Environment: Sector Results Profile

April 13, 2014


The vast mangrove forests of the Sundarbans, shared by India and Bangladesh, are among the world's richest and most unique ecosystems.

Arijit Banerjee for the World Bank

Environment is integrated into the World Bank’s knowledge work, policy dialogues, country and sector strategies, and investments. Support to climate change adaptation and mitigation increased on average more than five times in the last five years. The Bank has been one of the world’s largest supporters of biodiversity conservation and, over the last decade, has increased its contribution to pollution control and environmental health programs. Environmental policies and institutional frameworks were strengthened through policy loans. Progress has also been made in promoting healthy oceans and supporting enhanced decision-making through natural capital accounting.


Despite the progress in reducing global poverty in the past 15 years, there has been less progress in managing the environment sustainably. Pollution, overexploitation of fish stocks, biodiversity loss, and overuse of water and land threaten countries’ development efforts. The world’s population has grown larger and more prosperous. The global population of 6 billion in 2002 had already grown to 7 billion by 2013, and is projected to reach over 9 billion by 2050. 

Alongside population growth, there have been sizable gains in prosperity. More people have escaped poverty over the past 20 years than at any other time in human history. Global trade has more than tripled since 1992, while developing country gross domestic product (GDP) has doubled, allowing for a proportional increase in consumption. As a result, the agricultural foot print has intensified, leading to agrochemical pollution, soil exhaustion and deforestation. Food demand has also stimulated water withdrawals that have tripled over the last 50 years. Water withdrawals are expected to increase by 50 percent by 2025 in developing countries. Today more than half of the world lives in cities. Over 90 percent of all urban growth is occurring in developing countries and this has resulted in serious air and water pollution in many parts of the world. Carbon-intensive and often polluting industries have grown, contributing to climate change and natural resource depletion. 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. Current growth paths are clearly putting too much pressure on an already stretched environment. 


As overwhelming as the environmental challenge is, there has been a lot of collective progress on moving toward improved environmental sustainability.  As part of this global effort, the World Bank launched a new Environment Strategy  in 2012 to promote a green, clean and resilient world for all. The green agenda focuses on nurturing more inclusive growth, while protecting biodiversity and ecosystems by: 

• enhancing countries’ decision making through the Wealth Accounting and Valuation of Ecosystem Services global partnership that supports valuing countries’ natural capital assets and incorporating them into their systems of national accounts;
• finding ways to restore the world’s oceans to health and economic productivity through working with a broad coalition of governments, international agencies, nongovernmental organizations and private companies; and
• testing the market’s willingness to encourage protection of critical habitat areas while also providing carbon storage benefits through continuing innovative work on forests and land use linked to the Reducing Emissions from Deforestation and Forest Degradation program.

Under the clean agenda, the focus is on continued support to countries to find low pollution and low-emission development paths through:

• South-South exchanges on best practice for managing pollution;
• scaling up use of cleaner stoves to help reduce indoor air pollution;
• supporting countries on river cleanup and legacy pollution issues; and,
• improving energy efficiency, encouraging a shift to renewable energies, finding climate- smart agricultural solutions, and building cleaner, lower-carbon cities.

The resilience agenda aims at reducing vulnerability to climate risks through:

• supporting countries to find climate change adaptation solutions, such as better coastal zone management;
• minimizing the damage of natural disasters in terms of loss of life and structural damage;
• improving the resilience of small island states; and
• increasing the resilience of infrastructure and restoring protective coastal ecosystems such as mangroves. 


Some examples of results of projects achieved with International Bank for Reconstruction and Development (IBRD) andInternational Development Association (IDA) support include:

Greener and cleaner policies and institutions supported by policy loans. Average annual development policy lending (DPL) for environmental issues increased from US$438 million in FY04-08 to US$1.48 billion in FY09-13. For instance, the Peru environmental DPL program (2009-2013) supported the creation of the Ministry of Environment, the setting-up of the agency for national parks and its sustainable financial strategy, air quality monitoring networks, public disclosure of air quality information and the creation of the National Environmental Certification Service (SENACE) to evaluate detailed Environmental Impact Evaluations (EIAs) and act as a one window system for all environmental permits and licenses of investment projects. The DPL also supported a successful reform that established a quota system for managing overcapacity and inefficiency plaguing the anchoveta fishery, while supporting social protection for fishers.



