys lessons learned. It also details terminology challenges and identifies relevant resource materials. By facilitating communication among water quality programs, the document aims to generate new ideas and ensure that future TMDL restoration efforts are more effective and efficient.

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This past year, ELI hosted a workshop series on Communicating Complex Science: The Challenge of Sea-Level Rise. Funded by the National Science Foundation’s Paleoclimate Program and co-hosted with George Washington University Law School, these discussions brought together scientists, lawyers, and policy professionals to examine opportunities in communicating the science of sea-level rise.

The initial session, focused on explaining the science and attributing the impacts of sea-level rise, was held in November. The panel featured presentations by scientists Andrea Dutton from the University of Wisconsin-Madison and Ben Strauss from Climate Central. Robin Craig from the University of Southern California Gould School of Law facilitated a conversation to set the stage for subsequent sessions on the implications for law and policy.

In May, a follow-up session focused on the legal and policy landscape of sea-level rise included presentations from Astrid Caldas from the Union of Concerned Scientists, Jeffrey Peterson, author of A New Coast, Thomas Ruppert from Florida Sea Grant, and Robin Craig.

With the effects of climate change and catastrophic weather conditions on the rise, the U.S. government must do everything in its power to address the crisis. As a major contributor of greenhouse gas emissions, and thereby a large contributor to global climate change, the United States has not taken significant steps to address the issue.1 The country suffers from billions of dollars in direct losses from climate-related events, but only allocates 0.07 percent of the federal yearly budget to other governments and international organizations to support international climate change efforts.2 This relatively small contribution suggests that the United States could and needs to do more to address the global climate crisis.

The Joseph Biden administration strives to make climate change a top priority—a tremendous improvement when compared to the inaction and disregard of the Donald Trump administration. On January 27, 2021, President Biden issued his Executive Order on Tackling the Climate Crisis at Home and Abroad.3 The Executive Order opens by declaring:

The United States and the world face a profound climate crisis. We have a narrow moment to pursue action at home and abroad in order to avoid the most catastrophic impacts of that crisis and to seize the opportunity that tackling climate change presents. Domestic action must go hand in hand with the United States’ international leadership, aimed at significantly enhancing global action. Together, we must listen to science and meet the moment.4

In addition to recognizing the climate crisis and the importance of the United States’ role in addressing it, the Biden administration emphasizes using multilateral principles to approach policy decisions.5 Scholars have urged the administration to focus on the role of multilateral development banks6 to put multilateral principles into practice and address global issues such as climate change.7 Similarly, during the Carbis Bay Summit, the Group of Seven—including the United States—called upon MDBs to increase their climate finance and publish a plan to fully align with the objectives of the Paris Agreement.8

Like the United States, the United Nations plays an international role in leading climate change efforts. The U.N. estimates that two to three trillion dollars will need to be invested per year within the energy, infrastructure, agriculture, health, and education sectors in developing countries to achieve the Sustainable Development Goals—often referred to as the “infrastructure financing gap.”9 Experts believe this gap needs to be addressed within emerging economies to combat the effects of climate change.10 MDBs can play a significant role in addressing climate change11 by partially funding the infrastructure financing gap.12 The G7 recognizes that current funding and financing approaches are inadequate in addressing the gap, and that MDBs should work to increase the mobilization of their capital for sustainable infrastructure.13

MDB decisions and policies have the potential to mitigate climate impacts and lower global GHG emissions. MDBs finance projects in many emerging economies with fast-growing emissions, and the majority of coal power development occurs in emerging economies.14 In 2010, GHG emissions from developing countries accounted for more than one-half of all global emissions, and they continue to increase yearly.15 This increase coincides with positive developments in developing countries, such as a decrease in poverty rates and an increase in access to safe drinking water.16 MDBs can play a significant role in reaching the economic and social development required for developing nations to reach net-zero carbon emissions.17

Although MDBs have the potential to help achieve Paris Agreement climate targets, there are many criticisms surrounding their actions, leaving significant room for improvements. Without a clear definition of the concept of sustainability or empirical indicators of sustainability,18 MDBs are presented with challenges of measuring the sustainability of their development projects, meeting their development goals, and cutting their GHG emissions.19 MDB infrastructure projects often include sectors that account for large amounts of global GHG emissions—further illustrating the conflict between development and climate change contribution.20 For instance, energy consumption—including transportation, electricity and heat, buildings, and manufacturing and construction—accounts for 73 percent of global GHG emissions.21 Other sectors that also produce a large amount of GHGs include agriculture, land use, and forestry.22

Essentially, developing countries and MDBs face unique challenges with respect to climate change because they must develop in a sustainable way. As an example, developing countries should not rely on fossil fuels for energy development, and must go straight to reliance on renewable energy sources. Practically speaking, the institutions funding development projects in these countries need to consider these challenges to ensure a more sustainable future for development. The Paris Agreement and SDGs exist to address these challenges, and the MDBs can work to align themselves with both.

This article explores how the United States can use its power and vote to align MDBs with the goals of the Paris Agreement. More specifically, it outlines some of the key elements that the Biden administration’s strategy toward MDBs should contain, including focusing on transparency, tracking GHG emissions for each project funded by an MDB, and setting science-based targets for their GHG emissions. The first part provides an overview of how the MDBs are organized and operate, along with some criticisms of MDBs and their operations. Part two discusses the U.S. role in MDBs and policies toward MDB involvement. Part three explores how the United States can assist in aligning MDBs with the Paris Agreement given §§102(f) and 102(g)(ii) of the Executive Order, and provides key elements for the strategy.

Overview of MDBs

Development banks provide capital and advisory services for infrastructure projects, businesses, agriculture, and other sectors where financial needs are not being met by the public sector, commercial banks, or capital markets.23 These banks often receive public funding or initial capital from public resources.24 Development banks can be international (e.g., the World Bank) or regional (e.g., the Asian Development Bank).25

This article focuses on MDBs, international financial institutions that have been established by more than one country in order to support development in developing countries.26 MDBs usually provide assistance through a loan or grant, with the aim of promoting economic and social development.27 The loans and grants distributed by MDBs often supply funding for large infrastructure projects (e.g., roads, dams, and power plants) and policy reform (e.g., reform in agriculture or electricity-sector policies).28 MDBs tend to finance projects through equity investments, long-term loans, and guarantees.29 MDBs can be further categorized as global, regional, or subregional.30 Global MDBs provide assistance across several regions, achieving a wide geographical scope, whereas regional development banks only operate across one region.31

Mandates, Operations, and Organizational Structure

MDBs operate within mandates set by their establishing countries. Most of these mandates were established in the 1960s but have expanded over time.32 Today, many MDBs’ mandates call for sustainable economic development.33 Infrastructure is the largest sector supported by MDB projects; transportation and energy serve as two examples of MDB-supported infrastructure projects.34 MDBs help secure global public goods, including climate health, public health, and security.35

One must understand the organizational structure of MDBs and how they actually operate. The World Bank, for example, exercises autonomous control over decisionmaking procedures, sources of funding, administration, and budgetary needs, despite the fact that it is a specialized agency within the U.N.36 Regional development banks, on the other hand, act as independent international agencies unaffiliated with the U.N.37 Despite this, regional development banks must comply with directives, such as economic sanctions, voted on by the U.N. Security Council.38 Despite the directive power the U.N. Security Council has over MDBs, they are not subject to decisions by the U.N. General Assembly, nor are they subject to decisions by other U.N. agencies.39

MDBs have similar internal organizational structures; each has its own management staffed with international employees and each has its own supervising board of governors and board of executive directors.40 Each MDB’s board of governors makes major policy decisions ranging from day-to-day delegation of duties to lending and amending founding documents.41 Significantly, some major donors have their own executive director on the board of executive directors to represent their interests.42 The United States has its own executive director, while smaller member countries are represented in groups by one executive director per group.43 MDB executive boards typically meet weekly to consider loan and policy proposals and oversee bank activities.44

Like many institutions, the decisionmaking process within MDBs occurs by vote. Member countries’ voting shares are weighted based on cumulative financial contributions, among other commitments to the organization.45 Figures created by the Congressional Research Service indicate that the United States carries between 5 percent and 30 percent voting power in a number of MDBs, even clearing the voting power threshold for major policy decisions for the Inter-American Development Bank and World Bank.46 The United States carries enough power to veto major policy decisions at both of these banks, but cannot veto small decisions like the granting of individual loans.47 Each MDB has its own set of policies and practices, as well.

