Click on links to see the summary and download the brief:
- Climate and Development Reports (CCDRs)
- Expanding World Bank Group Support for Country NDCs and LTSs
- Adaptation and Resilience: A Priority for Development and Poverty Reduction
- Energy Transition and Universal Access
- Scaling Finance for Transformational Climate Projects
Tackling climate change will require major social, economic and technological changes, many of which are costly and will require large investments. To achieve our climate objectives, it will be critical to integrate climate and development and identify projects at the country level that tackle mitigation and adaptation and channel appropriate sources and structures of financing toward these projects in a manner that maximizes impact. This is a complex goal from both the financing and project side, and will need to build on mitigation and adaptation diagnostics that show the trajectory of emissions, the major vulnerabilities, and the best climate interventions. These are the pillars of the World Bank Group¡¯s new Climate Change Action plan (CCAP), which we launched in April 2021, and in which we committed to increase our climate finance target to 35% of total commitments over the next five years, align our financing flows with the goals of the Paris Agreement, and achieve results that integrate climate and development.
The world community is committed to reducing greenhouse gas (GHG) emissions and taking more steps to adapt to climate change. We see this with countries announcing GHG reduction targets via their Nationally Determined Contributions (NDCs); financiers and investors announcing the alignment of their financing flows with the goals of the Paris Agreement; countries and corporations committing to net zero emissions goals; and announcements, such as China¡¯s most recently, to stop building new coal-fired power plants abroad.
At the same time, fossil fuel subsidies are increasing, carbon is too lightly taxed, and bold decisions to decommission the existing fleet of coal-fired power plants and stop construction of new ones are rare. Many infrastructure assets are built with outdated standards, or no standard at all, and unmanaged urban development continues in at risk-areas, such as flood plains and coastal zones. Furthermore, 760 million people¡ªmany of them living in the poorest countries and responsible for less than one tenth of global GHG emissions¡ªremain without energy access. These countries need to grow and develop faster and in a low-carbon and resilient way. They also need large investments in adaptation and risk management, as they tend to be the most impacted by extreme weather events and natural disasters.
Our series of COP26 Climate Briefs unpack the key priorities of our CCAP. We added to our set of core diagnostics the , which we are already rolling out in 25 countries. These reports will provide important data and diagnostics to identify and prioritize actions that meaningfully reduce GHG emissions and build adaptation and resilience.
Climate action needs to be country-owned, so our CCAP prioritizes supporting countries with their , with the goal of helping countries have better linkages between their climate commitments and their development goals.
Our CCAP prioritizes because climate change and natural disasters disproportionately affect the poorest and most vulnerable populations. Our analysis finds that climate change may push over 130 million into poverty by 2030 and cause over 200 million people to migrate by 2050. Investing in adaptation to help countries and companies become more resilient is therefore critical.
On systems transitions, we are focusing on the highest emitting systems¡ªenergy, manufacturing, transport, agriculture and land use, and cities. With energy responsible for three-quarters of global emissions, our CCAP places emphasis on the , where we are supporting countries and private sector clients to move away from high-carbon energy systems via a just transition.
Climate action requires engagement across a spectrum of activities including policy support, creating the enabling environment for investment, project development and design, and, importantly, project finance. It requires matching, and where relevant blending, different pools of capital¡ªcommercial, concessional, and grants¡ªto the appropriate component of each project undertaken. As the world considers ways to ramp up , it is critical to develop high impact projects, and to consider the parameters of the exchange between providers and users of climate capital. Partnerships and coordination efforts, including through country platforms, and the development of innovative ways to pool resources from private foundations and companies looking to fulfill their net zero commitments will be critical to drive the available financing toward impactful results.
ľ¹ÏÓ°Ôº Group is a strong platform for supporting developing countries with their climate and development priorities. We are the largest provider of climate finance for developing countries, and over the last four years, we provided an annual average of over $21 billion in climate financing. We are going further, and have committed to provide $25 billion annually on average, net of mobilization, over the CCAP period of FY21-25, through impactful projects and programs that reduce GHG emissions, foster adaptation, reduce poverty and inequality, and improve development outcomes. Tackling climate change is urgent, and our approach translates ambition into action.
