The World Bank has been arguably the planet's greatest threat to environmental stability . Bank projects that have cut down forests have done enormous ecological damage the world over. It is now known that 20% of greenhouse gases have come from deforestation, which is more than the entire transportation sector . The current World Bank strategy of replacing forests with monoculture plantations such as eucalyptus is a profit-driven strategy, which dispossesses forest people from critical sources of food and fodder. The energy-intensive development projects the Bank promotes in agriculture, urban development and infrastructure are antithetical to a sustainable way of life. The Narmada Valley project alone shows the scale of ecological and human disaster wrought by World Bank projects and development policies. The fact that the World Bank pulled out of this project and the project continues under government sponsorship exemplifies the Bank's functioning. With a project lifecycle of 10 years, closing in 1995, the World Bank has recouped its investment and the damage is continuing. Many other projects fail with less public attention and the Bank is repaid because the loans are backed by the government.
The Bank's relatively recent claims to being an institution supportive of environmental protection and sustainable development have been brought about by sustained pressure from environmental activists worldwide. However, these claims are contradicted by the projects it continues to invest in, the environmental policies it advocates and its contribution to the weakening of environmental legislation in India. This section will look at three aspects of World Bank environmental activism: how it has changed the country's environmental policy framework, its use of toxic materials and it's carbon credit mechanism.