Overview

  • Countries and communities around the world are already experiencing increased climate change impacts – including droughts, floods, more intense and frequent natural disasters, and sea-level rise – and the poorest and most vulnerable are being hit the hardest.

    The financing required for an orderly transition to a low carbon, resilient global economy must be counted in the trillions, not billions.  

    • Significant investment in infrastructure is needed over the next 15 years - around $90 trillion by 2030 – but it does not need to cost much more to ensure that this new infrastructure is compatible with climate goals.

    Climate action offers a major opportunity to ensure sustainable global development and boost economic growth. It is already delivering real results in terms of new jobs, economic savings, competitiveness and market opportunities, and improved wellbeing for people worldwide with even greater investment, innovation, and growth potential ahead.

    Under the Paris Agreement, the world committed to limiting the rise in global temperatures to well below 2 degrees Celsius above pre-industrial levels by the end of the century. Achieving the goals of the Agreement will require decisive and bold action.

    Policies, such as carbon pricing, can help create incentives for transformational change.

    • Carbon pricing represents a simple, fair and efficient policy option to address climate change. It can also deliver additional benefits, reducing air pollution and congestion while avoiding the increased costs of remedial measures associated with high-carbon growth paths. For businesses, carbon pricing enables them to manage risks, plan their low-carbon investments, and drive innovation. 
    • As of Feb. 1, 2019, 46 national jurisdictions and 28 subnational jurisdictions are implementing or have scheduled for implementation initiatives to put a price on carbon. Find up the latest information, visit the Carbon Pricing Dashboard, an interactive online platform that builds on the data and analyses of the annual State and Trends of Carbon Pricing report series.

    However, to shift investment at scale, carbon pricing coverage must expand, and prices must be stronger. Most initiatives saw increases in carbon prices in 2018 compared to price levels in 2017. But despite these, most initiatives are still below the $40-$80/tCO2e needed in 2020 to stay consistent with achieving the temperature goal of the Paris Agreement, as identified by the High-Level Commission on Carbon Prices led by Joseph Stiglitz and Nicholas Stern.

    Last Updated: Apr 02, 2019

  • The World Bank Group (WBG) is more committed than ever to helping countries meet the climate challenge. We are actively working with countries to help them deliver on and exceed their Paris ambitions, including through financing, technical assistance, and knowledge sharing.

    • The WBG Climate Change Action Plan lays out ambitious targets to be met by 2020, including helping client countries add 30 gigawatts of renewable energy, put in place early warning systems for 100 million people, and develop climate-smart agriculture investment plans for at least 40 countries.
    • In December 2018, the World Bank Group announced a new set of climate targets for 2021-2025, doubling its current 5-year investments to around $200 billion in support for countries to take ambitious climate action. The new targets build on the World Bank Group’s 2016 Climate Change Action Plan.
    • The World Bank Group recently launched a new Action Plan on Climate Change Adaptation and Resilience. Under the plan, the World Bank Group will ramp up direct adaptation climate finance to reach $50 billion over FY21–25. This financing level—an average of $10 billion a year—is more than double what was achieved during FY15-18. The Action Plan forms part of the World Bank Group’s 2025 Targets.
    • The WBG has also committed to increasing climate financing to 28 percent of the Bank Group’s portfolio by 2020, in response to client demand.
    • More than 135 developing and middle-income countries have submitted national plans for climate action under the Paris Agreement – the Nationally Determined Contributions (NDCs). The WBG is now actively working with countries to help them deliver on and exceed their Paris ambitions, including through financing, technical assistance, and knowledge sharing.
    • In partnership with the UN, the WBG has launched a new platform for climate action, Invest4Climate designed to bring together national governments, financial institutions, investors, philanthropies, and multilateral banks to support transformational climate investments in developing countries. 
    • All World Bank projects are now screened for climate and disaster risk to ensure that they build the resilience of people on the ground.
    • Since FY18 all applicable investment lending projects incorporate shadow price of carbon in the economic analysis. The Bank’s recommended shadow prices of carbon were updated in December 2017 and are consistent with achieving the core objective of the Paris Agreement of keeping temperature rise below 2 degrees Celsius.
    • The WBG is working together with the other multilateral development banks (MDBs) on common approaches to monitor and track their climate finance flows to client countries, as they increase their climate financing in mitigation and adaptation. The MDBs are continuing to align their financial flows with the Paris Agreement, supporting the implementation of the NDCs and facilitating activities that transition development towards low greenhouse gas emissions and climate resilient development.
    • Innovate4Climate (I4C) an integral part of the global dialogue on climate finance, climate investment, and climate markets. It convenes leaders from business, banking, finance, policy, and technology to think innovatively about how to leverage and direct investment toward low-carbon economies.
    • 2019 will represent the 3rd Edition of I4C and will build on previous events in Barcelona (2017) and Frankfurt (2018), which focused on unlocking the trillions in private sector investment needed to scale up national climate plans and to accelerate the global transition to a low-carbon, climate-resilient future and the development of innovative financing instruments and approaches to support low-carbon, climate-resilient development pathways.

