The IDB has a similar chequered past, in terms of funding projects that are accused of stimulating deforestation, such as the old BR 364 Highway into the Brazilian Amazon, and the more recent Camisea gas pipeline in Peru. But their energy lending portfolio has been tending away from oil drilling and other fossil fuel development for years,20 and their investments in large hydro projects have dropped from US$206 million in 2001 to less than US$100 million in 2007. On the other hand, our analysis of their loans showed almost no renewable energy or small-scale hydro projects in 2001 or 2007. Instead, they are facilitating the technical assessment of scores of proposed infrastructure projects in South America under the rubric of the initiative for Infrastructure Integration for the Region of South America (IIRSA). This conglomeration of up to 400 waterways, ports, dams, roads and reservoirs has been called a 'giga-project' by observers in the region because of its unprecedented breadth and scope. The potential for forest destruction in the Amazon and other areas as a consequence of the synergistic and cumulative impacts of all these major works, and the related agriculture production that they are aimed to stimulate have not been fully evaluated. But observers expect massive new greenhouse gas emissions and regional rainfall pattern changes as a result.
As a new direction, the IDB recently launched a Sustainable Energy and Climate Change Initiative (SECCI) that is based on four 'pillars':
1 promoting renewable energy and efficiency;
2 biofuels development;
3 increasing access of its borrowers to carbon finance; and
While biofuels production can be a source of additional greenhouse gas emissions if land-use change is stimulated,21 the other pillars are essential and positive new directions for the IDB and we will follow their development with interest. But it is impossible at this juncture to tell if this initiative will be significant enough to actually influence the overall lending portfolio. The real question for the institution, just as noted above for the World Bank, is not whether another finance mechanism is added to the mix of new carbon 'gizmos', but whether the overall lending decisions and policy advice in the sectors of energy, agriculture, transportation and others actually assist countries to move away from traditional greenhouse gas intensive development. Significantly, the SECCI doesn't yet propose lending targets or have any other goals for influencing the mainstream operations of the IDB to ease the transition to a low carbon future.
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