All development is now taking place in a world shaped by climate. Climate change is happening now and impacting countries and people, with the poor the hardest hit. 

In the first eight months of 2015, the world has seen more than 120 climate related disasters. Fourteen of the 15 hottest years since record keeping began over 130 years ago have been since the turn of the century (2000–2015). 

As the third in the series of Turn Down the Heat reports prepared for the World Bank by the Potsdam Institute for Climate Impact Research shows, globally warming of close to 1.5°C above pre-industrial times – up from 0.8°C warming today – is already locked into Earth’s atmospheric system by past and predicted greenhouse gas emissions.

It warns everyone will feel the impact, particularly the poor, as weather extremes become more commons and risks to food, water, and energy security increase.

The World Bank Group is concerned that without bold action, the warming planet threatens to put prosperity out of reach of millions of people and roll back decades of development progress.

To meet the Global Goals by 2030, the world must cut emissions and invest in greater resilience to climate change.  It is why ahead of the climate change conference - COP21 - in Paris in December, the World Bank Group is calling for an ambitious global agreement to help countries on a low carbon and resilient development path. It is a critical opportunity to galvanize political will for urgent action. 

The World Bank Group is committed to tackling climate change. It is integral to its mission of eliminating extreme poverty and boosting shared prosperity. In just FY15 alone, the World Bank Group made 188 climate change-related investments in 59 countries, ranging from helping farmers adapt to a changing climate to new investments in renewable energy.

At the Bank Group’s Annual Meetings in Lima in October, the President Jim Yong Kim also announced a big increase in financing for climate to help meet rising demand from countries to tackle climate change. President announced the institution could, with the support of its members, increase climate financing up to $29 billion annually by 2020.  

Immediate global action is needed to slow the growth in greenhouse gas emissions this decade and to help countries prepare for a warmer world and adapt to changes that are already locked in. Getting there will require economic transformations and a path to net zero emissions before the end of the century.

Creating the right incentives for the deep economic restructuring that’s needed and to crowd in financing for the future means getting prices right – ending fossil fuel subsidies and putting a price on carbon. Fossil fuel subsidies cost about $550 billion and studies show poor people do not benefit.  Right now, about 40 countries and 23 cities, states and provinces are putting a price on carbon, comprising about 12 percent of annual greenhouse gas emissions.

Ahead of Paris, there is increasing momentum to price carbon pollution. It has been backed by a number of Heads of State as well as heads of city and regional governments. The leaders – who have taken steps to price carbon pollution and catalyze greener investment in their own countries and regions – have formed the carbon pricing panel, convened by the Bank Group, and the IMF, with support from the OECD. 

A World Bank report, State and Trends of Carbon Pricing 2015 also shows the number of implemented or planned carbon pricing schemes around the world has almost doubled since 2012 and is now worth about $50 billion.

And drawing on experiences with carbon pricing initiatives around the world, new research lays out principles for governments and business to develop successful and cost-effective schemes to put a price on the social costs of greenhouse gas emissions.

The research by the Bank Group, the OECD with input from the IMF,  says that well designed carbon pricing schemes are a powerful and flexible tool that can cut emissions causing climate change.

The FASTER Principles can be part of the toolkit for governments wanting to act to put a price on carbon to drive investment and protect people. The FASTER Principles are: F for fairness; A for alignment of policies and objectives; S for stability and predictability; T for transparency; E for efficiency and cost effectiveness and R for reliability and environmental integrity.

The Partnership for Market Readiness has been helping countries, including China, move onto a low carbon path.

More and more companies realize that creating a low-carbon business strategy can be beneficial for their bottom-line. The Carbon Pricing Leadership Coalition, was initially formed from a groundswell of support for carbon pricing at the 2014 UN Climate Summit, where74 countries and over 1,000 businesses expressed their support for pricing carbon. It will be officially launched at the Paris climate talks.


Last Updated: Oct 23, 2015

Catalyzing Climate Action

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

The Bank is working in five key areas: building low-carbon, climate resilient cities; moving forward on climate smart agriculture and nurturing forest landscapes; accelerating energy efficiency and investment in renewable energy, including hydropower; supporting work on ending fossil fuel subsidies and developing carbon pricing to get prices right for emissions.  