    Last Updated: Apr 02, 2019

  • The WBG is working on innovative solutions to help countries meet their climate commitments.

    • In 2018, the WBG provided a record-breaking $20.5 billion in finance for climate action: doubling our delivery from the year before the Paris Agreement was adopted and meeting our 2020 climate finance targets two years ahead of schedule.

    - This is the result of an institution-wide effort to mainstream climate considerations into all development projects.

    - In 2017, the WBG leveraged $8.6 billion of private finance: working with the private sector is a vital part of driving climate action.

    • Also in 2018, 70 percent of WB projects include climate co-benefits, up from 37 percent just two years ago. Across WB projects, finance for adaptation projects reached almost the same level as finance for mitigation projects in 2018.
    • Climate financing by the world’s six largest MDBs rose to a seven-year high of $35 billion in 2017, up 28 percent on the previous year, according to the latest 2017 Joint Report on Multilateral Development Banks’ Climate Finance.
    • IFC plays a key role in advancing private sector solutions to address climate change. In FY18, IFC provided $8.4 billion in climate-smart financing, including a record $4.5 billion in core mobilization and $3.9 billion in own account climate-smart investments. This accounted for 36 percent of IFC’s total climate commitments for the year – including mobilized funds – and exceeded the 2020 target. IFC investments are expected to help reduce greenhouse emissions by an estimated 10.4 million metric tons annually.
    • The World Bank and IFC are among the world’s largest issuers of green bonds. As of March 2018, the World Bank had issued a total of 217 green bonds worth over $10 billion. In FY18 IFC’s total issuance was $1.8 billion through 32 bonds in 13 currencies, representing an all-time record of green bond issuance. As of the end of FY18, IFC Treasury has issued $7.6 billion across 111 green bonds.

    Energy

    • The World Bank is one of the largest providers of finance for renewable energy in developing and middle-income countries. Between FY2014 and FY2018, we provided more than $11.5 billion in financing for work in these areas ($7.4 billion in financing for renewable energy generation projects and $4.1 billion in financing for energy efficiency projects). 
    • In a major announcement at the One Planet Summit, the World Bank Group committed $1 billion for a new global program to accelerate investments in battery storage for energy systems in developing and middle-income countries. The program is expected to help these countries ramp up their use of renewables – particularly wind and solar power – improve energy security, increase grid stability and expand access to electricity.
    • In Bangladesh, the World Bank supports the largest off-grid program in the world, powering 2.5 million households through 1.2 million solar home systems, 867 solar irrigation pumps, and 20 solar-based mini-grids and 1.4 million efficient cookstoves. Almost 7 million people in rural areas now have reliable access to solar-powered electricity through this program, which has created 70,000 jobs.
    • In December 2017, the WBG announced it would no longer finance upstream oil and gas investments after 2019. The WBG will continue to provide technical assistance that helps client countries strengthen the transparency, governance, institutional capacity and regulatory environment of their energy sectors – including in oil and gas.
    • Two IBRD guarantees for a total of US$730 million are helping establish RenovAr, a program that is mobilizing $5.5bn in investments in Argentina’s renewable energy sector. The RenovAr program is expected to reduce GHG emissions substantially over 20 years, with benefits including reduced air pollution and fossil fuel use, and more secure energy supply. The renewable energy auctions, supported by these guarantees, are now bringing in private investors at competitive prices for renewable energy (about 4 to 6 USc/kWh) - lower than the average cost of electricity generation (about $0.07/kWh in 2015) and decreasing with each round. This will help Argentina benefit from its abundant renewable resources and ultimately help it achieve its target to produce 20 percent of its electricity from renewable sources by 2025.
    • With support from the World Bank and Climate Investment Funds, Indonesia is planning a new Geothermal Risk Mitigation Facility to develop more than 1 GW of new geothermal capacity. The facility is expected to help mobilize several billion dollars in private sector funding, unlocking investments through risk mitigation for exploration and early production drilling. Ultimately, the facility could help Indonesia reach its target of increasing the share of new and renewable energy in its primary energy mix to 23 percent by 2025, including an overall addition of 5.8 GW of geothermal capacity -- a clean alternative to coal-fired power generation in a country where 30 million people still lack access to modern and reliable electricity.
    • Through the Scaling Solar program, the World Bank Group is helping sub-Saharan African countries – including Zambia, Senegal, Madagascar, and Ethiopia – develop utility-scale solar power quickly and affordably. Scaling Solar brings together a suite of World Bank Group services under a single engagement to help create viable markets for solar power in each country. This “one-stop shop” aims to make privately funded grid-connected solar projects operational within two years at competitive rates. On March 11, 2019, the program’s first solar plant with a total capacity of 54MW was inaugurated in Lusaka, Zambia.
    • In FY18 IFC arranged for $2.5 billion in renewable energy generation and component manufacturing, including $926 million of own account investments and $1.6 billion in core mobilization.
    • As part of continuing efforts to work upstream, IFC has developed a roadmap for Côte d’Ivoire to achieve its 42 percent renewable energy commitment under the Paris Agreement.

