A Decade Lost: World Bank Study Admits Failure To Curb Deforestation

An historic World Bank study has found Bank projects continue to harm the world’s forests, despite a protective policy adopted 10 years ago and a 78 percent increase in forest-related lending over the past 8 years. The study also points to trade liberalization and globalization as the major drivers of deforestation. World Bank President James Wolfensohn is scheduled tomorrow to address a Bank meeting in Washington to discuss the study’s findings. The report can be found on the on the internet at: http://wbln0018.worldbank.org/oed/oedevent.nsf/htmlmedia/announcements.html

“This is one of the most important documents on forest policy the Bank has issued in a decade. It shows the Bank has failed to comply with its own 1991 Forest Policy to protect the world’s forests and alleviate poverty,” said Korinna Horta, Environmental Defense senior economist. “As a result, the world’s leading development institution has lost an entire decade in which it could have been working to curb deforestation and address the needs of the poor.”

“The recognition that globalization and corruption are causing deforestation presents a welcome and fundamental shift away from the World Bank’s previous thinking, which pointed to poor people in developing countries as the main culprits,” said Horta. “Unfortunately, the majority of the World Bank’s own lending consists of structural adjustment loans that promote the very economic policies that are accelerating deforestation.”

The World Bank adopted a Forest Policy in 1991 that committed the institution to pay close attention to the impacts on forests of its multi-billion dollar annual investment portfolio. The new World Bank study shows that the promised approach to forests was ignored when lending for economic policy reforms, and the impacts on forests of Bank-financed projects have not been monitored. Contrary to the 1991 Forest Policy, the new World Bank study also documents how the Bank has largely failed to promote poverty alleviation through its forest-related loans and estimates that only one quarter of the projects financed are likely to be sustainable.

While social justice and environmental advocates praise the study’s findings, they strongly disagree with the conclusions the World Bank has drawn from them: that the 1991 Forest Policy’s precautionary approach is to blame for the failure in the forest sector.

“The real failure is in the World Bank staff’s lack of compliance with the 1991 policy,” said Marcus Colchester, director of Forest Peoples Programme, a UK-based organization. “This study proves yet again that the Bank must end its culture of emphasis on simply getting money out the door, and instead implement projects that truly address poverty and don’t harm the environment. That means a bold revision of staff incentives so that staff are encouraged to adhere to policy and penalized when they don’t.”

Environmental Defense, a leading national, NY-based nonprofit organization, represents 300,000 members. Environmental Defense links science, economics, and law to create innovative, equitable and economically viable solutions to today’s environmental problems.

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