Climate Change

No country today is immune from the impacts of climate change.

• According to our research, climate change could drive 216 million people to migrate within their own countries by 2050, with hotspots of internal migration emerging as soon as 2030, spreading and intensifying thereafter.
• Climate change could cut crop yields, especially in the world’s most food-insecure regions. At the same time, agriculture, forestry, and land use change are responsible for about 25% of greenhouse gas emissions. The agriculture sector is core to addressing the climate challenge.

Reducing emissions and boosting resilience is possible, but requires major social, economic and technological changes.

Priorities for climate action also differ significantly across countries and across sectors.

The urgency and scale of the challenge requires countries to learn quickly from each other, adapt to their own special circumstances, and be bold in implementing policies that bend the emissions curve and improve livelihoods.

• The challenge for developing countries is they no longer have an opportunity to develop first in a high carbon-intensive way and then clean up and decarbonize later. They need support today to make investments now to slow a changing climate and enable billions to live safer, more prosperous, inclusive and sustainable lives.
• If they are well designed and implemented, the policies countries put in place for low-carbon, resilient growth could also help them address poverty and inequality.

The Bank Group has a clear role to play in supporting our client countries so that they are prepared for the low-carbon, resilient transition, enabling them to build climate-smart economies that are green, resilient and inclusive.

Last Updated: May 12, 2023

The World Bank Group is working with clients to address their climate and development needs together.

We do this through at-scale policy support that is tailored to client needs:

• supporting the implementation of Nationally Determined Contributions and Long-Term Strategies (NDCs and LTSs);
• and advocating for policy reforms and dialogue to support climate action and also make the private sector central to climate-friendly development.

We undertake cutting edge analytics, including our Country Climate and Development Reports (CCDRs).

• Over 25 CCDRs have been published to date. Taken together, CCDR low-carbon development strategies reduce emissions by 70%, without a significant impact on growth.
• These CCDRs cost countries on average about 1.4% of GDP, a manageable amount with support from the private sector. The cost for low-income countries exceeds 5% of GDP and that will require more support from rich countries.

We are the world’s largest financier of climate action in developing countries delivering over $31.7 billion in our fiscal year 2022.

We are aligning our financing flows with the Paris Agreement, which effectively mainstreams climate into everything we do.

At least 50% of all World Bank (IDA/IBRD) climate finance supports adaptation, recognizing mounting climate impacts especially on the poorest and most vulnerable (last year this translated into about $12.9 billion for adaptation alone).

We work to crowd in private finance, including through de-risking instruments and innovative approaches including sustainable bonds.

The World Bank Group is the largest issuer of sustainability bonds. IBRD has issued a total of $18 billion green bonds through 214 bonds in 26 currencies.

And we are supporting nature-based solutions such as forest conservation and restoration, protecting watersheds and habitats, reducing the risk of natural disasters, and protecting livelihoods. We are the leading multilateral financier for biodiversity, with $2.8 billion in direct investments during fiscal year 2022.

Last Updated: Sep 14, 2023

The World Bank Group is the world’s largest financier of climate action in developing countries, providing over $31.7 billion in our fiscal year 2022.

Selected sectoral results:

Energy

• In Ethiopia, the National Electrification Plan focuses on “last-mile service delivery” for households, schools and local health centers, with an emphasis on reliable and affordable access for all. The Bank is currently supporting the National Plan through a $375 million IDA credit that will help bring electricity to one million households, and pilot new approaches for off-grid electrification. In March 2019, Ethiopia launched an updated version of the Plan (NEP 2.0), which includes a detailed framework for the integration of off-grid technologies with grid connectivity to achieve universal access by 2025.
• The World Bank’s support to clean cooking totals more than $400 million in 21 countries—mainly in Africa and South Asia—helping 20 million people access cleaner and more efficient cooking and heating solutions.
• As part of a $775 million partnership, the $8.5 billion Climate Investment Funds is helping India expand its rooftop solar industry. In less than a year, the program has enabled close to 500 MW of new rooftop solar capacity. It is estimated that rooftop solar alone can save almost 2 billion tons of CO2 emissions and lead to nearly 50,000 jobs.
• In 2021, IFC supported one of India's leading renewable energy developers, Continuum Green Energy Ltd, to anchor its first green bond to help reduce greenhouse gas emissions and support a resilient recovery from COVID-19. The offering raised US$561 million and was heavily oversubscribed. Continuum is one of the largest providers of renewable power to corporates in the commercial and industrial sectors in India, with roughly 2 GW of wind and solar projects across the country. IFC's investment continues a relationship that began in 2014, when IFC financed Continuum's development of a wind farm in Madhya Pradesh.
• In the West Bank and Gaza, IFC and its development partners invested $18 million in a first-of-its-kind pioneering project to build solar arrays on top of 500 schools in the West Bank. This will provide 28 MW of clean electricity, enough to power the equivalent of 16,000 homes. IFC will also be providing a local currency loan to Massader to develop energy and infrastructure projects in the Palestinian territories.
• The Bank’s Carbon Initiative for Development (Ci-Dev) has emission reduction purchase agreements (ERPAs) for thirteen programs—twelve in Sub-Saharan Africa and one in Asia. Of these, six have had issuances of Certified Emission Reductions (CERs)—representing almost half of the portfolio.  In total they have achieved more than 360,000 tons of CO2 reductions through clean energy access programs ranging from low-carbon cooking programs in Lao PDR, Ethiopia and Madagascar, biodigester programs in Burkina Faso and Kenya, to solar energy and rural electrification programs in Ethiopia, Kenya and Uganda.
• In Uzbekistan, IFC committed a $17.5 million loan and a $17.5 million blended finance for the Navoi Scaling Solar project, a 100 MW solar PV plant. This is Uzbekistan’s first private sector infrastructure financing. IFC advised the government on the competitive bidding process, which resulted in the country procuring power at $2.679 cents / kWh for 25 years. The project is expected to start generating electricity in November 2021.
• In Nigeria, IFC committed a loan of up to US$20 million to Daystar Power to fund expansion of its operations in Nigeria. The Project is expected to increase reliability and affordability of electricity for customers who are currently facing unstable supply and will result in a reduction in GHG emissions and supports the decarbonization of the power sector, especially in Nigeria where an estimated 15GW of electricity is generated by diesel and petrol generators annually.

