Multilateral energy lending and urban bias in autocracies: promoting fossil fuels

Energy demand is growing rapidly across the world, and international funding agencies like the World Bank have responded by emphasizing energy in their project portfolios. Some of these projects promote the use of fossil fuels, while others support cleaner forms of energy. For climate change mitigation, it is important to understand how international funders decide on the choice between fossil fuels and cleaner sources of energy. Examining the energy funding portfolios of the nine most important international funders for the years 2008-2011, we show that funding for fossil fuels has been concentrated in highly urbanized autocracies. Due to economies of scale, fossil fuels are suitable for generating heat and electricity for densely populated urban areas. Autocratic rulers are subject to urban bias in their policy formulation because the support of concentrated urban constituencies is key to an autocrat’s political survival, and in democracies environmental constituencies can effectively oppose fossil fuel projects.