A new Counter Balance report, 'Banking on carbon markets – Why the European Investment Bank has got it wrong in the fight against climate change' reveals that the EIB pledged €589 million for six different carbon funds in which it is active. This is highly controversial as carbon trading does not contribute to emission cuts.
The report gives a unique overview of the EIB’s different climate funds and the damaging role that the Bank plays in climate finance.
Joseph Zacune, the author of the report said: “As shown in this new report, a solid body of evidence provides testimony that carbon markets fan the flames of climate change by allowing European and other rich industrialised countries to avoid their commitments to reduce emissions. The EIB has a portfolio of carbon offset projects which includes gas flaring, large dams and carbon forestry schemes that could unleash widespread land grabs. This makes a mockery of the EU’s claims to be trying to save the climate.”
Although global carbon markets have been valued at over $100 billion in the last few years, the main beneficiaries are carbon traders, brokers, verifiers and project developers as only 0.5% of the money in the main carbon markets has actually reached offset projects in developing countries.
Elena Gerebizza from CRBM  said: “Another problem is that carbon trading dangerously distracts the attention from real climate action. Money is largely flowing into speculative derivatives markets instead of going to sustainable projects that actually reduce emissions. Offset projects at best cancel out the high emissions in Europe, making it a zero sum game. However, in reality, many offset projects also harm communities and the environment.”
Counter Balance believes the role of the EIB in fighting climate change lies elsewhere.
Gerebizza adds: “Instead of propping up carbon markets, the EIB could play a role in transforming public infrastructure to curb emissions in Europe. This would start by phasing out support for fossil fuel projects and reassessing the carbon footprint of EIB’s portfolio in order to strategically change the interventions of the Bank in the energy, transport and industrial sectors in Europe.”
A summarised briefing of the report in coordination with FERN is available here
 Campagna per la Riforma della Banca Mundiale (CRBM) is one of the six members of the Counter Balance coalition. The other members are Both Ends (the Netherlands), Bretton Woods Project (UK), urgewald (Germany), Les Amis de la Terre (France) and CEE Bankwatch Network (Czech Republic).