MDBs have safeguard systems48 that define each bank’s policies, principles, and operational requirements with respect to the environmental and social impacts of their development projects.49 The most common safeguards among MDBs are those involving the environment and sustainable development.50 Most MDBs also have policies in place to establish public communication or disclosure.51

MDB safeguard systems typically include several key components.52 One key component is an overarching policy statement set out by the MDB that outlines its “key objectives, policies, principles, scope, hierarchy and organizing framework of the institution’s approach to potential environmental and social impacts and risks of its activities.”53 Not all MDBs’ policy statements are necessarily mandatory.54

Another key component to safeguard systems is mandatory operational requirements for borrowers, and they are usually set out for specific lending circumstances.55 The third key component, environmental and social review procedures, tends to be mandatory for the MDB itself.56 The final key component, broadening access to information policies, goes hand-in-hand with transparency objectives.57

MDBs’ safeguards share some common features, including borrower requirements to undergo environmental and social assessments of projects or operations to be financed by the MDB, supplementary safeguards used to address specific environmental or social risks that set out institutional requirements to manage and assess the risks, and greater consistency in the risk areas that are covered.58 The key areas of operational safeguards among MDBs in relation to environmental sustainability are environmental and social assessment, involuntary resettlement, pollution prevention, biodiversity, community impacts, and environmental flows.59

The financial support from member countries allows MDBs to provide financial assistance to developing countries.60 MDBs raise capital through the issuance of bonds to countries who want to borrow capital.61 MDBs rarely face difficulties in being repaid by these borrowing countries.62 Most MDBs apply different safeguard instruments for development, programmatic, and investment lending.63

For policy-based lending and programmatic-based lending,64 MDBs generally require an evaluation of environmental and social impacts, and some will require some sort of action plan.65 As an example, the World Bank’s policy-based lending approach requires that the bank determine whether a specific country’s policies will have significant effects on that country’s natural resources and environment or will lead to significant poverty and social consequences for poor and vulnerable populations.66 The World Bank’s programmatic lending approach, on the other hand, requires the bank to undertake what is known as an environmental and social systems assessment, which looks at any potential impact or risk associated with a specific program.67

When it comes to investment lending, MDBs follow a more diverse approach depending on the project structure and circumstances.68 Different MDBs apply different safeguards when engaging in investment lending. For example, some may preemptively conduct environmental screening, while others require that projects must comply with the more stringent of either a host country’s law or an MDB’s own requirement.69 MDBs require compliance with national law and international agreements by borrowers to ensure that a project is “designed and carried out in compliance with . . . national obligations . . . under ratified Multilateral Environmental Agreements.”70

Overall, there is a general consistency between MDBs and their thematic coverage of safeguard issues within their systems; environmental assessment, protection of natural habitats, pollution prevention and abatement, climate change, and biodiversity are just a few examples of the environmental considerations that MDBs implement in their various safeguard systems.71 Some MDBs even list exclusions or prohibited projects within their environmental and social safeguard policies or frameworks that they will not support.72

Criticisms of MDBs

Although there are many potential positive impacts that can be made by development banks, there are also many criticisms. Critics argue that MDBs are too focused on “getting money out the door” rather than achieving their desired results. MDBs also face criticism for not being transparent enough when reporting GHG emissions from their development projects.73 Experts have also recognized that empirical research on development banks is limited,74 and there is very little research on actual environmental outcomes of the impact of environmental and social standards.75

Scholars have identified a number of different challenges in sustainable banking, including the uncertain bankability of projects,76 non-transparency in tracking sustainable capital flows, and the fact that no universal mechanism capable of making matches between green investment supply and demand exists.77 Another issue is the lack of access to capital.78 The commercial banking industry has access to the necessary capital, but without assistance from MDBs, the industry cannot match the developing economies’ range of opportunities for capital investment.79

Although sustainable development is within the mandate of many MDBs, they have been criticized for being less transparent regarding the climate-related impacts of their investments when compared to some of the biggest corporations with large carbon footprints.80 For instance, in 2017, a news article comparing the World Bank and Walmart found that the World Bank was seriously lagging behind Walmart and other major corporations like Gap, Nike, and Levi Strauss with respect to transparency on the climate impact of their investments.81

In addition to the issue of some MDBs not tracking total GHG emissions from their funded development projects or setting targets to reduce them, critics of MDBs also argue that they focus on short-term outputs, fail to engage in long-term activities, and put large demands on the governments of developing countries.82 MDBs have also been subject to criticisms that they use unsustainable growth-based models, lack an approach to align their entire lending portfolio with the Paris Agreement, focus on megaprojects that generate carbon-intensive infrastructure, and fail to protect forests.83

Climate Pledge Between MDBs

Although they are not immune from criticism, MDBs have been taking action to align with the Paris Agreement and address environmental concerns. In response to the Paris Agreement, nine MDBs announced a climate pledge a few years ago to recognize and increase investments targeting climate change by $175 billion by 2025.84 Previously, climate financing by MDBs was already hitting record levels, with a combined $111 billion financial target reached via MDB climate finance and co-finance.85

The pledged funding increase will come in three streams, beginning with a commitment to increase climate finance allocation levels globally by $65 billion by 2025, a 50 percent increase from current levels—with $50 billion specifically allocated to lower- and middle-income economies.86 Second, the annual combined climate adaptation finance will double to $18 billion by 2025.87 Finally, co-financing for climate action investment is expected to rise to $110 billion, with $40 billion expected to be mobilized by investors from the private sector.88

Along with the three streams, the nine MDBs released a joint statement outlining five actions to adapt to climate change and mitigate climate risks.89 The policy begins with each MDB individually committing to increase climate finance levels over time through the first two funding streams outlined above.90 The second action policy is based on the co-financing endeavor highlighted by the third funding stream mentioned above.91

The third policy commits to helping MDB clients deliver on the goals set forth in the Paris Agreement. The MDBs will present a common framework and define principles to be incorporated by each institution. That is expected to take place starting from 2021 onward.92 The fourth action commits to developing a transparency framework.93 Finally, each institution pledges to assist clients in the transition away from fossil fuels by implementing long-term GHG emissions and climate-resiliency strategies, and to develop financing and policy strategies to transition to a more climate-conscious future.94

The U.S. Role in MDBs

The United States plays a significant role in MDBs and can have a significant influence on their decisions. It serves as a leader in MDBs, including the World Bank (including three sub-institutions—the International Bank for Reconstruction and Development, the International Development Association, and the International Finance Corporation95), IDB, Asian Development Bank, African Development Bank, and European Bank for Reconstruction and Development.96

The United States can significantly influence MDBs by shaping their agendas and leveraging U.S. funding to MDBs to ensure that the MDBs are effective and impactful.97 Both the U.S. Congress and the executive branch play major roles in implementing policy regarding MDBs.98 Congress has complete responsibility for the level of U.S. financial commitments to the MDBs, the general framework for U.S. policy, and the rules that govern U.S. participation in the MDBs, whereas the secretary of the U.S. Treasury negotiates with other countries on the topic of MDB policy and prospective funding agreements.99 The Treasury also oversees the management of day-to-day conduct with respect to U.S. participation in the banks.100

Congress Grants Authority to the Secretary of the Treasury

The Bretton Woods Agreements Act of 1945 authorizes the United States’ participation in the International Monetary Fund and the World Bank.101 Following this act, additional legislation was modeled on it to authorize further participation in the other regional development banks.102 This congressional action allows the United States to participate in the schemes of MDBs.

Congress provides funding and oversight of the United States’ participation in the MDBs, which plays an important role in shaping the country’s policies at the MDBs.103 Congress has passed mandates regarding U.S. participation in the MDBs.104 Due to these mandates, the United States can oppose MDB loans and projects that it does not agree with. For example, when a project fails to follow environmental assessment procedures or has negative environmental impacts, the United States can oppose the project.105

Role of the Executive Branch

The president appoints representatives from the United States to sit on the executive boards for MDBs. The president also delegates the responsibility of voting and taking positions on behalf of the United States to the treasury secretary.106 The authority to delegate this power from the president to the Treasury stems from §581 of Division D of the Consolidated Appropriations Act, which provides Treasury with the responsibility “to coordinate activities relating to the United States’ participation in the international financial institutions and relating to organization of multilateral efforts aimed at currency stabilization, currency convertibility, debt reduction, and comprehensive reform programs.”107 Additionally, the act requires the Treasury to “report to the appropriate congressional committees describing the actions taken by each multilateral development institution to implement the policy goals specified in Section 581 and further actions needed to meet these goals.”108

In addition to delegating powers to the Treasury, the president’s role also extends to the establishment of the National Advisory Committee on International Monetary and Financial Policies. The NAC was originally established by the Bretton Woods Agreements Act and has changed over time. It now serves to “coordinate policies, advise on problems, and recommend legislation regarding international monetary and financial affairs.”109 The NAC has the authority to review proposed loans or other financial transactions and determine whether those transactions align with the United States’ policies and objectives with respect to international financial affairs.110 The NAC chairman is also required to report to Congress on the United States’ participation within international financial institutions, like MDBs, including assessing the effectiveness of major policies and operations, how the United States is affected by those issues, and progress taken to achieve U.S. policy goals.111

MDB Funding

As noted above, the United States is the largest donor for a number of MDBs.112 This position as the largest donor to a number of MDBs affords it great voting power and influence. Although the United States does not have the power to veto day-to-day decisions, it has voting power great enough to veto major policy decisions at the World Bank and the IDB.113 The United States also enjoys a position of great influence in a number of other MDBs as well.114

As a major contributor to the funding of many MDBs, the United States thus has the ability to play a key role in moving MDBs toward climate pledge goals and aligning with the Paris Agreement. While the issue of funding MDBs is not immune from political debate, the current administration has tasked the treasury secretary to develop a climate finance plan through use of MDBs and other institutions in an effort to reduce the environmental impacts of global development.115

How the United States Can Assist MDBs in Aligning With the Paris Agreement

Despite the existing criticisms of MDBs, researchers opine that such banks are the “best set of international institutions available to help the U.S. face the complex global challenges of the 21st century, and they fit perfectly within the multilateral approach of the new Biden administration.”116 This section lays out the parts of President Biden’s Executive Order that relate to aligning the MDBs with the Paris Agreement, and suggests elements that should go into the Biden administration’s strategy to align international development with fighting climate change.