Adaptation and Resilience

• The Bank has committed to ensuring that half of our climate finance supports adaptation and resilience.
• The World Bank has scaled up analytical work and metrics related to adaptation and resilience.
  • The Resilience Rating System, being piloted in 20 IDA19 projects across all regions and covering a range of sectors, is helping us assess resilience across two dimensions: the resilience of a project’s design (whether it is resilient to risks from climate change and natural hazards); and the resilience gained through project outcomes (whether it builds the resilience of people and of the wider system). Based on the pilot experience, the method is updated and will be applied to IDA20 projects to support better resilience impacts of investment projects.
  • The Adaptation Principles report lays out 6 universal principles (along with 26 actions, 12 toolboxes and 111 indicators) to help policymakers plan for adaptation.
  • The flagship report “Lifelines: The Resilient Infrastructure Opportunity” makes the case for more resilient infrastructure systems to minimize the wide-ranging consequences of disasters on the livelihoods and well-being of people. Tools and approaches developed through the Lifelines research are already being applied in a number of countries that have sought specialized technical assistance on the subject.
  • A GFDRR report, “Frontline: Preparing Healthcare Systems for Shocks from Disasters to Pandemics”, is the first World Bank study offering recommendations to better prepare health systems to respond to a wide range of shocks, from seasonal demand surges, to pandemics, climate change, and disasters.

• Some highlights of work underway with support from Global Facility for Disaster Reduction and Recovery (GFDRR):
  • In Sri Lanka, a technical team is providing assistance to the government as it steps up its use of nature-based solutions as a cost-effective and eco-friendly measure for disaster risk management.
  • Eighteen countries are cooperating in the South-East European Multi-Hazard Early Warning Advisory System initiative which is designed to improve transboundary data exchange and prediction, with an eye to informing national forecasting and early warning systems on meteorological and hydrological hazards. Since the launch of the initiative, there has already been a 50 percent increase in regional data exchange.

Transport

In fiscal year 2022, the World Bank approved 40 new transport projects for a total of $8.2bn: all of these included climate co-benefits, which means they directly contribute to reducing countries’ emissions and/or enhancing climate resilience.

• In Dakar, Senegal, the Bank is working with partners to help develop a new transport system 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. Senegal's NDC lists the BRT as central to reducing the country’s transport-related carbon emissions.
• In Bangladesh, the Bank supported the development of the country’s inland waterway transport sector. Through a pilot exercise some of Bangladesh’s cargo transport along the Dhaka-Chittagong corridor is shifting to inland waterways which would reduce emissions in line with the country’s NDC, lower transaction costs for suppliers and improve the reliability and efficiency of freight transport in the country.
• Due to their size and location, Small Island Developing States are disproportionately affected by climate change. In a bid to enhance their overall climate resilience, the Bank has substantially increased assistance to the transport sector in many of these countries, with a clear focus on adaptation. For instance, the Pacific Climate-Resilient Transport Program is currently under implementation in Samoa, Tonga, Tuvalu, and Vanuatu, with more countries expected to join in a second phase.
• IFC partnered with ALD, a leading global vehicle leasing company and a subsidiary of Société Générale, to reduce carbon emissions in transport by accelerating the adoption and penetration of green vehicles in emerging markets. The US$400 million IFC investment will help ALD grow its green fleet, a combination of hybrid, plug-in hybrid and battery electric vehicles, in seven countries –Türkiye, Mexico, India, Serbia, Romania, Bulgaria, and Croatia. The financing, which was intermediated by Société Générale on behalf of ALD, is expected to add 15,000 green vehicles with the potential to reduce carbon emissions by 22,180 tons a year across the target countries by 2026.   

