Overview

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

    Climate change is becoming a potent driver of internal migration.

    • By 2050, according to the World Bank’s recently launched “Groundswell: Preparing for Internal Climate Migration”  report, more than 143 million people in three regions, Sub-Saharan Africa, Latin America, and South Asia, could be forced to move within their own countries to escape the slow-onset impacts of climate change, such as water stress and crop failure. 
    • With concerted action, including global efforts to cut greenhouse gas emissions and robust development planning at the country level – this 143m number could be dramatically reduced, by as much as 80 percent, or 100 million people.

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

    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. 

    Achieving the goals of the Paris Agreement will require coordinated global action at an unprecedented scale and speed.

    • The Sustainable Development Goals (SDGs) will only be achieved if tackled along with climate change. The world will soon need to feed 9 billion people while reducing emissions, provide electricity access to 1.1 billion people while transitioning from fossil fuels, and prepare for 2 billion new urban dwellers while reducing the carbon footprint of cities and improving urban resilience.   

    Policy action, including carbon pricing, can help create incentives for 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. According to the latest State and Trends report, eight new carbon pricing initiatives have been launched and two more initiatives are scheduled for implementation in 2018. This brings the total number of carbon pricing initiatives implemented or scheduled for implementation to 47. Overall, 67 jurisdictions—representing about half of the global economy and more than a quarter of global GHG emissions—are putting a price on carbon.
    • However, to shift investment at scale, carbon pricing coverage must expand, and prices must be stronger. Currently, 85 percent of all forms of carbon pricing sets the price at less than $10 per ton of CO2 equivalent.
    • The High-Level Commission on Carbon Prices, led by Joseph Stiglitz and Nicholas Stern, concluded in May 2017 that a carbon price of $40-$80 per ton of CO2 equivalent by 2020, increasing to $50-$100 per ton by 2030, would allow for the achievement of the core goal of the Paris Agreement – keeping the global temperature rise to below 2C.

    Last Updated: Apr 06, 2018

    • The World Bank Group (WBG) is more committed than ever to helping countries meet the climate challenge, financing on average close to $11 billion a year for climate-related operations. The WBG’s twin goals of ending extreme poverty and boosting shared prosperity cannot be achieved without tackling climate change.
    • In FY17 alone, the International Development Association (IDA), the World Bank’s fund for the poorest, provided more than $4 billion in climate-related financing to more than 140 projects. 
    • More than 135 developing and middle-income countries have submitted national plans for climate action under the Paris Agreement – the Nationally Determined Contributions, or 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.
    • The WBG has committed to increasing climate financing to 28 percent of the Bank Group’s portfolio by 2020, in response to client demand.  At current levels of co-financing, that would mean a potential $29 billion a year for climate projects by 2020.
    • The WBG Climate Change Action Plan lays out concrete steps to meet that commitment. It includes 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 partnership with the UN, the WBG has announced 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. 

    Last Updated: Apr 06, 2018

  • The World Bank Group has been moving quickly towards meeting these targets:

    • Between FY2011 and FY2017, the WBG committed $76 billion dollars, an average of close to $11 billion a year, to more than 1,200 climate-related projects that help countries adapt to a changing climate and mitigate the impacts of climate change.
    • 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 and IFC had issued a total of 103 green bonds worth over $7.25 billion.
    • The WBG is one of the largest providers of finance for renewable energy and energy efficiency projects in developing and middle-income countries. Between FY2014 and FY2017, the World Bank provided more than $9.5 billion in financing for renewable energy and energy efficiency. 
    • 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.
    • A $480m IBRD renewable energy guarantee is helping mobilize US$3.2bn in investment in the Argentine renewable energy sector. The project is expected to reduce GHG emissions substantially over 20 years. Benefits include reduced air pollution and fossil fuel use, and a more secure energy supply. The RenovAr renewable auctions, supported by this guarantee, are 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 7 USc/kWh in 2015) and decreasing with each round. This will help Argentina benefit from its abundant renewable resources and could ultimately help it achieve its target to produce 20 percent of its electricity from renewable sources by 2025.
    • 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 US$50 million from the private sector through a PPP structure. The BRT project also lays the foundation for technology upgrades. Senegal's Nationally Determined Contribution (NDC) in the Paris Agreement lists the BRT as central to reducing the country’s transport-related carbon emissions. The World Bank supports this project with US$300 million in financing from the International Development Association.
    • The World Bank’s growing partnership with India’s Energy Efficiency Services Limited (EESL) aims to help the country tackle its huge energy efficiency challenge, including through an LED light bulb distribution program that has driven down the cost of efficient lighting across India. EESL has already deployed more than 275 million energy-saving LED bulbs, avoiding 29 million tons of CO2 emissions equivalent per year. It has also distributed 4.2 million LED tube lights and 4 million street lights in municipalities. Now, India is looking to expand this same approach to high-efficiency air conditioners, agricultural pumps, and electric vehicles.
    • With the World Bank’s support, 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.
    • In São Tomé and Príncipe, the Global Facility for Disaster Reduction and Recovery (GFDRR) is supporting the government’s efforts to increase its adaptive capacity against threats like coastal erosion and sea level rise through activities such as high-resolution surface modeling for risk assessments, and enhancing capacity for resilience planning through grey and green infrastructure. These engagements are part of a large regional effort supported by the World Bank and the Global Environment Facility (GEF) through the $200 million West Africa Coastal Areas Management Program (WACA).
    • In March 2018, a $20 million grant was signed by Colombia’s President and the World Bank to help farmers in Colombia’s Orinoquía region sustainably increase agricultural production, including by planting trees, rotating livestock grazing and adopting climate-smart land practices. The program supported by the BioCarbon Fund Initiative for Sustainable Forest Landscapes aims to improve livelihoods, the economy, and the environment, including protecting the region’s precious forests, water sources, and biodiversity.
    • In Mozambique, the Integrated Landscape Program has leveraged almost $200 million to support sustainable forest management and land use from multiple private and public sources, combining International Development Association (IDA), Global Environment Facility (GEF), climate finance from the Forest Carbon Partnership Facility (FCPF) and the Forest Investment Program (FIP) and private investments together with national resources.
    • In Mexico, a program that leverages almost $500 million in World Bank financing is helping rural communities sustainably manage their forests and generate income from forest products, while reducing emissions. The program is designed to cover 30 million hectares, and more than 3,000 communities nationwide.
    • 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 February 21, 2017, Zambia’s Industrial Development Corporation (IDC) signed an agreement with IFC to develop up to 500MW of clean, renewable energy through two to four projects. 
    • 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. Through May 2016, over 260 buildings, totaling 15 million square meters, had met green building standards. This avoids 605,000 metric tons of greenhouse gases per year– the equivalent of removing 128,000 cars from the road.
    • Since 2010, the Partnership for Market Readiness (PMR) has been working alongside leading countries that see carbon pricing as a priority policy tool to tackle climate change. In the PMR, countries have a trusted partner to understand, test, and develop carbon pricing instruments to help achieve their climate change mitigation objectives. The PMR is at the forefront of facilitating the design and development of carbon pricing instruments in about 20 countries.
    • In 2016, parties to the Montreal Protocol agreed to phase down the production and consumption of HFCs, potent greenhouse gases used predominantly in air conditioning and refrigeration. The Bank Group supports this by helping countries phase down HFCs and improves energy efficiency in air conditioning and refrigeration.

    Last Updated: Apr 06, 2017

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Additional Resources

Contact

Media Inquiries
Elisabeth Mealey
emealey@worldbankgroup.org