Executive Order on Tackling the Climate Crisis at Home and Abroad

Section 102(f) of the Executive Order illustrates the current administration’s commitment to prioritizing the use of multilateral tools while addressing climate change. The section reads:

The United States will also immediately begin to develop a climate finance plan, making strategic use of multilateral and bilateral channels and institutions, to assist developing countries in implementing ambitious emissions reduction measures, protecting critical ecosystems, building resilience against impacts of climate change, and promoting the flow of capital toward climate-aligned investments and away from high-carbon investments.117

Section 102(g)(ii) of the Executive Order tasks the secretary of the treasury with developing a strategy to align MDBs with the Paris Agreement, declaring:

[T]he Secretary of the Treasury shall develop a strategy for how the voice and vote of the United States can be used in international financial institutions, including the World Bank Group and the International Monetary Fund, to promote financing programs, economic stimulus packages, and debt relief initiatives that are aligned with and support the goals of the Paris Agreement.118

The Voice and Vot of the United States Within MDBs

The United States is the lead shareholder in the five major MDBs discussed above, and can therefore use its voice to influence the other shareholders.119 Care should be taken in expressing that influence to ensure the steps taken are actually effective.120 There are many examples of how the United States has used its voice to influence the MDBs. The IDA—a sub-institution of the World Bank—was created through the suggestion of the United States so that the poorest countries could receive low-interest loans with long-term repayment periods.121 The IDA notably provides grants to these countries122 largely due to U.S. pressure.123

Further, leaders of the MDBs are likely to ask the Biden Administration for more funding, which will give the United States more influence within the MDBs’ decisions.124 A similar scenario occurred in 2020 when the United States increased capital to the World Bank and, as a result, was able to secure transparency and accountability reforms within the World Bank.125 This is the kind of influence and pressure that can be used to align the MDBs with the Paris Agreement, and the Secretary of the Treasury should include the following elements when drafting its strategy.

Key Elements for Climate Alignment Strategy

MDBs have committed to align with the Paris Agreement by ensuring that their strategies and activities are consistent with the goals of the Paris Agreement,126 but they have made slow progress in doing so.127 In drafting a strategy to assist them in aligning more quickly, U.S. policymakers can look toward different initiatives that have been put in motion to work toward sustainable development and financing. One example is the U.N. Environment Programme Finance Initiative, which provides financial principles for responsible banking and works to align the banking industry with the Paris Agreement and the SDGs.128 There are 206 signatories to this initiative—the majority of them being private banks.129

Even though this initiative is geared toward private banks, it can serve as a source for guidance for the United States and MDBs. Signatories to the initiative are continuously required to analyze the impact on people and the planet; use that analysis to set targets where that impact is significant; and report that progress publicly.130 After 18 months, signatories are required to report on their impact, what targets they have set, their progress, and how they have been implementing the three financial principles.131 Similar to this initiative, the United States’ strategy should focus on influencing MDBs to measure total GHG emissions from development projects (as a part of analyzing its impact on people and the planet), set science-based targets for measuring and reducing GHG emissions, and transparently report on this information and their progress.

The United States’ position of influence at a number of MDBs affords it the ability to push MDB policy further toward their climate goals. While MDBs commit to align with the Paris Agreement, U.S. policymakers can lead efforts at MDBs to accelerate these goals through specific policy objectives. The United States can increase its own funding to MDBs, appoint climate-focused representatives to serve as the voice for the U.S. agenda, push for increased transparency standards, end funding for fossil fuel-based projects, adopt a uniform framework for measuring risk, measure the GHG emissions of each development project, and set science-based targets for measuring and reducing GHG emissions.

First, in order to be successful in aligning with the Paris Agreement, MDBs need additional capital.132 Increasing the capital contributed to MDBs would be a minimal cost to U.S. taxpayers and would help the MDBs fund projects that are in line with the Paris Agreement.133 It has not always been clear in what direction MDB funding by the United States will go, but it appears that the U.S. government is trending toward increasing appropriations to MDBs year-over-year.

As early as 2017, the Trump administration proposed cutting funding to MDBs by $650 million over a three-year time period.134 Despite this, the administration one year later pledged to commit funding to support an expansion of the World Bank’s IBRD.135 Further, congressional appropriations dedicated to MDB funding exceeded the amounts requested by the previous administration for both fiscal years 2019 and 2020.136

For fiscal year 2021, the Biden administration is requesting $1.56 billion in congressional appropriations for MDBs.137 In December 2020, Congress passed the 2021 spending package, which included funding guidelines for international climate funding.138 MDBs provided $46 billion to climate financing, including funding for climate mitigation and adaptation projects, in 2019, and Congress has directed the United States to provide $1.48 billion to the MDBs in 2021.139

Another avenue in which MDBs can increase capital is through private finance. The G7 members recognize that current funding and financing approaches are inadequate to address infrastructure needs.140 Therefore, the G7 supports an increase in market-based private capital and requests that MDBs prioritize capital mobilization strategies.141 The World Bank Group also recognizes the opportunities presented by private finance and leverages the private sector through an approach called maximizing financing for development.142 Under this approach, the World Bank Group considers private and public solutions whenever a new project is presented.143

The United States should use its power to influence other MDBs to adopt similar initiatives as an additional way to increase capital. This increase in capital is a crucial first step toward aligning MDBs with the Paris Agreement, but further action is needed.

As a major contributor to the funding of many MDBs, the United States has the ability to play a key role in moving MDBs toward climate pledge goals and aligning with the Paris Agreement. As noted earlier, the United States has voting power great enough to veto major policy decisions at the World Bank and the IDB.144 The United States also enjoys a position of great influence in a number of other MDBs as well.145 With that great a degree of voting power and influence, it is important that U.S. appointees to MDBs’ executive boards share the goal of aligning MDBs with the Paris Agreement.

During the prior administration, the U.S.-appointed executives for both the World Bank and the IDB were Trump appointees.146 It is no secret that the outgoing administration was not climate-focused; in fact, the Trump administration likely accelerated the impacts of climate change through its policy decisions, and the four years of lost time that could have been put toward climate-focused policy decisions set back the United States—and the rest of the world—significantly.147 With the Biden administration’s push toward aligning with the Paris Agreement, new appointees to the executive boards of MDBs are a critical element to this strategy. New appointees need to do more than just align MDBs with the Paris Agreement, they must follow all the goals mentioned here.

Although the United States already prioritizes promoting transparency across and among the MDBs,148 it should push for stronger efforts. MDBs have policies in place to promote transparency and are pursuing initiatives to increase transparency. The International Aid Transparency Initiative improves transparency of development and humanitarian resources to address poverty.149 The IATI works with governments, MDBs, private-sector institutions, and civil society organizations to increase transparency on the resources available to developing countries.150 It encourages all organizations with resources going to developing countries to make information available regarding their development and humanitarian activities through the IATI’s data standard.151

According to the IATI, using transparent, high-quality data can help work toward sustainable development.152 Several MDBs have also registered with the IATI to show their commitment to transparency.153 However, one potential downside of IATI data is that the quality of the data is not standardized. Organizations that decide to publish IATI data are responsible for deciding what and how much detail they provide and the IATI does not take responsibility for audits or verifications of the data.154

An alternative initiative that advocates for transparency is the Global Reporting Initiative.155 This initiative also provides a set of transparency standards, but is specifically geared toward sustainability reporting.156 The standards are used by organizations to prepare sustainability reports and are used by every organization that prepares a report.157

Further, a December 2018 report by the World Resources Institute emphasizes the importance of transparency with regard to aligning MDBs with the Paris Agreement.158 Countries aligned with the Paris Agreement made a commitment to being transparent about implementation progress, and WRI notes that MDBs and other institutions must follow suit to ensure the efficacy of the Paris Agreement.159 While MDBs are good at disclosing how much they invest in climate-related activities, they fall short on making sure their investments are consistent with their climate goals.160

WRI gives the example that MDBs report jointly on spending on renewable energy, but they do not report on how much they invest in oil and gas.161 MDBs need to do a better job on reporting transparently on all aspects of their investments for any strategy to be effective. The WRI report emphasizes the important progress MDBs have made by adopting the climate pledge, but argues that the MDBs need to do more than that to reduce climate change harm to below dangerous levels.162 This report emphasizes the need for transparency, but also briefly touches on another problem with the way MDBs currently operate—not only that they are not transparent about how much they spend in the oil and gas sector, but that they are continuing to spend money in this sector.

Although MDBs contribute positively to climate financing, they have long funded fossil fuel-based development projects.163 This goal is the most straightforward for the MDBs to adopt. The G7 members recognize coal power as the largest contributor of GHG emissions, and have committed to the international transition away from unabated coal.164 As a G7 member, the United States should push for the elimination of fossil fuel subsidies, and to put an end to overseas financing for fossil fuels.165

Other countries need to follow suit and call on MDBs to phase out fossil fuel financing.166 A 2017 report published by Oil Change International found that six major MDBs provided more than $83 billion in public funding for fossil fuels between 2008 and 2015.167 In that same time period, 30 percent of all MDB energy financing went to fossil fuels and only 25 percent went toward clean energy sources.168 MDBs must shift financing and resources away from fossil fuels and into clean energy to align with the Paris Agreement.

Many financial institutions use a risk management framework known as the Equator Principles to determine how much environmental and social risk a project takes on. The Equator Principles set out a framework for risk management to determine, assess, and manage the social and environmental risks of a financial institution’s development projects.169 The Equator Principles have been adopted in 37 countries, and set out a number of standards for international project financing.170 While there are some national development bank members, the majority of the financial institutions that have adopted the principles are private.171 However, MDBs are beginning to implement the same standards that are found within the Equator Principles.172

By implementing the Equator Principles, MDBs can converge on a common set of environmental and social standards and practices.173 Where they are implemented already, the Equator Principles promote responsible environmental and social management practices in the financial and banking industry of countries and institutions that have adopted them, and they even support members to develop their own environmental and social-risk management systems.174 This kind of support can help MDBs develop a framework to manage environmental harm and push them closer to accomplishing their climate pledge goals. A framework such as the Equator Principles could be used in a number of ways to bring the MDBs into uniformity on climate policy, an example being the use of a uniform framework to measure GHG emissions.

