Feb 24, 2023 - Energy & Environment

Unpacking Biden's World Bank surprise

Illustration of hands opening a wallet to reveal Earth in the shape of a coin

Illustration: Annelise Capossela/Axios

White House officials say Ajay Banga — President Biden's choice to head the World Bank — is poised to transform its climate work, but his resume is something of a Rorschach test on this claim.

Catch up fast: Banga is a former Mastercard CEO and is currently vice chairman at private equity giant General Atlantic.

  • Banga's extensive corporate background includes roles at Citigroup and other big companies.
  • He would replace the outgoing David Malpass, who announced earlier this month that he will step down before his term ends.

The big picture: A few key things to know...

He has a climate background — in the background. Banga's not a prominent figure in global warming circles, but he boosted climate initiatives at Mastercard.

  • He's also an adviser to BeyondNetZero, a major climate investment fund General Atlantic launched in 2021.

The White House rollout elevated climate. Officials made clear Thursday that they want Banga to deliver on the bank's "roadmap" to make climate central to its mission.

  • They argue his private sector resume is fit for the goal of transforming the bank, a big ship to turn. "The climate crisis requires new thinking and creative vision regarding finance," climate envoy John Kerry said.
  • Treasury Secretary Janet Yellen said Banga has a history forging ties between the private and public sectors and NGOs that "equips him to help mobilize the private capital and press for the reforms needed to meet our shared ambitions."

The climate movement response was mixed. Some progressive groups attacked the choice, disputing White House arguments that his corporate background is an asset.

  • Friends of the Earth called for a "female candidate with extensive background in human rights, environmental advocacy and sustainable energy development."
  • But others praised the choice. Sonia Dunlop of the think tank E3G cited his statements on the urgency of climate action, and said he'll be a "fresh pair of hands at the wheel" of what she hopes will be a greener bank.

What's next: Banga, if approved by the bank's board, will be under pressure to make good on elevating climate — which has already had a rising profile at the bank — alongside its traditional anti-poverty focus.

  • Yellen wants development banks to better address "borderless" challenges and further expand beyond traditional country-based lending models.
  • Another thing to watch: Barbados Prime Minister Mia Mottley's high-profile proposal for greater climate finance from multilateral development banks and on more favorable terms.

The intrigue: Axios' Felix Salmon points out that fighting climate change demands far more money than even a more climate-focused bank can provide.

  • For instance, he notes Mottley's goal of an additional $1 trillion for climate resilience would require plenty of private-sector money — and Banga's decades at Citigroup, Mastercard, and General Atlantic will come in very handy.

Zoom out: One of the World Bank's central challenges is how to reconcile the goals of boosting prosperity in developing nations while also trying to curb emissions, Ben writes.

Emissions are strongly correlated with income on a global scale, as a newly released International Energy Agency analysis shows.

Zoom in: The very top income brackets are responsible for a vastly outsized share of emissions.

  • But, more relevant to the bank's work, the analysis also shows how carbon and wealth generally move in tandem as quality of life improves.
  • "The bottom 10% of emitters globally live in developing economies in Africa and Asia, where they consume relatively small amounts of goods and services, and in many cases lack access to electricity and clean cooking."
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