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Climate Change Overview

Climate change is a fundamental threat to development and the fight against poverty.  The World Bank Group is concerned that without bold action now, the warming planet threatens to put prosperity out of reach of millions and roll back decades of development.

The science is unequivocal that humans are the cause of global warming, and major changes are already being observed.  Since the turn of the century (2000 – 2013), each year has ranked among the 15 warmest since record keeping began 134 years ago. The intensity of extreme weather-related events has also increased.  Recent experience is a stark reminder that no country – rich or poor – is immune from the impacts of climate-related disasters today.

Turn Down the Heat, a snapshot of the latest climate science prepared for the Word Bank by the Potsdam Institute for Climate Impact Research, says we are on a path to a 4°C (7.2°F) warmer world by the end of this century. The report provides a clear picture of the devastating impacts on agriculture, water resources, ecosystems, and human health. While every region will be affected, those least able to adapt – the poor and most vulnerable – would be hit hardest. A follow-up report, which focused on impacts of climate change on Sub-Saharan Africa, South Asia, and South East Asia, tells us that if the world warms by 2°C (3.6°F) – warming which may be reached in 20 to 30 years – there will be widespread food shortages, unprecedented heat-waves, and more intense storms.

The World Bank Group believes a 4°C warmer world can and must be avoided. Immediate global action is needed to slow the growth in greenhouse gas emissions this decade and help countries prepare for a 2°C warmer world and adapt to changes that are already locked in.

At the Bank, we are stepping up our mitigation, adaptation, and disaster risk management work, and will increasingly look at all our business through a climate lens.

Last Updated: Mar 24, 2014

Catalyzing Climate Action

The World Bank Group is focusing on five key areas that can help get prices right, get finance flowing, and make progress where it matters most.

Building low-carbon, climate resilient cities, particularly through assistance with low-carbon planning, energy-efficiency assessments, and securing finance, targets the fast-growing metropolitan areas that are connected to 70 percent of global emissions. Moving forward on climate-smart agriculture improves yields to feed a growing global population, reduces emissions, and adds carbon storage. Accelerating energy efficiency and investment in renewable energy helps shifts the world away from high-carbon fossil fuels. The Bank Group is also supporting work on ending fossil fuel subsidies and developing carbon pricing to get prices right for emissions.

Another important move that can make a difference quickly: By reducing short-lived climate pollutants (SLCPS), such as soot from fires and diesel vehicles and methane from landfills and extractive industries, countries can reap a double reward of reducing the impact on snow and glaciers and lowering the costs to human health and crops.

The World Bank Group Climate Vice-Presidency, established in January 2014, is working to leverage both public and private sources of climate finance, to support climate-smart policy and investments, and to help countries and businesses adapt to a changing climate.

Climate Action at the World Bank Group

The World Bank Group has successfully demonstrated innovative ways to mobilize additional resources to finance climate action by working with partners. That includes the $8 billion Climate Investment Funds, which are designed to provide scaled-up financing, through the Multilateral Development Banks, to initiate transformational change toward climate-resilient, low-carbon development.

The Bank is trustee of 15 carbon finance initiatives that have supported more than 140 projects in 50+ countries. Since 2000, these initiatives have reduced the equivalent of 187 million tons of carbon dioxide emissions through the projects they support.

The International Finance Corporation (IFC), the Bank’s private sector arm, works to support renewable power, energy efficiency and other climate-smart solutions for developing countries. IFC has invested more than $11 billion in climate-related projects since 2005, including $2.5 billion during FY 2013.

The World Bank and IFC are also the world's largest issuers of green bonds, which support climate-related projects such as increasing energy efficiency and developing of renewable energy - with $5.3 billion issued by the World Bank Treasury in 61 bonds and 17 currencies, and $3.4 billion by the IFC Treasury, including two $1 billion benchmark offerings in 2013.

Through the Global Facility for Disaster Reduction and Recovery (GFDRR), the Bank is helping developing countries reduce their vulnerability to natural hazards and adapt to climate change by mainstreaming disaster risk reduction and climate change adaptation in country development strategies.