Key funder for biodiversity conservation. In seeking to make biodiversity conservation and the sustainable use of nature financially sustainable and rewarding for impoverished communities, the World Bank has catalyzed public and private sector investment in rural communities. In Zambia’s Kafue National Park, the “Support for Economic Expansion and Diversification Project” that supported park authorities led to private investors tripling available tourism accommodations. Visits to the park rose markedly and park revenues grew ten-fold between 2005 and 2011, much of which directly benefited local communities. Similarly, in South Africa, through the Greater Addo Elephant National Park project (2004-2010), a US$5.5 million investment spurred US$14.5 million in private sector investment and the creation of 614 well-paying jobs. The Albania Natural Resource Development project saw incomes in project communities increase by an annual average of 8 percent (2005-2011). The Second Community Forestry Project in Mexico showed a similar trend between 2004 and 2008, as an estimated 6,200 people did not migrate from the project states as employment in the forest sector increased by 27 percent and the net value of forest goods and services grew by 36 percent.

Reduction in pollution risks and environment-related health issues. The Bank has continued to help client countries to reduce pollution risks and improve environmental health outcomes.  For example, in Bangladesh the Clean Air and Sustainable Environment project has, since 2010, been promoting cleaner technologies in the brick sector to improve urban air quality, revising laws to improve vehicular emission standards and promoting cleaner public transport; in industrial zones in Vietnam, the Industrial Pollution Management project, which started in 2012 is supporting the country’s efforts to reduce risks associated with pollution by enhancing monitoring and enforcement of environmental policies; and in Egypt, through the Pollution Abatement Project between 2006 and 2013, polluting brick kilns were converted to natural gas which reduced exposure of approximately 717,500 people to health-damaging particulate matter. In addition, the Bank is supporting countries to reduce risks associated with exposure to hazardous waste substances. One such project, the Argentina Mining Environmental Restoration project is helping the government to contain 700,000 tonnes of uranium tailings in order to prevent groundwater contamination, dust pollution, and radon emissions. By the end of 2013, approximately 40 percent of the uranium tailings have been encapsulated following best international practices. 

Significantly expanded the support provided to client countries in mitigation and adaptation to climate change and, disaster risk reduction. Climate change is a strategic priority for the World Bank Group. All country assistance and partnership strategies prepared for FY12 and FY13 for IDA countries include consideration of climate risk, and, in FY13, 80 percent included consideration of disaster risk. Stronger cross-sectoral efforts to incorporate climate- and disaster-resilient planning in country strategies include interventions in forestry, “climate smart” agriculture, food security, livelihoods, and water efficiency measures in urban and agricultural contexts. 

For example, a rural electrification program in Bangladesh has been installing more than 50,000 solar homes systems every month since 2002. The fastest-growing solar homes systems program in the world, this IDA-supported initiative has delivered off-gird solar power to 2.8 million households. The Bank has also supported the Government of Nepal to build more than 1,000 micro hydropower plants since 2007 that deliver clean, renewable power to communities in 52 districts across the country. The new source of electricity is bringing new jobs and economic growth to rural and impoverished parts of the country. And in Kenya, 60,000 smallholder farmers are now getting carbon credits for improved agricultural land management practices such as land rehabilitation, mulching, and less tilling which trap carbon dioxide in soil. They sell the carbon credits to the BioCarbon fund, earning a total of $65,000 so far. The Kenya Agricultural Carbon project (FY11-present), the first of its kind, has already increased crop yields by up to 20 percent.

The Bank is one of the biggest public investors in healthy oceans. Working with partners the Bank is supporting public investment in laws and institutions needed to enhance the value of ocean ecosystem services and avoid the marine tragedy of the commons. For instance, the Global Program on Fisheries (PROFISH) published more than a dozen major reports on fisheries and aquaculture topics, provided support to countries in all regions, and contributed direct advice to World Bank lending programs. Through the Integrated Coastal Zone Management project in India by June 2013 more than 9,000 hectares of mangroves have been planted, aerial photography of 78,000 square km completed, and more than 100,000 sea turtles protected. Also, under the same project work to stop the flow of more than 100 million liters of untreated sewage per day into the ocean has also started to protect over 150 km of shoreline in the Indian state of Odisha. 

