Climate Action: World Bank Group Priorities
Addressing climate change requires major social, economic and technological transformations, many of which are costly and will require significant investments. To achieve climate goals, it will be necessary to integrate climate into the development process, identify projects at the country level that address the challenges of climate change adaptation and mitigation, and direct appropriate sources and financing structures towards these projects in a way that helps maximize impact.
This is a complex goal in terms of financing and projects, and achieving it will require building on diagnostic mitigation and adaptation studies that show the path of harmful emissions, key vulnerabilities, and the best climate interventions. These are the pillars of the new World Bank Group Action Plan on Climate Change that we launched in April 2021. A commitment has been made to increase the target level of climate finance to 35% of total commitments over the next five years, align financing flows with the goals of the Paris Agreement, and achieve Outcomes that ensure the integration of climate considerations into the development process.
The international community is committed to reducing greenhouse gas emissions and taking further steps to adapt to the effects of climate change. This is seen with countries that have announced targets to reduce greenhouse gas emissions through their national contributions to combat climate change, with financiers and investors who have announced alignment of their financial flows with the goals of the Paris Agreement, with countries and companies committed to striving for net zero emissions, and with statements such as China’s recent statement It announced its intention to stop building new coal-fired power plants abroad.
At the same time, we see fossil fuel subsidies on the rise, carbon tax slackening, and bold decisions rarely taken to shut down the current fleet of coal-fired power plants and stop building new ones. Much of the infrastructure is being built to outdated or no standards at all, and informal urban development continues in vulnerable areas such as flood plains, flood streams, and coastal areas.
Moreover, 760 million people—many of whom live in the world’s poorest countries and are responsible for less than a tenth of global emissions of greenhouse gases—remain without energy. These countries need to grow and develop at a faster pace, in a low-carbon manner, and in a way that can withstand shocks. They also need to make significant investments in adaptation and risk management, as they are often the countries most affected by extreme weather events and natural disasters.
To achieve our climate goals, it will be necessary to integrate climate into the development process, identify projects at the country level that address the challenges of climate change adaptation and mitigation, and direct appropriate sources and financing structures towards these projects in a way that helps maximize impact.
This series of policy notes for the 26th session of the United Nations Climate Change Conference (COP26) outlines the main priorities of the Climate Change Action Plan. The main diagnostic package has been supplemented by country reports on climate and development, which are being disseminated in 25 countries. These reports will provide data and results of important diagnostic studies to identify and prioritize actions that help achieve a significant reduction in greenhouse gas emissions and build adaptation and resilience capacities.
Climate action requires a strong commitment on the part of countries, so this climate change agenda prioritizes supporting countries in operationalizing their national contributions to combat climate change and their long-term strategies, in order to help countries create better links between their climate commitments and their development goals.
The plan prioritizes adaptation, as climate change and natural disasters affect the poorest and most disadvantaged segments of the population the most. Our analyzes show that climate change could lead to more than 130 million people falling into poverty by 2030, and the migration of more than 200 million people by 2050. Therefore, it is essential to invest in climate change adaptation activities to help countries and companies become I can withstand and face shocks.
In terms of shifts in our systems, we focus on the most emitting systems—energy, manufacturing, transportation, agriculture, land use, and cities. With the energy sector responsible for 3 quarters of global emissions, our Climate Change Plan emphasizes an energy transition, as we support countries and our private clients to shift away from high-carbon energy systems through an equitable transition.
Climate action requires engaging in a wide range of activities including policy support, a supportive investment environment, project preparation and design, and most of all, project financing. It requires matching grants and, where possible, hybrid financing, various forms of capital – commercial, concessional and grants – to finance the appropriate component of each project.
With the world keen to boost climate finance, it is necessary to prepare high-impact projects and study criteria for exchange between providers and users of climate capital. Partnerships and coordination efforts, including through country programmes, and finding innovative ways to pool resources from private institutions and companies looking to meet their net-zero commitments will be critical to enhancing the financing available for effective results.
Our analyzes show that climate change could lead to more than 130 million people falling into poverty by 2030 and to emigrate more than 200 million people by 2050.
There is no doubt that the World Bank Group is a powerful mechanism to support developing countries in pursuit of their climate and development priorities, and the largest provider of climate finance to developing countries, and over the past four years, more than $21 billion has been provided for climate finance.
The group has also committed to providing an average of $25 billion annually, not counting the resources mobilized from other parties, during the new plan period from fiscal year 2021 to fiscal year 2025, through effective projects and programs that ensure the reduction of greenhouse emissions, encourage adaptation and reduce greenhouse gas emissions. Poverty, inequality and improving development outcomes.
Tackling climate change is an urgent goal, and the World Bank Group’s approach is to turn ambitions into action.