    Adaptation and Resilience

    • The World Bank Group recently launched a new Action Plan on Climate Change Adaptation and Resilience. Under the plan, the World Bank Group will ramp up direct adaptation climate finance to reach $50 billion over FY21–25. This financing level—an average of $10 billion a year—is more than double what was achieved during FY15-18. The Action Plan forms part of the World Bank Group’s 2025 Targets.
    • World Bank financing for developing countries to adapt and build resilience to climate change grew considerably – with $7.7 billion in adaptation investments in FY18 compared to $3.9 billion the previous year. Now, close to half (49 percent) of all World Bank climate finance is devoted to adaptation, demonstrating a commitment to focus as much on supporting countries to adapt to climate change as on mitigating future emissions.
    • In the Solomon Islands, the Community Resilience to Climate and Disaster Risk Project is helping communities better manage natural hazards and climate risks by supporting policy development, strengthening of early warning systems, and investments in climate change adaptation. To date, community-level disaster risk management plans are in place for 55 communities, 28 community-led sub-projects have been completed, and another 28 are in progress.
    • While Africa accounts for only 4 percent of global greenhouse gas emissions, the continent is most vulnerable to the impacts of climate change and disasters. The Africa Hydromet Program is providing technical services and investment financing to eight African countries’ efforts to modernize hydrological and meteorological services and systems. Approximately $200 million is supporting active and upcoming hydromet projects in Burkina Faso, Chad, the Democratic Republic of Congo, Mali, Niger, and Togo.

    Transport

    The World Bank is working with its partners to help develop a new intelligent transport system for Dakar, Senegal aimed at moving 300,000 passengers per day. The Dakar Bus Rapid Transit (BRT) Pilot Project will improve travel conditions and reduce by half the average rush hour in-vehicle travel time by public transport. It combines contributions from the World Bank and other development partners and an expected financing of more than $50 million from the private sector through a PPP structure. The BRT project also lays the foundation for technology upgrades. Senegal's NDC lists the BRT as central to reducing the country’s transport-related carbon emissions. The World Bank supports this project with $300 million in financing from the International Development Association.

    • Decarbonizing transport is crucial to achieving the objectives under the Paris agreement. The sector presently contributes approximately 23 percent of global energy-related greenhouse gas emissions. Shifting the trend towards a greener, more sustainable transport sector will require transforming the world’s mobility – including with innovative solutions as Electric Mobility. A World Bank report launched at COP 24 reveals that developing countries stand to benefit significantly from electric mobility, and lays out basic principles for eMobility programs that respond to the climate, economic, fiscal, technical, institutional, and policy circumstances of different countries.
    • The Bank is helping India address the impacts of climate change by embedding resilience into its highway program through transformative projects. The Pradhan Mantri Gram Sadak Yojana (PMGSY) Rural Roads Project is an ambitious $35-billion program that aims to ensure every village in India is connected to an all-weather road. A large part of the Bank’s $1.8 billion support involves implementing climate and green growth measures that will reduce the environmental impact of the project, address climate vulnerability, and enhance cost-effectiveness. The Eastern Dedicated Freight Corridor (EDFC), supported by $2.1 billion in Bank commitments, is one of the largest infrastructure programs in modern Indian history. It will make a significant contribution toward low-carbon economic development in the country when it becomes operational in 2021. EDFC will also connect to National Waterway 1, a modern inland waterway that is currently being developed with World Bank assistance ($375) over a 1,360-km stretch of the Ganga River. Shifting freight traffic to the upgraded waterway will save an estimated 162,000 tons of CO2 emissions per year, amounting to 4.9 million tons over the economic life of the project interventions.