A working report drafted by the NewClimate Institute and Germanwatch recommends a number of actions that MDBs can take to align their investments with the goals of the Paris Agreement. One of those actions is that MDBs must begin GHG accounting as a prerequisite to their projects.175 The World Bank began reporting its aggregate GHG emissions in 2017.176 By making this commitment, the World Bank became the first MDB to measure GHG emissions and determine the quantity of GHG emissions it creates or avoids as a result of its funded projects.177

The commitment by the World Bank marked an important change in the way that MDBs conduct themselves, because they previously only tracked emissions project-by-project and the data were often difficult to find.178 The World Bank’s implementation involves reporting aggregate GHG emissions from its investment projects.179 Other MDBs began to follow suit around the same time. For example, the Asian Development Bank committed to measuring its emissions and to reduce them at the same time that the World Bank committed to report its aggregate GHG emissions.180

The NewClimate Institute/Germanwatch working report recommends that GHG accounting should cover three scopes—direct emissions, emissions from generation of electricity or heat used, and other indirect emissions.181 It further recommends that all GHG emissions reporting should be publicly disclosed.182 Not only do MDBs have to measure GHG emissions, they must also set science-based targets to measure and reduce GHG emissions based on the data collected in order to align with the Paris Agreement.

Science-based targets to measure and reduce GHG emissions are crucial to aligning MDBs with the Paris Agreement. The U.N. Global Compact, WRI, Carbon Disclosure Project, and World Wide Fund for Nature joined in partnership to create the Science Based Targets initiative.183 This initiative was created with the goal of promoting institutions to set science-based targets in transition to a low-carbon economy.184

The SBTi identifies five criteria for companies to assess their target goals.185 First, entities must look to their overall scope 1 and scope 2 emissions186 and all their GHG emissions as set forth in the GHG Protocol Corporate Standard.187 Second, entities must commit to setting science-based targets that cover at least five and no more than 15 years from the date the target is submitted.188 Third, the target goals must be consistent with the Paris Agreement’s goal of keeping the global temperature increase well below 2 degrees Celsius.189 Fourth, entities must screen for all scope 3 emissions190 that it may create in its activity.191 Finally, the SBTi recommends that entities disclose all GHG emissions annually.192

While the SBTi was launched with private institutions in mind, the goals can be adopted by public financial institutions like MDBs, and the SBTi actually encourages that public financial institutions do adopt its five criteria.193 MDBs should adopt the SBTi criteria because it will help them set targets that are rooted in science and adhere to a set of uniform principles while also increasing transparency with respect to annual GHG emissions.

Conclusion

The United States should do everything in its power to ensure that the Paris Agreement goals are met. The Biden administration recognizes the need for climate policy changes in its Executive Order on Tackling the Climate Crisis at Home and Abroad, while also recognizing the important role that the MDBs can play in meeting the Paris Agreement goals.

With the amount of influence the United States can have on MDB policy decisions and the Biden administration’s efforts to take on the climate crisis, one hopes that MDBs can continue to take swift action to align themselves with the Paris Agreement and work toward mitigating the effects of climate change while still supporting global development. As the Biden administration is still in its early years, only time will tell whether the United States can really lead the effort toward addressing climate change. ELR

This article appeared in The Environmental Law Reporter, September 2021, titled "Using Multilateral Development Banks to Achieve Paris Climate Goals."

1. See generally Joe Thwaites, 4 Climate Finance Priorities for the Biden Administration, World Resources Inst., Jan. 28, 2021, https://www.wri.org/insights/4-climate-finance-priorities-biden-administration (stating that the Donald Trump Administration cut climate funding while the rest of the world has moved ahead).

2. Id.

3. Exec. Order No. 14008, 86 Fed. Reg. 7619 (Feb. 1, 2021), available at https://www.govinfo.gov/content/pkg/FR-2021-02-01/pdf/2021-02177.pdf.

4. Id.

5. Id.

6. Rebecca M. Nelson, Congressional Research Service, Multilateral Development Banks: Overview and Issues for Congress 1 (2020), https://fas.org/sgp/crs/row/R41170.pdf.

7. Chris Humphrey, The Multilateral Tools Waiting to Be Used by the Biden Administration, ODI, Dec. 11, 2020, https://www.odi.org/blogs/17729-multilateral-tools-waiting-be-used-biden-administration.

8. Statement, The White House, Carbis Bay G7 Summit Communiqué §40 (June 13, 2021) [hereinafter Carbis Bay Summit], https://www.whitehouse.gov/briefing-room/statements-releases/2021/06/13/carbis-bay-g7-summit-communique/.

9. See generally U.N. Conference on Trade and Development (UNCTAD), Trade and Development Report 2019: Financing a Global Green New Deal 83 (2019), https://unctad.org/system/files/official-document/tdr2019_en.pdf (discussing developing-country debt sustainability and the SDGs); see also Kathy Zhang & Aniket Shah, Development Banking for Sustainability, Sustainable Dev. Solutions Network, Nov. 17, 2015, https://www.unsdsn.org/news/2015/11/17/development-banking-for-sustainability (stating that there is a trillion-dollar infrastructure financing gap).

10. UNCTAD, supra note 9; Zhang & Shah, supra note 9; see also U.N., UN Secretary-General’s Strategy for Financing the 2030 Agenda, https://www.un.org/sustainabledevelopment/sg-fnance-strategy/ (last visited July 17, 2021) (“The financing gap to achieve the SDGs in developing countries is estimated to be US$2.5-3 trillion per year.”).

11. See generally UNCTAD, supra note 9; see also Alvaro Mendez & David P. Houghton, Sustainable Banking: The Role of Multilateral Development Banks as Norm Entrepreneurs, 12(3) Sustainability 972 (2020), available at https://www.mdpi.com/2071-1050/12/3/972/htm (looking at a study done by the International Monetary Fund (IMF) that implied that MDBs could play an important role in achieving the SDGs).

12. See Mendez & Houghton, supra note 11, at 2 (discussing MDBs’ roles in pioneering sustainable banking and their ability to engage private banks).

13. Carbis Bay Summit, supra note 8, §67.

14. See generally Helena Wright, How Walmart Beats the World Bank on Carbon Footprinting, Climate Home News, Oct. 10, 2017, https://www.climatechangenews.com/2017/10/10/walmart-beats-world-bank-carbon-footprinting/.

15. Marc Fleurbaey et al., Sustainable Development and Equity, in Climate Change 2014: Mitigation of Climate Change. Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change 283, 291 (O. Edenhofer et al. eds., Cambridge Univ. Press 2014), https://www.ipcc.ch/site/assets/uploads/2018/02/ipcc_wg3_ar5_chapter4.pdf.

16. Id. at 291.

17. See Cynthia Cummis, How Can Financial Institutions Deliver on the Paris Agreement?, Sci. Based Targets, July 2, 2008, https://sciencebasedtargets.org/blog/how-can-financial-institutions-deliver-on-the-paris-agreement (“The latest reports by the Intergovernmental Panel on Climate Change (IPCC) have shown that the transition to a net-zero carbon world requires a systemic economic transformation, backed by consistent capital flows.”); see also UNCTAD, supra note 9 (arguing that public or state development banking will be vital to achieving the SDGs).

18. Large volumes of literature have assessed sustainable development indicators to come to this conclusion. See Fleurbaey et al., supra note 15, at 292, 293 (discussing various definitions of “sustainability” and the lack of empirical indicators).

19. See id. at 293 (discussing three links between climate change and sustainability, including the constraint of development paths, trade offs between climate responses and SDGs, and co-benefits between effective climate responses and sustainable development objectives).

20. Id. at 287.

21. Mengpin Ge & Johannes Friedrich, 4 Charts Explain Greenhouse Gas Emissions by Countries and Sectors, World Resources Inst., Feb. 6, 2020, https://www.wri.org/insights/4-charts-explain-greenhouse-gas-emissions-countries-and-sectors.

22. Id. (“The other top sectors that produce emissions are . . . livestock and crop cultivation (12 percent); land use, land-use change and forestry, such as deforestation (6.5 percent); industrial processes of chemicals, cement and more (5.6 percent); and waste, including landfills and waste water (3.2 percent).”).

23. Zhang & Shah, supra note 9.

24. Id.

25. Id.

26. See Organisation for Economic Co-operation and Development (OECD), Development Finance Institutions and Private Sector Development, https://www.oecd.org/development/development-finance-institutions-private-sector-development.htm (last visited July 17, 2021) (defining national and international development finance institutions).

27. Nelson, supra note 6, at 1.

28. Id.

29. Since MDBs generally have a greater financing capacity than bilateral development banks, they are the focus of this Article. OECD, supra note 26.

30. Much of the literature differentiates between global, regional, and subregional MDBs. Annalisa Prizzon, A Guide to Multilateral Development Banks, ODI, June 28, 2018, https://odi.org/en/publications/a-guide-to-multilateral-development-banks/; Lars Engen & Annalisa Prizzon, ODI, A Guide to Multilateral Development Banks (2018), https://cdn.odi.org/media/documents/12274.pdf.

31. Prizzon, supra note 30; Engen & Prizzon, supra note 30.

32. Id.

33. Id.

34. See generally id.

35. See generally Cary Springfield, The Effectiveness of Multilateral Development Banks, Int’l Banker, Oct. 10, 2019, https://internationalbanker.com/banking/the-effectiveness-of-multilateral-development-banks/.