As mandated by the Bank’s Fund for the poorest, the International Development Association (IDA), Country Partnership Frameworks are incorporating climate and disaster risk considerations, and new IDA operations are now screened for short- and long-term climate change and disaster risks, and resilience measures are integrated as appropriate.

We have developed a toolkit to screen projects and investments for climate and disaster risks. We are working on a resilience indicator.

Through the Global Facility for Disaster Reduction and Recovery (GFDRR), the World 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 World Bank Group has demonstrated innovative ways to mobilize additional resources to finance climate action by working with partners. That includes IFC’s Catalyst Fund targeting large-scale investments, as well as 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 18 carbon finance funds and initiatives that have supported more than 145 projects in 75 client countries. Since 2000, these initiatives have reduced the equivalent of 196 million tons of carbon dioxide emissions through the projects they support.

IFC started tracking the climate-smart components of its investments and advisory services in 2005. Since then the IFC has provided about $13 billion in long-term financing for renewable power, energy efficiency, sustainable agriculture, green buildings and private sector adaptation to climate change.

The World Bank Treasury and IFC are also among the world's largest issuers of green bonds, which support climate-related projects such as increasing energy efficiency and developing of renewable energy — with more than $8.5 billion issued by the World Bank Treasury in 18 currencies. In FY15, IFC issued 18 green bonds in the cumulative amount of $ 352 million, taking IFC’s total green bond issuance to $3.8 billion. 

The Green Growth Knowledge Portal, the Climate-Smart Planning Platform, and the Partnership for Market Readiness, provide countries with cutting-edge information, analysis, and tools on climate change.

Last Updated: Oct 04, 2015

Examples of the World Bank Group's work include:

Helping 60,000 smallholder farmers in Kenya to receive getting carbon credits for improved agricultural land management practices such as land rehabilitation, mulching, and less tilling which traps carbon dioxide in soil. The project, the first of its kind, has already increased crop yields by up to 20 percent. The credits represent a reduction of 24,788 metric tons of carbon dioxide, which is equivalent to emissions from 5,164 vehicles a year.

Supporting the Forest Protection & Reforestation Project in Kazakhstan to protect forests and implement reforestation activities. Technicians now monitor the forest via computer, looking for lightning strikes, smoke, or any activity out of the ordinary. The project also helped forestry scientists learn a new “closed root ball” planting technique, which will, they hope, get small trees out of the laboratory and into the forest faster.

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. Since its creation in 2008the Caribbean Catastrophic Risk Insurance Facility (CCRIF) has made payouts of $32 million across claims from eight countries following natural disasters, with all payouts being made within three weeks of the event. When the 2010 earthquake struck Haiti, CCRIF was the first institution able to mobilize emergency funds within the first two weeks of the disaster.

Building on this success, 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. The first-ever capital markets insurance transaction covering tsunamis now helps five Pacific Island countries to insure themselves against natural disasters.

Flood incidences occur every year in Jakarta, especially during the rainy season months between November and March and severity of the floods have increased in recent years. The Jakarta Urgent Flood Mitigation Project will help restore 67.5 kilometers of 11 key channel sections and 65 hectares of four retention basins to help restore their operating capacities, supporting the Government in addressing immediate flood management priorities.

Given Yemen’s heavy dependence on fragile marine ecosystems for fishing, and severe scarcity of freshwater resources for agriculture, the Pilot Program for Climate Resilience project in Yemen supports investments to mainstream and enhance climate resilience planning and action. It is designed to reduce the vulnerability of coastal populations and integrate climate resilience and adaptation planning and capacity into the water and agricultural sectors.

IFC, is a leading global financier of renewables – namely, solar and wind energy for developing countries. IFC has co-financed more than 2,700 MW of wind power, more than 1,200 MW of solar and close to 6,000 MW in hydro power in places including China, India, Pakistan, Jordan, South Africa, and Chile, Mexico. Renewable energy is consistently two-thirds of IFC’s direct power investments (excluding IFC investments through financial intermediaries), and exceeded 70 percent in FY15.

Last Updated: Oct 04, 2015

Online Learning

Turn Down the Heat: Why a 4°C Warmer World Must Be Avoided

Watch the videos and read other resources from the World Bank's four-week massive open online course, or MOOC, on climate change.

Companies and more than 70 countries have signaled their support for putting a price on carbon
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