    Agriculture

    • In China since 2014, a Bank-supported project has helped expand climate-smart agriculture. Better water-use efficiency on 44,000 hectares of farmland and new technologies have improved soil conditions and boosted production of rice by 12% and maize by 9%.  More than 29,000 farmers’ cooperatives report higher incomes and increased climate resilience.
    • In Uruguay since 2014, climate-smart agriculture techniques have been adopted on 2,946,000 hectares, providing for a carbon sequestration potential of up to 9 million tons CO2 annually.

    Forests and Landscapes

    • Since the adoption of the Forest Action Plan in 2016, World Bank’s net commitments on the active forest portfolio have increased from US$1.8 billion (FY16) to US$2.3 billion (FY18). This includes support for programs to preserve forests and reduce greenhouse gas emissions from the land use sector.
    • Mozambique and DRC ­­– two African countries with globally significant forest resources – signed landmark agreements with the World Bank that reward community efforts to reduce carbon emissions by tackling deforestation and forest degradation (REDD+). These agreements, known as Emission Reductions Payment Agreements, unlock performance-based payments of up to US$50 million for Mozambique and up to US$55 million for DRC. The payments will come from the Forest Carbon Partnership Facility Carbon Fund, whose Secretariat is hosted by the World Bank. Several other countries are expected to finalize similar agreements with the Bank in the coming months.
    • Forest producers in the Dominican Republic are implementing sustainable practices that boost incomes for small and medium businesses. With support from the government and a grant for nearly US$4 million from the World Bank’s Forest Carbon Partnership Facility, foresters are also focused on planting endemic and native species, fire prevention, pest management, and erosion control. Local efforts like these underpin a national-level initiative that focuses on decreasing emissions from deforestation and degradation and helping the country become more resilient to the impacts of climate change.
    • Women have valuable experience in managing land use and water resources, and conserving forests and biodiversity, especially in fragile environments. Their knowledge is key to adapting to climate change. In Nepal, a team that works under the Ministry of Forests and Environment is identifying ways to make forestry programs more responsive to the needs of women and encourages women’s participation at all levels of government, civil society, and the private sector.

    Cities

    • The World Bank’s work on urban development has been instrumental in advocating for addressing climate change issues during COP21/22/23 and the One Planet Summit. In recent years, the World Bank has worked in cities and towns across over 140 countries, investing $5.3 billion during fiscal year 2018 in disaster risk management.
    • Since December 2017, through the City Resilience Program, the WBG has engaged over 50 cities to help them integrate climate resilience early on into their development planning. The WBG is also transforming the way we do business, and helping these cities to mobilize the additional capital required for key strategic investments.
    • Since its establishment in June 2017, the City Resilience Program (CRP) has worked with 57 cities in 39 countries, influencing 20 ongoing and future investment projects for a combined $2.3 billion ($1.3 billion IDA and $975 million IBRD).
    • CRP has delivered 13 City Resilience Scans which provide a series of maps, visualizations, and analysis which spatially lay out the city’s risk information and the built environment.
    • Urban resilience goes hand in hand with environmental sustainability. The World Bank’s Global Platform for Sustainable Cities (GPSC) is a partnership and knowledge platform that includes 28 cities across 11 countries that have received $151 million from the Global Environment Facility. This support has leveraged $2.4 billion in project co-financing. The platform promotes integrated solutions and cutting-edge knowledge for cities seeking to improve their resilience and overall urban sustainability in the areas of indicators and tools, integrated urban planning and management, and municipal finance
    • As part of its focus on cities, IFC’s EDGE (Excellence in Design for Greater Efficiencies) Green Building Market Transformation Program stimulates demand for green buildings and boosts the capacity of developers and banks to build and finance environmentally friendly construction. IFC’s total cumulative commitments for green buildings have now surpassed three billion dollars, including own account investments and mobilized financing. In FY18 IFC committed $1.1 billion of own-account in green buildings, in affordable homes, hospitals, and retail buildings, mobilizing an additional $260 million for a total of $1.4 billion.

    Innovative Partnerships

    • Officially launched at COP21, the Carbon Pricing Leadership Coalition (CPLC), an initiative that WBG helps convene and support, brings together leaders across national and sub-national governments, the private sector, and civil society with the goal of putting effective carbon-pricing policies that maintain competitiveness, create jobs, encourage innovation and deliver meaningful emission reductions.