36. Nelson, supra note 6, at 11.

37. Id.

38. Id.

39. Id.

40. Id.

41. Id.

42. Id.

43. Id. at 12.

44. Id.

45. Id.

46. Id.

47. Id.

48. MDBs also have operational safeguards, such as lending operation requirements, that will not be covered for the purposes of this Article. Harvey Himberg, Comparative Review of Multilateral Development Bank Safeguard Systems (2015), https://consultations.worldbank.org/sites/default/files/consultation-template/review-and-update-world-bank-safeguard-policies/en/related/mdb_safeguard_comparison_main_report_and_annexes_may_2015.pdf.

49. Id. at 1.

50. Engen & Prizzon, supra note 30.

51. Id.

52. Four of these components are relevant to this Article and are discussed. Himberg, supra note 48, at 3.

53. Id.

54. From this, it can be inferred that not all policy directives are mandatory. Id.

55. Stated differently, different lending circumstances have different operational requirements. Id. at 4.

56. Id.

57. Id.

58. African Development Bank Group, Integrated Safeguards System—Policy Statement and Operational Safeguards 7 (2013), https://www.afdb.org/fileadmin/uploads/afdb/Documents/Policy-Documents/December_2013_-_AfDB’S_Integrated_Safeguards_System__-_Policy_Statement_and_Operational_Safeguards.pdf.

59. Id.

60. Id.

61. Humphrey, supra note 7.

62. Id.

63. Himberg, supra note 48, at 8-9.

64. Policy-based lending refers to the concept of lending funds to accomplish specific policy goals, while programmatic-based lending refers to the concept of lending funds to accomplish goals set forth by a specific program. World Bank, OP 8.60—Development Policy Lending (2004), http://www1.worldbank.org/publicsector/pe/befa05/OP860.htm.

65. Himberg, supra note 48, at 8-9.

66. Id. at 9.

67. Id.

68. Id. at 10.

69. Id. at 11.

70. Id. at 12.

71. Id. at 12-13.

72. Id. at 13.

73. Springfield, supra note 35.

74. See generally Aldo Musacchio et al., The Role and Impact of Development Banks—A Review of Their Founding, Focus, and Influence 6 (2017), https://people.brandeis.edu/~aldom/papers/The%20Role%20and%20Impact%20of%20Development%20Banks%20-%203-9-2017.pdf (“despite this controversy, empirical research on development banks is scant”); see also José de Luna-Martinez & Carlos Leonardo Vicente, Global Survey of Development Banks 2 (World Bank, Policy Research Working Paper No. 5969, 2012), https://openknowledge.worldbank.org/bitstream/handle/10986/3255/WPS5969.pdf (“Despite their size and importance, little is known about development banks. Past research on development banks has focused on examining their performance and comparing them to private institutions. Other studies have examined the reasons for the failure of select development banks.”).

75. Kevin P. Gallagher & Fei Yuan, Standardizing Sustainable Development: A Comparison of Development Banks in the Americas, 26(3) J. Env’t & Dev. 243, 250 (2017), https://journals.sagepub.com/doi/abs/10.1177/1070496517720711.

76. “Bankability” refers to the idea that, without collateral resources, a project will not be financed no matter how feasible that project is from a legal or technical standpoint. Mendez & Houghton, supra note 11, at 7, §3.2.1.

77. Mendez & Houghton, supra note 11.

78. Id.

79. Id.

80. See generally Wright, supra note 14.

81. Id.

82. Nelson, supra note 6, at 15.

83. See generally Bretton Woods Project, What Are the Main Criticisms of the World Bank and IMF? 8-9 (2019), https://www.brettonwoodsproject.org/wp-content/uploads/2019/06/Common-Criticisms-FINAL.pdf.

84. Vanora Bennett, MDBs Pledge to Join Forces to Raise Annual Climate Finance to $175 bn by 2025, Eur. Bank for Reconstruction & Dev., Sept. 22, 2019, https://www.ebrd.com/news/2019/-mdbs-pledge-to-join-forces-to-raise-annual-climate-finance-to-175-bn-by-2025.html.

85. Id.

86. Id.

87. Id.

88. Id.

89. Asian Development Bank et al., High Level MDB Statement (2019), https://www.adb.org/sites/default/files/page/41117/climate-change-finance-joint-mdb-statement-2019-09-23.pdf.

90. Id.

91. Id.

92. Id.

93. Id.

94. Id.

95. Nelson, supra note 6, at 2.

96. Id. at 1.

97. U.S. Department of the Treasury, Multilateral Development Banks, https://home.treasury.gov/policy-issues/international/multilateral-development-banks (last visited July 17, 2021).

98. Rebecca M. Nelson & Martin A. Weiss, Congressional Research Service, Multilateral Development Banks: How the United States Makes and Implements Policy 1 (2014), https://fas.org/sgp/crs/misc/R41537.pdf.

99. Id.

100. Id.

101. Id.

102. Id.

103. Id.

104. U.S. Department of the Treasury, Loan Review Votes, https://home.treasury.gov/policy-issues/international/multilateral-development-banks/loan-review-votes (last visited July 17, 2021).

105. Id.; see generally U.S. Department of the Treasury, February 2020 Monthly MDB Voting Record 5, https://home.treasury.gov/system/files/206/February-2020-Voting-Record.pdf (for example, the United States in February 2020 did not support a power utility project in Tajikistan due to the lack of capacity to remove polychlorinated biphenyl (PCB)-contaminated oils).

106. Nelson & Weiss, supra note 98, at 1.

107. Id.; 22 U.S.C. §6593.

108. U.S. Department of the Treasury, Reports to Congress, https://home.treasury.gov/policy-issues/international/multilateral-development-banks/reports-to-congress (last visited July 17, 2021).

109. Nelson & Weiss, supra note 98, at 2.

110. Id.

111. Id. There are many criticisms surrounding the structure of this participation, but it is outside of the scope of this Article.

112. Id. at 12.

113. Id.

114. Id.

115. Exec. Order No. 14008, supra note 3.

116. Humphrey, supra note 7.

117. Exec. Order No. 14008, supra note 3.

118. Id.

119. Humphrey, supra note 7; Nelson & Weiss, supra note 98, at 1 (“As the largest financial contributor to the international financial institutions, the United States has a leading role in shaping the policies of the international financial institutions (IFIs), which include the International Monetary Fund (IMF), the World Bank, and the regional development banks.”).

120. Humphrey, supra note 7.

121. Nelson & Weiss, supra note 98, at 2.

122. Id.

123. U.S. Department of the Treasury, supra note 97.

124. Thwaites, supra note 1.

125. Id.

126. Alex Clark et al., Climate Policy Initiative, Implementing Alignment With the Paris Agreement: Recommendations for the Members of the International Development Finance Club 9 (2019), https://www.climatepolicyinitiative.org/wp-content/uploads/2019/09/Implementing-alignment-recommendations-for-the-International-Development-Finance-Club-_-Full-Report.pdf.

127. Thwaites, supra note 1.

128. UNEP FI, About Us, https://www.unepfi.org/about/ (last visited July 17, 2021).

129. UNEP FI, Signatories, https://www.unepfi.org/banking/bankingprinciples/signatories/ (last visited July 17, 2021).

130. UNEP FI, Principles for Responsible Banking, https://www.unepfi.org/banking/bankingprinciples/ (last visited July 17, 2021).

131. Id.

132. Humphrey, supra note 7.

133. Id.

134. Nelson, supra note 6, at 12.

135. Id. at 14-15.

136. Id. at 12.

137. Id. at 15.

138. Thwaites, supra note 1.

139. Id.

140. Carbis Bay Summit, supra note 8, §67.

141. Id. §41.

142. World Bank, Maximizing Finance for Development (MFD), https://www.worldbank.org/en/about/partners/maximizing-finance-for-development (last visited July 17, 2021).

143. Id.

144. Nelson, supra note 6, at 12.

145. Id.

146. Thwaites, supra note 1.

147. Alejandra Borunda, The Most Consequential Impact of Trump’s Climate Policies? Wasted Time., Nat’l Geographic, Dec. 11, 2020, https://www.nationalgeographic.com/environment/article/most-consequential-impact-of-trumps-climate-policies-wasted-time.

148. See generally U.S. Department of the Treasury, supra note 97 (“Treasury website is intended to promote transparency and implement sections 1504 and 1505 of the International Financial Institutions Act added by Public Law 108-199 (2004) and Public Law 109-102 (2005), respectively.”).

149. IATI, Home Page, https://iatistandard.org/en/ (last visited July 17, 2021).

150. Id.

151. Id.

152. IATI, Using IATI Data, https://iatistandard.org/en/using-data/ (last visited July 17, 2021).

153. Engen & Prizzon, supra note 30.

154. IATI, supra note 152.

155. Global Reporting Initiative, Home Page, https://www.globalreporting.org (last visited July 17, 2021).

156. Id.

157. Global Reporting Initiative, GRI Standards, https://www.globalreporting.org/how-to-use-the-gri-standards/gri-standards-english-language/ (last visited July 17, 2021).

158. Gaia Larsen et al., 4 Ways Development Banks Can Better Support the Paris Agreement, World Resources Inst., Dec. 4, 2018, https://www.wri.org/insights/4-ways-development-banks-can-better-support-paris-agreement.

159. Id.

160. Id.

161. Id.

162. Id.

163. Thwaites, supra note 1; see also Press Release, International Institute for Sustainable Development, Fossil Finance From Multilateral Development Banks Reached USD 3 Billion in 2020, but Coal Excluded for the First Time Ever (Mar. 30, 2021), https://www.iisd.org/articles/fossil-finance-multilateral-development-banks-reached-usd-3-billion-2020-coal-excluded (MDBs still funding projects that produce fossil fuels).

164. Carbis Bay Summit, supra note 8, §39.

165. Thwaites, supra note 1.

166. Alex Doukas & Elizabeth Bast, Oil Change International, Fossil Fuel Finance at the Multilateral Development Banks: The Low-Hanging Fruit of Paris Compliance (2017), http://priceofoil.org/content/uploads/2017/05/MDBs-Finance-Briefing-2017.pdf.