Informed development planning analysis by helping countries to implement natural capital accounting (NCA). Through the World Bank-facilitated partnership—Wealth Accounting and Valuation of Ecosystem Services (WAVES)Botswana, Colombia, Costa Rica, Guatemala, Indonesia, Madagascar, the Philippines, and Rwanda have embarked on NCA. WAVES NCA will begin in Vietnam and Indonesia by the end of FY14, and additional countries identified for NCA, pending additional funds. Building on the broad interest in WAVES, the Bank launched the Natural Capital Accounting Initiative for Rio+20 in June 2012. By the end of 2013, 69 countries have signed the NCA Communique. Regional Communities of Practice will be launched in FY15 to support south-south learning and outreach to all the 69 countries.


Bank Group Contribution

Over the past decade, the Bank (IBRD/IDA) committed funding for US$33 billion, from which IDA’s contribution was US$7.7 billion (23 percent) to support investment in environment and natural resource management (ENRM). By far, climate change has been the fastest growing ENRM area where the Bank is supporting client countries. Other areas that have significantly expanded in the last five years are environmental policy and institutions, and water resource management. As for the types of funding provided over the decade, development policy lending accounted for 30 percent and investment lending 70 percent of the Bank’s ENRM portfolio. The trend is in favor of development policy lending that increased to 33% of the ENRM portfolio in the last five years (FY09-13).

In addition to funding ENRM projects directly, IDA has leveraged additional funds through the Global Environment Facility (GEF) and other agencies and organizations. Specifically, the GEF provides grants to IDA countries to address global environmental issues while supporting national sustainable development initiatives.


An important lesson learned is that partners are essential to face the environmental challenge because the agenda is huge and beyond the means of any single institution. Partnerships with multilateral funds such as the GEF and the Climate Investment Funds have focused on global and trans-boundary environmental issues. Close partnerships with civil society organizations have allowed a greater focus on biodiversity and social accountability in particular. Other trust funds have focused on key subsectors, such as the Program on Forests (PROFOR) or the Global Program on Sustainable Fisheries (ProFISH). Partnerships with the United Nations Environment Programme and the Food and Agriculture Organization of the United Nations (FAO) have allowed the Bank to broaden its analytical base. Perhaps most important, through the Climate Investment Funds the multilateral development banks are working in collaboration and demonstrating scaled-up climate action. Because the private sector plays a key role in creating jobs and technological development, it can contribute to sustainable development in ways that complement the public sector. Public-private partnerships are likely to continue growing in the near future because they are essential for achieving sustainable development in a fiscally constrained world. 

Moving Forward 

As the world becomes increasingly urbanized and the global population expands ever closer to 9 billion, the World Bank’s focus on improving environmental sustainability and building resilience to climate change will remain as strong as ever. Building on progress since the 2012 Environment Strategy, the Bank’s work will continue to focus on: 

• Climate change by increasing support to countries for low-carbon development efforts, and climate-smart agriculture, improving access of client countries to renewable energy, and incorporating climate-related disaster risk into development planning.

• Biodiversity by strengthening client countries’ systems to protect biodiversity and combat illegal wildlife trade and wildlife crime.

• Improving environmental decision-making by supporting countries to build institutions and enhance their capacity for environmental management, including efforts to improve generation of environmental and natural resources information so that countries are better equipped to make informed decisions. Through the WAVES partnership, the Bank will continue to support countries to incorporate environmental considerations into their national accounts. 

• Fighting pollution and improving environmental health by strengthening environmental health valuation analysis, enhancing environmental governance frameworks and policy tools, addressing environmental legacies, and improving nutrient management and control of agricultural run-off.

• Oceans by supporting countries to improve management of fisheries, protect critical ocean and coastal habitat and reduce sources of pollution entering waterways and oceans. 


In 2009, the fishery in Ngaparou in Senegal was on the brink of collapse due largely to a combination of over-fishing from artisanal fishing and added pressure of semi-industrial fishing vessels further offshore.  Every year, fewer and fewer fishermen were able to support themselves and feed their families.

The World Bank has been supporting West African governments since 2009 in their efforts to better manage the region’s rich natural resources through its West Africa Regional Fisheries Program (WARFP). The WARFP has supported Ghana, Cape Verde, Guinea-Bissau, Liberia, Sierra Leone and Senegal. The program supports a combination of regional cooperation, national reforms and local education and empowerment to help West African countries work together to manage their shared resources.

“In the beginning, the main objective was restoration of our fish,” says Issa Sagne, President of the Local Committee of Fishers of Ngaparou (CLP). “Now, the fish are really abundant. We know when people from other villages are fishing illegally in our area when they try to sell very large fish that can only be found here now.”

country environmental analyses (CEAs) have been undertaken since 2005 to strengthen environmental governance