Pollution, overexploitation of fish stocks, biodiversity loss, and overuse of water and land increasingly threaten countries’ development efforts. The immediate and long-term consequences of climate change—from a warmer planet to more-acidic oceans—further threaten progress on poverty reduction and development.
Environmental degradation also hampers economic progress. Lack of action to address health-impairing air and water pollution, for example, is costing some countries the equivalent of 4 percent of GDP or more a year. Policy failures account for many perverse incentives in the efficient use of natural resources, and without strong institutions and governance frameworks in place, taking action to reduce environmental risks has a low chance of success.
Between 2004 and 2013, the World Bank (IBRD/IDA) committed loans for $31.8 billion, from which IDA’s contribution was $7.7 billion, to support investment in environment and natural resource management. By far, climate change has been the fastest growing environment and natural resource management area the Bank is supporting in client countries.
A sizable portion (15 percent) of the Bank’s environment and natural resource management commitment went to environmental policy and institutions for improving governance and strengthening environmental policy and natural resource management. Other than climate change, the World Bank’s environment and natural resource management loans were directed in large part to water resources management (25 percent) and pollution management and environmental health (21 percent).