167. Id.

168. Id.

169. Equator Principles, The Equator Principles, https://equator-principles.com/about/ (last visited July 17, 2021).

170. Id.

171. Equator Principles, EP Association Members & Reporting, https://equator-principles.com/members-reporting/ (last visited July 17, 2021).

172. See Equator Principles, supra note 169 (stating that the European Bank for Reconstruction and Development and other MDBs are increasingly drawing on the same standards).

173. Id.

174. Id.

175. Id.

176. Sophie Edwards, World Bank to Report Aggregate Greenhouse Gas Emissions for the First Time, Devex, Oct. 14, 2017, https://www.devex.com/news/world-bank-to-report-aggregate-greenhouse-gas-emissions-for-first-time-91292.

177. Id.

178. Id.

179. Id.

180. Id.

181. Sophie Bartosch et al., Germanwatch & NewClimate Institute, Aligning Investments With the Paris Agreement Temperature Goal—Challenges and Opportunities for Multilateral Development Banks (2018), https://newclimate.org/wp-content/uploads/2018/09/MDB_WorkingPaper_2018-09.pdf.

182. Id.

183. SBTi, About Us, https://sciencebasedtargets.org/about-us (last visited July 17, 2021).

184. Monica Richter et al., SBTs for Financial Institutions, Asia Pacific Presentation (Nov. 25/26, 2019), https://sciencebasedtargets.org/resources/legacy/2020/01/SBTi-FI-Asia-Pacific-presentation-Nov-2019-.pdf.

185. Id.

186. See generally U.S. Environmental Protection Agency, Scope 1 and Scope 2 Inventory Guidance, https://www.epa.gov/climateleadership/scope-1-and-scope-2-inventory-guidance (last updated July 6, 2021) (describing that scope 1 emissions are direct GHG emissions occurring from sources controlled or owned by an organization, while scope 2 emissions are indirect GHG emissions from the purchase of energy from electricity, steam, heat, or cooling).

187. Richter et al., supra note 184.

188. Id.

189. Though the SBTi actually encourages companies to pursue a 1.5 degree Celsius goal. Id.

190. See generally U.S. Environmental Protection Agency, Scope 3 Inventory Guidance, https://www.epa.gov/climateleadership/scope-3-inventory-guidance (last updated July 6, 2021) (describing that scope 3 emissions result from activities that an organization indirectly impacts; they may be the scope 1 and scope 2 emissions of other organizations).

191. Richter et al., supra note 184.

192. Id.

193. Id.

In the spring of 1972, environmental law was still in its infancy in many places around the world. Here in the United States, NEPA, the Clean Air Act, and ELI itself were toddlers—all under three years old—and the Clean Water Act wouldn’t be amended to what we know it as today until that fall. Within this setting, the UN hosted the first global Conference on the Human Environment in Sweden. That June, participants from around the world gathered and, following two weeks of deliberation, produced the Stockholm Declaration of baseline environmental principles and an action plan for implementation. The declaration would prove a foundational document cited innumerable times in years to come.

Twenty years later, the global understanding was more complex, as nations and NGOs from around the world again gathered for an event popularly known as the Earth Summit. The resulting Rio Declaration reaffirmed the principles from Stockholm while weaving in a thick thread of sustainable development. The conference also adopted the Framework Convention on Climate Change and the Convention on Biological Diversity, formalized the Global Environment Facility, and launched the negotiations for the UN Convention to Combat Desertification.

This June, 50 years after the first conference, nations will return to Stockholm to further sustainable development and environmental protection. In a tumultuous time, two years into a pandemic and in the midst of the Russian invasion of Ukraine, this gathering is an opportunity for the global community to take stock of our progress on environmental challenges since 1972 and to identify the way forward.

And there has been progress. For example, powerful multilateral agreements have enabled the curtailment of chlorofluorocarbon emissions and helped us reduce the ozone hole in the atmosphere, supported the recovery of endangered species, and regulated trade of a number of hazardous chemicals and wastes to reduce their uncontrolled disposal into the environment. The list goes on.

But there is much more to do, and we are behind where we need to be to achieve the UN’s Sustainable Development Goals set for 2030. The world is facing increasing instability and violence, often related to natural resources, and the threat of what climate change will bring hangs over us all. That’s the setting for this new gathering.

Over the decades, ELI has contributed to the development and implementation of many international commitments, from regional agreements to global instruments, and participated in every decadal UN meeting since Rio. We are a leading facilitator of dialogue and action related to environmental peacebuilding, and we have trained thousands of judges in dozens of countries.

This is why ELI will be engaging in and hosting events at Stockholm +50. One area of focus is on deepening our work on judicial education, specifically on climate science. Faced with immense and complex challenges related to transforming economies and reducing climate impacts, judges around the world are being called on to step outside of traditional roles to use their judicial authority to help craft solutions. Our Climate Judiciary Project works to provide them with the necessary technical and scientific understanding related to climate impacts. And our work has shown us that it’s not just U.S. judges that express this need—international partners have asked for the same support. For us, Stockholm +50 is an opportunity to engage our global partners to better design resources and programs to support them.

The second area of focus is on environmental peacebuilding. War and peace have been a subtext throughout these conferences—the Stockholm Conference occurred during the Vietnam War, the Rio Earth Summit was held shortly after the Gulf War, and now Russia has invaded Ukraine in the run-up to Stockholm +50. In the decades since 1972, we have learned much about the diverse linkages between environment, conflict, and peace—and ELI has been a leader in this sphere. Stockholm +50 provides a unique and timely opportunity to take stock of those lessons and more clearly expand upon the essential peace dimension of sustainable development.

We know that international agreements are not a complete solution, but rather a first step. That once a new instrument is created, we must engage in robust implementation at regional, national, and local levels if real, durable change is to occur. So we look forward not just to Stockholm +50, and what may be produced there, but also the days that follow when we walk the path to implementation.

According to Kofi Annan, it is “perhaps the single most successful international agreement to date.” The then UN secretary general was describing the Montreal Protocol on Substances That Deplete the Ozone Layer, a treaty that has only gained in force and effectiveness in the nearly two decades since Annan’s proclamation. The accord has successfully protected life on Earth threatened by chemical releases that destroy the shield protecting our planet from dangerous ultraviolet radiation.

While less well known, at the same time the Montreal Protocol also has managed to avoid an enormous amount of global warming — some ozone-depleting substances like CFCs and HCFCs are also potent greenhouse gases. Indeed, when The Economist ranked the most effective strategies or events that resulted in the cutting of climate emissions, including the fall of the Soviet Union, China’s one-child policy, and the Kyoto accord on reducing greenhouse gases, the Montreal Protocol came out on top — achieving almost as much mitigation as all the other strategies combined. And the interesting news for readers of this magazine is the contributions of former ELI staff and board members who collectively helped make an aspirational treaty into an effective instrument for planetary protection.

In this article four of those former staff — Stephen O. Andersen, David Doniger, Alan S. Miller, and Durwood Zaelke — describe how important our time at ELI was, at a formative period in our careers. The Institute was the incubator of what later became a global network of collaborators in ozone and climate protection, and the beginning of friendships and professional relationships that have endured for decades.

The Montreal Protocol story started when Mario Molina and F. Sherwood Rowland sounded the alarm in their seminal 1974 article in Nature. They warned that CFCs could destroy stratospheric ozone through a series of catalytic reactions. Rowland and Molina became scientist-activists and publicly urged a halt in CFCs for non-essential uses. Consumers in North America and Scandinavia boycotted aerosol cosmetic and convenience products, which helped motivate governments to develop a framework agreement to start addressing the threat. The result was the Vienna Convention to Protect the Ozone Layer, approved in 1985. In 1987 the Montreal Protocol was added, initially with a commitment of a 50 percent phaseout of CFCs in 12 years and a freeze in halon production and consumption. A few years later the protocol mandated a full phaseout of an expanded list of almost one hundred substances. The protocol was strengthened by amendments several times.

Today, every UN member state is a party and is usually in full compliance, more than 99 percent of nearly 100 ozone-depleting substances have been phased out, and the ozone layer is on the path to recovery later in this century. In the United States alone, the phaseout is expected to prevent over 440 million cases of skin cancer, 2.3 million skin cancer deaths, and 63 million cases of cataracts for Americans born in the years 1890–2100, in addition to protecting agricultural and natural ecosystems from damaging radiation.

The injection of climate change issues into ozone-protection regimes traces back to a year after the Nature paper, when Scripps scientist Veerabhadran Ramanathan warned of the potent greenhouse gas properties of these chemicals. Thanks to the phaseout of ozone depleters, we know we will also avoid climate forcing equal or greater than the warming from all the carbon dioxide releases to date. Phasing down HFCs, the latest to be banned, alone will avoid up to 0.5°C of warming worldwide by the end of the century. Additional measures to improve air conditioner energy efficiency and reduce nitrous oxide emissions could avoid even more warming.

The 1970s were formative years at ELI, founded at the beginning of the decade at the same time as the nascent field of environmental law and policy. Durwood Zaelke started as one of the first two summer scholars in 1972 during law school, and then re-joined ELI as the acting editor-in-chief of the Environmental Law Reporter. After a stint with a big law firm in Los Angeles, Zaelke was invited to return to the Institute in 1975 to work on energy conservation law and policy. Alan Miller initially joined ELI in 1973 as a summer legal intern and returned as a staff member in 1974 to work on the new Clean Water Act and legal barriers to solar energy. Stephen O. Andersen joined in 1976 for a series of five books on energy conservation, and later a study of the Vermont Land Gains Tax following two years’ supporting the Sierra Club Legal Defense Fund. David Doniger joined ELI in 1978 before he was hired by NRDC, where he made his name.