The 2013 report Building Resilience: Integrating Climate and Disaster Risk into Development, noting that weather-related losses and damage have risen from an annual average of about $50 billion in the 1980s to close to $200 billion over the last decade, emphasized the need to better integrate climate adaption with disaster-risk management programs.

Knowledge portals, including the Climate Change Knowledge Portal, the Climate Finance Options Platform, and the Platform for Climate Smart Planning, along with training through the World Bank Institute, provide countries with cutting-edge information, analysis, and tools on climate change.

To tackle SLCPs, the Bank launched a review of its own portfolio to identify ways to do more through its projects to reduce the emission of these pollutants. The report, Integration of Short-Lived Climate Pollutants in World Bank Activities, found that 7.7 percent of World Bank commitments, or approximately $ 18 billion, went into "SLCP-relevant" activities between 2007 and 2012.

Another 2013 report, On Thin Ice, showed that by moving rapidly to reduce SLCPs, the world could slow warming in critical snow and ice-covered regions and save millions of lives.

Following the Bank’s own Strategic Framework for Development and Climate Change in 2008 and the World Development Report on climate change in 2010, we are developing a new Climate Action Plan that will enhance resilience of countries, support inclusive green growth and integrate climate risk assessments in investment decisions across our portfolio.

Last Updated: Mar 24, 2014

Results

The government of Nepal with the assistance of the World Bank Group, has built more than 1,000 micro hydropower plants since 2007 that deliver clean, renewable power to communities in 52 districts across the country. The new source of electricity is bringing new jobs and economic growth to rural and impoverished parts of Nepal.

Another rural electrification project in Bangladesh has been installing more than 50,000 solar homes systems every month since 2003. The fastest-growing solar homes systems program in the world, this Bank-funded initiative expects to connect 2.5 million people by 2018.

And in Chile, the IFC invested more than $450 million in privately sponsored hydro, wind, and solar projects. Together they offset 1.7 million tons of CO2 emissions—roughly equivalent to taking 200,000 cars off the road. The projects include the largest solar photovoltaic power plant in Latin America: the SunEdison-owned Amanecer solar project in Chile’s Atacama Desert.

Our support of sustainable land management practices is helping farmers and rural communities reduce emissions from agricultural practices and become more resilient to a changing climate.

In Kenya, 60,000 smallholder farmers are now getting carbon credits for improved agricultural land management practices such as land rehabilitation, mulching, and less tilling which trap carbon dioxide in soil. They sell the carbon credits to the BioCarbon fund, earning a total of $65,000 so far. The project, the first of its kind, has already increased crop yields by up to 20 percent.

Another carbon credit project focused on reforestation in Rio de Janeiro, Brazil, is helping to revitalize neighborhoods and improve public health, while capturing hundreds of tons of carbon dioxide emissions and generating credits for the city. The Rio Low Carbon City Program, launched by the Bank and the city at Rio+20 in 2012, will measure the climate impact and the carbon credits generated by the initiative. 

The World Bank Group is also stepping up efforts to integrate disaster risk management work with longer-term efforts to make vulnerable nations more resilient to climate and disaster risks.

In the Caribbean, The Caribbean Catastrophic Risk Insurance Facility has since 2008 made payouts of $32 million across claims from eight countries following natural disasters, with all payouts being made within three weeks of the event.

Similarly, for the Pacific Islands, the Pacific Catastrophe Risk Facility was set up in 2013 to provide disaster risk assessment tools and practical technical and financial applications to reduce and mitigate countries’ vulnerability to natural disasters. In FY13, the Bank executed the first-ever capital markets insurance transaction covering tsunamis to help five Pacific Island countries (Marshall Islands, Samoa, Solomon Islands, Tonga, and Vanuatu) to insure themselves against natural disasters.

Last Updated: Mar 24, 2014

Around The Bank Group

Find out what the Bank Group's branches are doing on climate change.