David Malpass steeping down as the head of the World Bank
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March 7, 2023
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David Malpass steeping down as the head of the World Bank

Malpass steps down as head of the World Bank after increased pressure following his approach to climate change.

The role of the World Bank

It is commonly accepted that the World Bank is the most important global financial institution on the planet. It can influence the policies of countries all over the globe and it has done precisely that since the time of its creation, opening the path towards neoliberal globalization in its mission to combat global poverty. Whether or not the institution has been successful in achieving this, the World Bank still has retained a major say over policies. The World Bank’s mission to reduce poverty and promote economic development is closely intertwined with climate change, so for that reason, the World Bank has been a partner in our fight against climate change. They are the biggest multilateral funders for climate change investments in developing countries. They’ve provided over $109 billion in a 5-year period from 2016-2020 in climate finance. They’ve also committed to provide at least $25 billion a year until 2025 for the climate change efforts. They’re dedicated to helping countries and companies move in accordance with the goals in the Paris Agreement. From 2016 to 2020, they have also financed 34 gigawatts of renewable energy to help countries in development. They’ve also helped increase climate adaption support.

David Malpass steps down

The current head of the World Bank, David Malpass, just announced that he will step down as the head of the World Bank. Despite the World Bank’s contribution in the fight against climate change, Malpass has been called a climate change denier by many, including Al Gore. Last year, the white house rebuked him after saying he didn’t know whether fossil fuels were causing climate change. He apologised for the statement but never really stated the opposite. He was appointed in 2019 and will step down in June of this year, cutting short his five-year term. This move no doubt shows us important signs that need to be taken into consideration. The atmosphere formed around financial institutions such as the World Bank seems to be one which does not tolerate anything less than absolute belief in its mission to fight against climate change. This is a good signal for the rest of the world and the developing world as well. It also signals that the end of easy-going climate policies might hopefully be near. With a new devoted head of the world bank, the organisation can step their climate game up. For investors this might mean that companies relying on carbon emissions will continue to be more restricted than ever as the pressure to cut emissions will continue to increase, especially with a devoted World Bank at full force for the cause. The US is very likely to pick a head of the World Bank who will be fully on par with the fight against climate change, mainly because Biden officials already tried to oust Malpass for being weak on climate change. This change in the head of the World Bank can prove to be crucial in our accelerated efforts to meet the goals set out in the Paris Agreement.