For each of us, the introduction to environmental law and policy at ELI had lasting influence. The field was still in its infancy; the Environmental Protection Agency and Council on Environmental Quality had only been created at the beginning of the decade, and the recently passed National Environmental Policy Act, Clean Air Act, and Clean Water Act were all sources of new regulations and judicial interpretations. Fred Anderson, ELI’s first president, was a legendary mentor, starting every morning with a roundtable discussion of environmental news and strategy. The Institute gave credibility to the idea that a career could be built around resolving environmental issues, as the four of us would prove after leaving. Ozone wasn’t on the ELI agenda in those early years, but the collaborative atmosphere for research we developed there was a model for what each of us was to later do in other capacities in reducing dangerous emissions.

Andersen was first to encounter ozone-depletion science. Prior to joining ELI, as a graduate student at UC Berkeley in 1974, he assisted a federal study assessing climate impacts and depletion of stratospheric ozone from the proposed supersonic transport. The project was canceled in part because of those concerns.

Miller was an early advocate for action to regulate ozone-depleting compounds, starting in 1978 at NRDC by producing a background report for the second international meeting on stratospheric ozone later that year in Germany. He also worked with Rowland on congressional testimony and petitioned EPA to expand the ban on aerosol uses of CFCs to other applications. Upon joining the new World Resources Institute in 1985, he co-authored “The Sky Is the Limit: Strategies for Protecting the Ozone Layer.” From 1989 to 1997 he directed a center on global environmental issues at the University of Maryland that included multiple projects to address ozone depletion, including organizing with Anderson a conference on ozone and climate protection supported by NATO and multiple defense ministries.

Doniger’s work on ozone protection began at NRDC in 1984, when he filed suit against EPA for action against non-aerosol uses of CFCs. The result was an agreed-upon action plan. Ever since, Doniger has led the council’s ozone-protection program, including support for the protocol and subsequent amendments. NRDC’s concept of a 10-year global phaseout was adopted in 1990.

In 2006, Andersen sought ways to accelerate the phaseout of HCFCs. EPA and the Department of State suggested it was more appropriate for an NGO to lead such an effort, so he recruited Zaelke as the point man. Zaelke agreed — despite opposition from some NGOs who thought it a distraction from ongoing efforts to negotiate a climate protocol. He succeeded with the 2007 adjustment to speed the phaseout of HCFCs, providing climate benefits that were three to five times more than the initial commitments of the Kyoto Protocol. The Environmental Forum profiled Zaelke after that victory, noting that he “formed a North-South coalition that recently succeeded in broadening the Montreal Protocol to explicitly address global warming.”

Andersen, Doniger, and Zaelke also cooperated in petitioning EPA to prohibit HFC alternatives once necessary for fast phaseout of the worst substances but no longer needed because of new, superior technology. EPA agreed with the petition but was overruled when two fluorocarbon companies successfully appealed to the D.C. Circuit. The ELI trio, with the support of the suppliers and customers of HFCs, fought back and helped pass the Kigali Amendment to the protocol, bringing in HFCs to the ban list. They also promoted the American Innovation and Manufacturing Act passed in the waning days of the Trump administration to mandate HFC reductions. Shortly after taking office the Biden administration announced it would submit the Kigali Amendment to the Senate for ratification.

Andersen joined EPA to work on ozone protection in 1986 and rapidly rose to prominence as deputy director of the Stratospheric Protection Division. He also served as EPA liaison to the Department of Defense on ozone and climate. He then became director of strategic climate projects until he left the agency in 2009 to join Zaelke at the Institute for Governance and Sustainable Development. He founded and co-chaired the Montreal Protocol’s Technology and Economic Assessment Panel, bringing together hundreds of experts from diverse backgrounds, including industry, to identify substitutes for ozone-depleting compounds and the basis for subsequent agreements on accelerated phaseouts. His emphasis on voluntary, collaborative approaches enabled agreements with Soviet authorities on an ozone-mapping satellite, partnerships with the Defense Department on environmental measures, and a series of military conferences on eliminating ozone-depleting greenhouse gases. Prior to leaving EPA, Anderson was awarded the Service to America Career Achievement Medal, the nations’ highest award for public service, as well as awards from the governments of Iraq, Japan, Thailand, Vietnam, and the former USSR, the only non-Soviet citizen to win the award.

Zaelke’s impact on international environmental law began in 1989 when he co-founded the Center for International Environmental Law, as well as the International and Comparative Law Program at American University’s Washington College of Law. He also co-authored the law school textbook International Environmental Law & Policy. In 2003, he founded IGSD to focus on fast-action climate mitigation, including phasing out short-lived climate pollutants to reduce warming in the next two decades, at the same time co-founding a similar program at the Bren School of Environmental Science & Management at UC Santa Barbara. Zaelke has co-authored numerous articles on short-lived climate pollutants with some of the leading scientists in the world. With Molina, his calculation that phasing down HFCs could avoid up to 0.5°C of warming by the end of the century became a key part of the strategy by President Obama and Secretary of State John Kerry to produce a global consensus on the Kigali Amendment. Zaelke and Andersen earned UN and EPA awards for their diplomatic and scientific leadership in support of the amendment.

While their careers took different directions, the four ELI alumni have repeatedly come together. In the 1990s, Miller, Andersen, and Zaelke collaborated on several projects. In addition to their successful efforts in support of the Kigali Amendment, Andersen and Zaelke co-authored Industry Genius: Inventions and People Protecting the Climate and Fragile Ozone Layer, published in 2003, as well as numerous articles. Miller and Doniger reunited to propose strategies for linking HFC reductions with measures to improve energy efficiency in air conditioning, a rapidly growing source of demand for power and carbon emissions globally. In 2020, Zaelke and Molina co-chaired the definitive assessment of the combined climate benefits of improving energy efficiency of cooling equipment during the phasedown of HFCs, with contributions from Andersen and Miller. And this year Miller, Andersen, and Zaelke joined forces again to co-author the book Cut the Super Climate Pollutants Now! making the case for urgent actions.

ELI is globally recognized for its influential publications, conferences, and projects, but as early insiders we would argue that its influence has been magnified many times over by the attraction, incubation, and networking of its management, staff, and members across the broad field of environmental protection. TEF

When I first came to Washington in the 1980s, I heard references to leakage from contacts in the World Bank. I wondered how it could be that a well-funded institution like the bank would not maintain its plumbing — wasn’t it time to fix the leaky toilets and faucets immediately and reduce the water bills? Of course leakage was the widely used euphemism even then for corruption. Over the decades leakage has grown, despite greater awareness and intermittent reforms in the transparency of the bank and other aid agencies. The initial institutional response often remains denial, and the cold light of continuing research reveals that reforms have often had little effect.

In February, the chief economist of the World Bank, Yale professor Penelope Goldberg, resigned after only 15 months on the job. Goldberg’s departure, according to the Economist and Financial Times, appeared to be connected to frustration with the alleged suppression by bank management of a report documenting substantial increases of capital flight to tax havens directly following disbursements of bank loans and other foreign aid.

The bank subsequently did publish the paper (“Elite Capture of Foreign Aid: Evidence From Offshore Bank Accounts”), and its findings are troubling. It examined disbursements to 22 borrowing nations with a high dependence on foreign aid, and increases in financial flows from the same countries into offshore financial tax havens, finding an “implied leakage rate [of] around 7.5 percent for the sample.” Leakage increases to over 15 percent for the most aid-dependent nations, where foreign assistance accounts for more than 3 percent of GDP.

According to the paper, “The results are consistent with aid capture by ruling elites; diversion to secret accounts either directly or through kickbacks from private-sector cronies can explain the sharp increase in money held in foreign banking centers specializing in concealment and laundering.” The authors, affiliated with universities in Norway and Denmark, state that their analysis is “consistent with the view that very high levels of aid” may actually “foster corruption and institutional erosion.”

These findings are of great relevance for the increasing flows of bilateral and multilateral aid for environmental purposes. For one thing, a significant part of environmental aid to conserve biodiversity goes to poorer countries with threatened ecosystems — for example tropical forests in the Democratic Republic of the Congo, Madagascar, or Papua New Guinea. Substantial aid has gone for climate finance where there have been well-publicized problems of environmental integrity — is the aid financing real net environmental benefits? — and corruption. The Kyoto Protocol Clean Development Mechanism, the U.N./World Bank Reduced Emissions for Forest Destruction and Degradation (REDD+) programs, and the UN Green Climate Fund are among the climate finance instruments where concerns over environmental integrity and leakage have arisen.

In 2005, the Senate Foreign Relations Committee found that as much as 30 percent of multilateral development bank lending may be leaked — stolen by borrowing country national elites and their collaborators and facilitators often based in rich countries. The bank established a Department of Institutional Integrity to investigate corruption in bank projects in 2001, but from the beginning even this modest initiative encountered resistance from major borrowers whose governments complained of an infringement on sovereignty.

In 2007, the bank’s executive board commissioned former U.S. Federal Reserve head Paul Volcker to lead an independent evaluation of the integrity department. After submitting his report, Volcker told the Financial Times that there was “ambivalence in the bank as to whether they really want an effective anti-corruption program or not.” Many on the board as well as in the operational staff feared that “a strong anti-corruption effort would be anti-development.” Volcker concluded that “the bank does not lack for units reviewing and evaluating its varied operations,” but, he added, “a strong focus on managerial and institutional accountability is lacking.” The circumstances surrounding Goldberg’s departure indicate that Volcker’s concerns are still at least partly valid.

