2016 is shaping up as the hottest year on record. The first six months of the year were the hottest since records began in 1880, while the Artic has seen record low sea ice levels. As a result of the growing impacts of climate change, millions of people experiencing higher temperatures and extreme weather events such as droughts, heat waves, floods and storm surges, putting food and water security at risk, and threatening agricultural supply chains and many coastal cities.
The impacts and risks posed by climate change highlight the need for action to deliver on the Paris Agreement on climate change, reached in December 2015, to keep a global temperature rise this century below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius. And with the world’s poorest people hit hardest by climate change, the case for action has been underscored by the Sustainable Development Goals, adopted by countries in September 2015, as well as the Financing for Development agenda and the Sendai Framework for Disaster Risk Reduction.
For the World Bank Group, with its goals of ending extreme poverty and boosting shared prosperity, climate change and poverty are inextricably linked. A Bank report, Shock Waves: Managing the Impact of Climate Change on Poverty, warned that without rapid action, climate change could push an additional 100 million people into poverty by 2030.
Delaying action would significantly increase the cost of keeping warming below 2 degrees Celsius – according to the Intergovernmental Panel on Climate Change (IPCC) scenarios, delaying action until 2030 would increase the costs of mitigating the impact of climate change by 50 percent.
A Climate Change Action Plan
The World Bank Group’s Climate Change Action Plan of April 2016 aims to help developing countries accelerate efforts to tackle climate change and deliver on their national climate plans submitted for Paris, the Intended Nationally Determined Contributions (INDCs). As part of the Paris process, 140 client countries of the Bank Group submitted these plans.
The investment needs embedded in the INDCs amount to more than US$1 trillion per year over the next 15 years. And for the world’s poorest countries, supported by the World Bank Group’s fund for the poorest, IDA, the International Development Association, the costs for implementing their INDC actions are between $800 billion to $900 billion by 2030, or up to $60 billion a year through 2030. An analysis of the INDCs of 71 countries supported by IDA shows that most countries are intending to improve renewable energy, energy efficiency, and energy access. Reduced emissions from deforestation and degradation were also highlighted in 90 percent of the INDCs.
The Bank Group’s Climate Change Action Plan is designed to provide customized action and support, recognizing the different needs of developing countries across the globe. The Bank Group developed an Africa Climate Business Plan to tackle the specific needs of countries on the continent. Recognizing the immense need for private sector funding to meet the climate challenge, the Bank Group’s private sector arm, IFC, has also released its Climate Implementation Plan.
Sub-Saharan Africa has immense needs for adaptation, food security, resilience and energy access. Most national climate plans in Africa prioritize adaptation. The Bank Group’s Africa Climate Business Plan aims to raise $16 billion for adaptation investments by 2020, building up the resilience of the continent’s environment and people, improving energy access via renewable energy, and enabling resilience with support for hydrometeorological services and improved climate-resilient investment planning.. IFC will invest in large scale renewable energy, green buildings and off-grid electricity, as well as opportunities to help the agricultural sector adapt to a changing climate.
The East Asia and Pacific region is responsible for a third of the world’s carbon dioxide emissions. Energy generation capacity is expected to double by 2030, and generation from coal is expected to increase dramatically without a change to current energy planning in the region. Many countries and islands in the region are highly vulnerable to climate impacts. Forests and landscapes are also a key element of the climate challenge and a major focus of climate policies. The Bank Group has been aligning its operations with the INDCs, with a focus on promoting renewable energy. IFC plans to expand its climate business in renewable energy and urban infrastructure, as well as climate smart agriculture.
Europe and Central Asia has countries with high energy intensity as well as large forest resources, with particular vulnerabilities across the region. In general, the INDCs focus on mitigating the impacts of climate change. So the region’s current climate action aims to address energy intensity, green growth, sustainable forestry and cities and support for countries’ INDCs. There are private sector opportunities in renewable energy, sustainable cities and sustainable energy finance.
Latin America and the Caribbean is vulnerable to natural disasters and has a shifting energy matrix that risks raising emissions through increased reliance on fossil fuels. But it’s also a region demonstrating innovation on climate policies, for example through green growth strategies and carbon tax on fossil fuels in Mexico and sustainable forest management in Brazil. The Bank Group’s climate work targets activities to mitigate climate change and disaster risk management, with increasing emphasis on private sector opportunities in urban infrastructure and agribusiness.
The Middle East and North Africa region accounts for seven percent of global emissions and half of the world’s energy subsidies. Extreme vulnerability to climate change is linked to water availability and agriculture, sea level rise and heat waves. The Bank Group is ramping up its work in helping countries mitigate the impact of climate change in energy, finance and markets and transport.
The South Asia region is vulnerable to sea level rise, floods, landslides and agriculture and in rural areas, people have low access to clean and modern energy services. The INDCs suggest large demand for funding for both efforts to adapt to and mitigate climate impacts, with private sector opportunities in urban infrastructure, and wind and solar and potential for sustainable agriculture.
To help developing countries meet the climate challenge, the Bank Group’s Climate Change Action Plan re-affirms the pledge by President Jim Yong Kim to increase climate financing to potentially $29 billion a year in 2020, with the support of its members.
Last Updated: Sep 16, 2016