    - During its High-Level Assembly in April 2018, CPLC launched the High-Level Commission on Carbon Pricing and Competitiveness. This initiative, co-chaired by Mr. Feike Sijbesma, CEO of Royal DSM and Anand Mahindra, Chairman and Managing Director of Mahindra Group, is working to understand some of the perceived barriers while also helping to identify the package of climate change policies that countries need to successfully transition to low-carbon economies.

    - With over 30 researchers and 150 participants from all over the world, the Coalition hosted the First International Research Conference on Carbon Pricing in February 2018. The conference brought together practitioners and researchers to take stock of the carbon pricing knowledge base and foster an improved understanding of the evolving challenges to its successful application.

    - CPLC supports the Carbon Pricing Dashboard, an interactive online platform that provides up-to-date information on existing and emerging carbon pricing initiatives around the world.

    - In 2017, the Coalition also supported the report from the High-Level Commission on Carbon Prices.

    Since 2010, the Partnership for Market Readiness (PMR) has been a forum for collective innovation and action and a fund to support capacity building to scale up climate change mitigation.

    PMR Participants include 19 developing countries that account for almost 40% of global GHG emissions and represent more than half of the world’s population and 23 developing countries that account for 40% emissions and represent 54% of the global population.

    Since 2014, there are now 14 carbon pricing instruments in place in PMR participant countries that make up close to ten percent of the world’s greenhouse gas (GHG) emissions.

    For example, with support from the PMR, South Africa passed a national carbon tax with a price starting at R120 (USD 8.20) effective from June 1, 2019. It is the first country in Africa to pass a national carbon tax.

    • The Connect4Climate (C4C) multi-donor trust fund aims to accelerate climate action by connecting over 500 partners through a global climate communications program. C4C engages diverse audiences, and young people especially, targeting influential industries such as film, fashion, music, and sport to popularize climate action.

    - In 2017, C4C led the Uniting4Climate communications campaign for COP23 to reach a global audience, including through a historical first live broadcast from Fiji, by highlighting the unified need and urgency for climate action.

    - C4C has developed Digital Media Zones to message climate action through innovative digital and multi-media communications and facilitated high-profile events, including IPCC’s 30th anniversary celebration in Bologna.

    - C4C’s feature documentary Youth Unstoppable premiered in 2018 aiming to energize the global youth climate movement through high-level screenings and engagements.

    - The X-Ray Fashion Virtual Reality installation, winner of C4C’s youth VR Pitch competition, was selected for the Venice Film Festival and highlights the social, environmental and climate impacts of the fashion industry.

    Last Updated: Apr 02, 2019

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In Depth

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IDA and Climate Change

IDA helps the poorest nations adapt to climate change by building their resilience to disasters, and promoting sustainable development to minimize their vulnerability.

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Carbon Pricing Leadership Coalition (CPLC)

The Carbon Pricing Leadership Coalition brings together leaders from across government, the private sector and civil society to share experience working with carbon pricing and to expand the evidence base for the most ...

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Climate Action Peer Exchange (CAPE)

Climate Action Peer Exchange (CAPE) is a forum for peer learning, knowledge sharing, and mutual advisory support. It brings together ministers and senior technical specialists from finance ministries across the world, as ...

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Connect4Climate

Connect4Climate is a global partnership program launched by the World Bank Group and the Italian Ministry of Environment, joined by the German Federal Ministry for Economic Cooperation and Development, that takes on ...

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Climate Investment Funds

The $8.3 billion Climate Investment Funds (CIF) is providing 72 developing and middle income countries with urgently needed resources to manage the challenges of climate change and reduce their greenhouse gas emissions.

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Forest Carbon Partnership Facility

The Forest Carbon Partnership Facility is focused on reducing emissions from deforestation and forest degradation, forest carbon stock conservation, the sustainable management of forests, and the enhancement of forest ...

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BioCarbon Fund Initiative for Sustainable Forest Landscapes

The BioCarbon Fund Initiative for Sustainable Forest Landscapes is focused on reducing emissions from the land sector through smarter land use planning, policies, and practices.

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Carbon Pricing Dashboard

This interactive dashboard provides an up-to-date overview of carbon pricing initiatives around the world and allows users to navigate through the visuals and data of the annual State and Trends of Carbon Pricing report ...

Additional Resources

Contact

Media Inquiries
Ferzina Banaji
fbanaji@worldbankgroup.org