The new bank leakage report observes that a decade of OECD-driven reforms have enhanced financial transparency in rich country tax havens, but nevertheless its sample data for 22 nations produced “no clear signs” of reduction in the leakage and theft of aid.

The World Bank is hardly the worst example of leakage. In fact, because of its increasing transparency and the degree of outside scrutiny it attracts, the bank probably ranks among the best-managed international institutions — which is both the proverbial good news and bad news.

I will outline the potential international institutions that might govern one of these two categories of geoengineering that we’ve been discussing, carbon dioxide removal, both in terms of research and, later, the governance issues in deploying these approaches.

There have been two international regimes to date that have sought to regulate geoengineering. The first is the Convention on the Prevention of Marine Pollution by Dumping of Waste and Other Matter, which is usually referred to as the London Dumping Convention, and its associated protocol, and the Convention on Biological Diversity. The impetus for both of these regimes was the small-scale fertilization experiments that were being conducted by private parties and academic institutions that seeded small patches in the ocean with iron to induce phytoplankton production to take up carbon and sequester substantial amounts on the bottom of the ocean.

The parties to the London Dumping Convention passed a resolution in 2008 classifying ocean iron fertilization experiments as an activity other than dumping. However, at the same time it placed serious restrictions on those activities, limiting them to legitimate small-scale scientific research. Ultimately, in 2010 the parties did develop an environmental assessment framework that could conceivably be used for other kinds of geoengineering experiments.

As resolutions, these measures are not legally binding on the parties. However, the 47 parties to the protocol subsequently adopted an amendment establishing legally binding regulation of ocean geoengineering in a number of different ways.

First, the amendment would expand the potential purview of what could be regulated beyond ocean iron fertilization to all “marine geoengineering activities,” defined broadly as deliberate intervention of the marine environment to manipulate natural processes. Second, it would require permits issued by the parties to the convention before such activities occur, including a requirement to limit or reduce potential pollution in the marine environment “as far as practicable.” Third, permits are limited to legitimate scientific research and there can be no pecuniary gains. Finally, the amendment establishes a risk assessment framework, plus relevant monitoring and reporting to the secretary of the convention and to the other parties.

While this amendment to the protocol would be legally binding and would substantially expand the purview of what could be regulated under the London Dumping Convention, there are some big limitations. It would be restricted to marine-based approaches. Further, this regime has no particular expertise in the context of geoengineering. It has a limited number of parties, only half the number of the convention. Perhaps most importantly the amendment to the protocol will only come into force when two-thirds of the parties have adopted it. To date only five parties have adopted this amendment. So at this point the London Dumping Convention’s governance is largely restricted to recommendations with, again, a focus on marine geoengineering activities.

The Convention on Biological Diversity has also scrutinized ocean iron fertilization. The parties passed a resolution in 2008 that called for compiling scientific information on such fertilization, which the regime has been doing on a pretty regular basis. In 2010, the CBD passed a resolution to regulate geoengineering research, again restricting it to “small scale scientific research.” Notably, the CBD is not closing expansion of geoengineering activities in the future.

Also notably this is a pretty capacious definition of geoengineering, unlike under the London Dumping Convention, which is restricted to materials placed in the oceans. The CBD measure governs any technologies that deliberately reduce solar insolation, which would encompass solar radiation management approaches, or that increase carbon sequestration on a large scale.

But the CBD also has some serious limitations. First of all, as is true with the London Dumping Convention, these are not legally binding resolutions on the parties. Second, again, this is a regime that doesn’t have any particular expertise in this field. Third, and maybe most importantly, the focus of the regime is on the potential impacts of geoengineering activities on biodiversity. So it’s not likely to focus on issues such as the impacts that some of these activities might have on human health, or social justice implication, such as impacts of diverting large amounts of land and potentially raising food prices for some of the world’s most vulnerable.

Finally, quite frankly this has been a relatively feckless regime. It hasn’t done a particularly good job of arresting the decline of biodiversity. And so one would be hard-pressed to be particularly effective in addressing this issue, which is arguably outside of its purview.

The question arises as to what other potentially pertinent regimes and principles might govern carbon dioxide removal approaches at the international level in the future. Probably one of the most logical ones would be the climate regime, right?

If we were to utilize climate geoengineering options in the future, presumably we would be doing it as part of a suite of responses in which we would seek to radically reduce our greenhouse gas emissions, adapting to climatic impacts that are inevitable, and deploying these approaches to presumably buy us time or to help us in so-called overshoot scenarios where temperatures exceed the targets of the Paris Agreement. Since we would be seeking to reduce temperatures by drawing carbon out of the atmosphere, the Paris regime would seem pertinent.

The initial question is whether the parties could include carbon dioxide removal options in their pledges, their so-called Nationally Determined Contributions. Well, if you look at Article 4 of the agreement, it says the parties are to prepare these NDCs and pursue domestic mitigation measures to achieve the objectives of such contributions.

Now, while the term mitigation strangely enough is not defined in the Paris Agreement, it is in its parent agreement, the UN Framework Convention on Climate Change. The convention defines mitigation as limiting emissions of greenhouse gases and protecting and enhancing greenhouse gas sinks and reservoirs. So to the extent that carbon dioxide removal options are a way to protect and enhance sinks by taking carbon dioxide from the atmosphere, it would seem that it would be one of the potential forms of mitigation that could be incorporated into parties’ NDCs. This is also consistent with Article 5 of the agreement, which expressly calls for the parties to take action and conserve and enhance sinks and reservoirs of greenhouse gases.

Paris could also be invoked to regulate the use of carbon dioxide removal by parties in several ways that might be pertinent. First of all, in the preamble it indicates that when measures are taken to address climate change there is a need to “respect, promote, and consider” obligations in terms of human rights.

Some of the carbon dioxide removal approaches we’re talking about could have human rights implications. For example, large-scale use of bioenergy with carbon capture requires huge diversions of agricultural lands for bioenergy feedstocks, which some people argue could massively raise food prices. Some have argued that this could potentially contravene the human right to food.

Bioenergy with carbon capture deployed at large scale also might require as much water as all the water that we currently use for irrigation. As a consequence, it could have implications for the human right to water. To take another example, ocean iron fertilization might undermine fisheries, which could have implications in terms of rights to subsistence and development.

Finally, there are customary international law principles that would be pertinent at least to large-scale deployment of these techniques. This includes the precautionary principle, which arguably could cut either way, either limiting geoengineering deployment or requiring it to offset dangerous climate change, and the no-harm principle where transboundary impacts might occur.

The Institute’s innovative environmental peacebuilding program integrates natural resource management with conflict prevention, mitigation, resolution, and recovery to build resilience in affected communities. Pioneered by ELI, this field of scholarship and practice now builds on decades of work by the Institute and others.

In the early 1990s, ELI led a diplomatic effort in the Gulf of Aqaba, bringing together Israelis, Egyptians, Jordanians, Saudis, and others to develop a regional vision for protecting the region’s fragile environment. The collaboration was codified in the 1994 Israel-Jordan Peace Treaty.

Later in the decade, the Institute coordinated a global assessment of the state of legal, scientific, and economic approaches to addressing the environmental consequences of war. The research informed the United Nations Compensation Commission as it adjudicated environmental claims against Iraq for its illegal invasion and occupation of Kuwait in the 1990-91 Gulf War.

In 2004, ELI engaged with Liberia to reform its forestry sector. The UN Security Council had imposed sanctions on the nation’s timber, and the Institute helped Liberia’s government, civil society, and partner organizations develop a common vision and a revised legal framework to restore the country’s forestry sector.

In the process, ELI introduced notice-and-comment rulemaking to Liberia (which is now a requirement for all forestry-related regulations), and then became involved in building the capacity of government, civil society, and communities to deal with environmental problems.

As a result of this work, ELI realized that operating in these conflict-affected settings differed substantially from that in other developing countries, and furthermore that there was then little analysis about how conflict dynamics should shape assistance to those countries.

With UN Environment, the University of Tokyo, and McGill University in Canada, ELI led a global initiative to take stock of experiences in post-conflict peacebuilding and natural resource management. The ensuing 150 case studies and analyses in six edited books runs to 3,900 pages — an unprecedented body of knowledge on these issues.

ELI and UN Environment have since been incorporating their learning into operational guidance for United Nations bodies, the African Development Bank, and other institutions. That scholarship and experience also has informed ELI’s technical assistance and capacity building in Lebanon, Timor-Leste, South Sudan, Sierra Leone, Myanmar, Colombia, Jordan, and other fragile and conflict-affected countries.

The ramping up of environmental peacebuilding in ELI’s policy portfolio over the years eventually led to the development of an enduring conceptual and institutional framework that brings together people from varied disciplines and geographies. The Institute created the Environmental Peacebuilding Knowledge Platform (environmentalpeacebuilding.org), the Environmental Peacebuilding Community of Practice (with more than 3,700 members globally), a biweekly Environmental Peacebuilding Update (now in its sixth year), and the Al Moumin Award and Distinguished Lecture for thought leadership in environmental peacebuilding.

More recently, the Institute supported the UN’s International Law Commission in codifying international law protecting the environment in periods before, during, and after armed conflict. ELI staff briefed the UN Security Council.

And ELI and partners delivered a massive open online course on Environmental Security & Sustaining Peace, with 17,000 people from 176 countries enrolling in the course in 2018 and 2019. ELI and partners launched the Environmental Peacebuilding Association, a professional society with individual and institutional members in more than 55 countries. In October, the association convened the First International Conference on Environmental Peacebuilding, marking a pivot point as ELI and partners transition to a more integrated and enduring suite of efforts to learn, build capacity, and improve practice.