Country Climate and Development Reports (CCDRs)
For countries to effectively undertake low-carbon, resilient development, deploying approaches that integrate climate and development considerations will be vital. This requires new diagnostics to identify and prioritize opportunities for high-impact climate action that supports development and economic growth. That¡¯s why the WBG has developed a new diagnostic tool ¨C the Country Climate Development Reports. CCDRs will be firmly anchored in a country¡¯s development goals, will help inform policy and institutional reforms, and will help identify opportunities for and investments in climate action. Their goal is to help identify and prioritize concrete actions that can support countries goals to meaningfully reduce GHG emissions and improve resilience.
Expanding WBG Support for Country NDCs and LTSs
Well formulated Nationally Determined Contributions (NDCs) and Long-Term Strategies (LTSs) can play a key role in articulating climate action in a manner consistent with development. The WBG will provide support to countries to facilitate the development of high-impact NDCs and LTSs that integrate climate and development, building on our new diagnostic, the Country Climate Development Report (CCDR). NDCs need to set clear mitigation and adaptation targets and measures that contribute to the efficient achievement of long-term adaptation and mitigation objectives, if possible by being directly linked to an LTS. They also need to identify key enabling conditions for implementation, such as regulatory framework, finance mobilization, technology transfer, and institutional capacity building, and include plans for monitoring, reporting, and evaluation. NDCs, like LTSs, need to be integrated and aligned with national development strategies and have buy-in from planning and sector ministries, and allow for meaningful participation of society and political stakeholders at all levels during development, revision, and implementation.
Adaptation and Resilience: A Priority for Development and Poverty Reduction
Climate change will disproportionately affect the poorest and most vulnerable populations, especially in low- and middle-income countries. Climate change may push over 130 million into poverty by 2030 and cause over 200 million people to migrate by 2050. Climate-related disasters such as severe floods, droughts, and storms will affect food prices and food security, health, and labor productivity. Investing in climate resilience presents an enormous economic opportunity: On average, $1 invested in resilient infrastructure yields $4 of benefits in low- and middle-income countries. The WBG supports interventions to boost resilience with three major priorities: (1) information, tools, and data for decision-makers to spend better by mainstreaming resilience and climate change in decisions and investments in a cost-effective way; (2) investments and mobilization of private capital to spend more on physical resilience and adaptation; and (3) policies and systems to boost social and financial resilience to cope with and recover from impacts that cannot be prevented.
Energy Transition and Universal Access
The world must transform the way it generates and uses energy to reduce emissions while meeting growing energy demand and providing energy access for the poor. The global energy transition requires political will to undertake reforms that remove fossil fuel subsidies and that price carbon appropriately, both critical to incentivize a shift away from fossil fuels. Bold decisions about what to do with coal-fired power plants, and how to replace retired capacity with reliable, low-carbon supply will be needed. The WBG uses a suite of technical assistance, policy lending, and investment products to support countries and clients to accelerate the energy transition. Moving forward, we will channel targeted concessional climate financing and other tools to advance clean energy national strategies; support fossil fuel subsidies reforms and carbon price signals; strengthen implementing institutions; accelerate a just transition away from coal; and invest in resilient network infrastructure and technologies to ensure reliable supply with low-carbon electricity generation.
Tackling climate change will require major social, economic and technological changes, many of which are costly and will require large investments. Climate action requires engagement across a spectrum of activities including policy support, creating the enabling environment for investment, project development and design, and, importantly, project finance. It requires matching, and where relevant blending, different pools of capital¡ªcommercial, concessional, and grants¡ªto the appropriate component of each project undertaken. As the world considers ways to ramp up climate finance, it is critical to develop high impact projects, and to consider the parameters of the exchange between providers and users of climate capital. ľ¹ÏÓ°Ôº Group is a strong platform for supporting developing countries with their climate and development priorities, and we are moving further with you 2021-2025 CCAP, with commitments expected to translate to $25 billion in average annual climate financing over the CCAP period.