“The World Bank is not built to fight an existential, humanity-threatening climate crisis.”
It’s past midnight on a fine spring evening in Bilbao. Just off an elegant square in this ancient city in Northern Spain, a lively group of bankers from the World Bank and International Financial Corporation clinks shots of the fiery Basque digestive, Patxaran, after a boisterous meal of Joselito shoulder of pork with tomato, grilled cod with ratatouille, Iberian beef cheeks, and finished off with bowls of baked crème Catalana.
They were celebrating in a city that just a few decades ago experienced a total economic, environmental and political collapse. Bilbao had been given up for dead — a rotting, post-industrial hellscape whose only exports were fleeing capital and Basque insurrectionist terror.
That was until October 1997, when the titanium-sheathed, Frank Gehry-designed Guggenheim Museum opened, stunning the world with both its innovative design and bizarre location.
But its impact went far beyond being an instant architectural masterpiece, and it has so confounded architects and policymakers that it is now called the “Bilbao effect.”
The Green City
The museum was part of an audacious gamble by the city that it could transform itself from an urban ecological wasteland, not with coal and steel but art and beauty. And 25 years later, the city has indeed turned its industrial brownfield sites into a new, walkable city that eagerly embraces a new, green economy.
Have no doubt: Bilbao is still a work in progress, full of faults and human foibles. But for the 1,000 bankers, policymakers and technocrats who descended on the city for the World Bank’s annual climate conference, it was also a sign of hope. It is a shining example of the kind of transformative ecological, economic and social impact they hope to implement on a global level to fight climate change.
A challenge of the ages
The task set before this new generation of technocrats dwarfs any challenge humans have ever faced.
To understand the sheer scale and complexity of the task, here is just a taste of the dozens of workshops and plenary sessions that took place inside Bilbao’s vast trade center: Accelerating climate finance at scale; mobilizing the African Green Bank; advancing high-intensity voluntary carbon markets; scaling up disaster-risk reduction; financing the coal transition; the legal nature of carbon credits; greening the financial sector in Latin America; climate finance in real estate; empowering local communities through carbon finance; climate mitigation through innovative food systems; technologies to decarbonize island grids; financing clean cooking.
The Banga World Bank has a choice: It can cling to its industrial age past, or transform itself the way Bilbao did a generation ago.
It is a project that intimidates even the most seasoned World Bank executives, for they know the World Bank was not built to fight an existential, humanity-threatening climate crisis.
Undoing 75 years of work
If anything, the World Bank has spent the last 75 years building the dams, coal mines and steel plants it is now trying to transition away from.
In a few weeks the new World Bank President, Ajay Banga, will inherit a staff anxious to get stuff done, but deeply skeptical that the vastly complex Bank is configured to drive this kind of transformational change. “Trillions, not billions are needed and the Bank is not remotely able to mobilize that kind of capital,” said one senior Bank official.
But that has not stopped the non-stop discussions on what to do if the money magically appears. The Bank’s new-age technocrats are ready to unleash thousands of new policies that, if funded, will be a powerful force of change.
And somewhere in there, they are convinced, will be the project or projects that catalyze a global “Bilbao effect.”
The Banga World Bank has a choice: It can cling to its industrial age past, or transform itself the way Bilbao did a generation ago.
The former will accelerate the climate crisis; the latter will require Banga to learn to walk on water.
