World Bank nominee Banga is a ‘big believer’ in climate science

Ajay Banga in Washington, D.C., in May 2021. MUST CREDIT: Bloomberg photo by Ting Shen

The White House’s nominee to lead the World Bank said there’s sufficient scientific evidence that burning fossil fuels contributes to climate change, seeking to address criticism about the lender’s commitment to the issue.

“There’s enough scientific evidence that I’m a big believer in,” Ajay Banga said in a group interview Thursday at the U.S. Treasury Department, adding that poverty alleviation and environmental issues are “intertwined.”

Banga added that he’s preparing to embark on a three-week trip to both creditor and borrower nations to shore up support for his nomination. Stops will include Africa and Europe as well as China, the largest lender to developing economies.

While the official nomination process to replace current President David Malpass opened just a week ago – and the bank has signaled that the final selection may not come until early May – Washington’s candidate has traditionally taken the top spot at the World Bank, where the U.S. is the largest shareholder. Malpass, who was nominated by President Donald Trump, last month unexpectedly announced that he plans to leave by the end of June.

It also comes as Treasury Secretary Janet Yellen is pushing an evolution of the development lender from its traditional focus on country-specific lending toward efforts like fighting climate change.

One of Banga’s key challenges over the coming weeks will be to appease critics who have questioned whether he’s the right pick for the job.

While his nomination drew praise from high-profile climate allies including the U.S. special presidential envoy John Kerry, it also raised eyebrows among groups that view him as someone who hews too closely to the typical mold of male World Bank presidents with deep ties to Wall Street and corporate America.

“Climate change is not just greenhouse gases,” Banga said in the interview. “It’s also the quality of water development. It’s soil, it’s biodiversity, it’s carbon capture. There’s a lot of things involved in those two simple words of climate change, and I think we need to focus attention on them for sure.”

Banga, 63, currently serves as vice chairman at U.S. investment firm General Atlantic. Before that, he spent a decade as president and chief executive officer of Mastercard. He also held various positions at Citigroup, including as CEO of the Asia-Pacific region.

The World Bank’s next president will be tasked with reforming the almost 80 year-old institution, a process spurred along by a Group of 20 review released last year and promoted by Yellen.

Among other recommendations, the bank has been urged to tackle global and transnational issues, particularly climate change, and expand its so-called capital adequacy, allowing it to share more funds and take on more risk, all while continuing its traditional role of poverty reduction and project finance.

Banga’s nomination comes at a time when the World Bank and its twin Bretton Woods institution – the International Monetary Fund – face growing demand for their assistance, with 60% of low-income nations at or near debt distress on hundreds of billions of dollars of loans.

The World Bank is at the center of a major debate over how to overhaul the framework overseeing the treatment of the debt for low-income countries. The issue of debt relief has emerged as yet another front in an increasingly bitter geopolitical tussle between China and the U.S., with the former demanding loans made by the World Bank and other multilateral lenders be included in any restructuring.



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