The financing required for an orderly transition to a low carbon, climate resilient global economy can be counted in the trillions, not billions.
- Over the next 15 years, the world will require about $90 trillion in new infrastructure – most of it in developing and middle-income countries. Making the right choices in favor of infrastructure that is climate resilient and locks in a low carbon development pathway is critical and urgent. Action now will avoid huge costs later.
- The IEA estimates that limiting the rise in global temperature to below 2 Celsius by the end of the century will require an average of $3.5 trillion a year in energy sector investments until 2050.
Climate action is a vast opportunity for sustainable global development, with investment potential in the trillions of dollars and the ability to drive innovation and create green industries and new jobs.
- The IFC estimates that the NDCs of 21 emerging market economies alone represent $23 trillion in investment opportunities.
- According to IRENA, the global energy transition could contribute $19 trillion in economic gains by 2050.
- The shift to green jobs is underway – 2015 saw the number of US jobs in solar energy overtake those in oil and natural gas extraction. In China, there are 35 percent more people working in clean energy than in oil and gas.
- Countries are already decoupling growth from emissions. The IEA reported in March 2017 that global energy-related carbon dioxide emissions remained flat for a third straight year in 2016 even as the global economy grew.
To unlock these opportunities, we need a greener financial sector that systematically assesses climate risks and opportunities.
- Greening the financial sector will require greater transparency about climate risks, factoring climate opportunities and risks into decision making, and expanding the use of approaches such as green bonds, risk management instruments (for example, guarantees), and blended finance.
Climate-smart finance is critical to fighting poverty and meeting development goals.
- Without urgent action to reduce vulnerability, provide access to basic services, and build resilience, climate change impacts could push an additional 100 million people into poverty by 2030.
- The impact of extreme natural disasters is equivalent to a $520 billion loss in annual consumption and forces some 26 million people into poverty each year.
Concessional climate finance is essential to catalyzing private sector climate investment and introducing new technologies, as well as to boosting resilience and stability.
- The $8.3 billion Climate Investment Funds (CIF) have helped 72 developing countries pilot low emission and climate resilient development through country-led programs and investments.
- Financing of $917 million from the CIF’s Clean Technology Fund (CTF) is driving global investments in concentrated solar power that are expected to contribute more than a fifth of current global capacity.
The World Bank Group (WBG) is more committed than ever to helping countries meet the climate challenge.
- The WBG’s twin goals of ending extreme poverty and boosting shared prosperity cannot be achieved without tackling climate change.
- More than 140 WBG client countries have submitted national plans for climate action – the Nationally Determined Contributions, or NDCs.
- We are actively working with countries to help them deliver on and exceed their Paris ambitions, including through financing, technical assistance, and knowledge sharing.
Last Updated: Oct 04, 2017