Food and Agriculture

Climate change and agriculture are closely linked. The fast pace of climate change is challenging farmers’ ability to adapt and cutting into their livelihoods. Agriculture is also a major part of the climate problem. Together with forestry and land use change, it generates up to 29% of total GHG emissions. 

• We are supporting a  $125 million project in Jordan which aims to strengthen the development the agriculture sector by enhancing its climate resilience, increasing competitiveness and inclusion, and ensuring medium- to long-term food security.
• In Bolivia, we are supporting a $300 million project that will contribute to increasing food security, market access and the adoption of climate-smart agricultural practices.
• The $2.3 billion Food Systems Resilience Program for Eastern and Southern Africa helps countries in Eastern and Southern Africa increase the resilience of the region’s food systems and ability to tackle growing food insecurity. The program will enhance inter-agency food crisis response also boost medium- and long-term efforts for resilient agricultural production, sustainable development of natural resources, expanded market access, and a greater focus on food systems resilience in policymaking.
• In Uruguay, since 2014, climate-smart agriculture techniques have been adopted on 2.7 million hectares and adopted by 5,541 farmers, providing for a carbon sequestration potential of up to 9 million tons of CO2 annually.

Forests and Landscapes

• The Forest Carbon Partnership Facility (FCPF) has now signed 15 Emissions Reduction Payment Agreements (ERPAs) with a total contract value of over $720m, committing to reduce emissions through reforestation programs by more than 145 million tons of carbon to 2025. The 15 FCPF countries are: Chile, Costa Rica, Côte d'Ivoire, Dominican Republic, DRC, Fiji, Ghana, Guatemala, Indonesia, Laos PDR, Madagascar, Mozambique, Nepal, Republic of Congo and Vietnam.
•  Results-based payments are now flowing from the FCPF: Mozambique, Costa Rica and Ghana have now received their first payments from the transaction of jurisdictional REDD+ certified emission reductions. These milestones signal that reductions in greenhouse gas emissions generated from forest conservation and other sustainable land uses have a central place in international carbon markets.
• For decades, illegal hunting and overfishing in Colombia’s Orinoquia region contributed to significant biodiversity loss. But leveraging financing opportunities can support new economic options for local communities, while also helping to preserve the enormous biodiversity, carbon and ecosystem value of the region. The World Bank’s BioCarbon Fund Initiative for Sustainable Forest Landscapes aims to support these efforts by building an enabling environment in Orinoquia for economic growth in harmony with environmental conservation.
• In Peru, the  Dedicated Grant Mechanism (DGM) project has supported Improvement of forest management in indigenous communities. The project has financed activities to reforest or improve the natural regeneration of forests, traditional agriculture, use and conservation of indigenous medicine, agroforestry to improve biodiversity and indigenous landscape management practices in Loreto, San Martin, Atalya, Madre de Dios and Ucayali. In addition, the project has supported the demarcation of 48 native communities; titled 42,280 beneficiaries and 212,486 hectares of native community lands in high threat areas, and  facilitated the  recognition process  of 217 native communities and their registration  the public registry.
• IFC has published first-to-the-market Biodiversity Finance Guidelines – a practical, hands-on reference for investors interested in entering the biodiversity finance space.  The Guide provides a clear classification of transactions that fit the definition of biodiversity finance, adding clarity and transparency to the heretofore vague regulatory environment.

Cities

As the world continues to urbanize, how cities are built and managed – especially over these coming two decades - will determine the trajectory of GHG emissions and safeguard development gains for future generations.

In recent years, the Bank has worked in cities and towns across over 140 countries, investing between $5 and $6 billion per year in urban and disaster risk management projects.

• The City Resilience Program (CRP) – a partnership between the Bank and GFDRR – is a multi-donor initiative for mainstreaming risk considerations in planning and increasing financing for urban resilience. As a starting point for engaging with cities to support them in effectively planning for resilience, the CRP has delivered 55 City 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 is a partnership and knowledge platform to promote integrated solutions and cutting-edge knowledge for cities seeking to improve their resilience and overall urban sustainability. The Platform includes 28 cities across 11 countries that have received $151 million from the Global Environment Facility and leveraged $2.4 billion in project co-financing.
• As part of its focus on cities, IFC analysis estimates that there is a $24.7 trillion opportunity in green buildings in emerging market cities to 2030 and showing how financiers, governments, developers and building owners can take the lead in shaping and accelerating this multitrillion-dollar business opportunity.
• IFC created the EDGE (Excellence in Designing Greater Efficiencies) program to respond to the need for a measurable and credible solution to prove the business case for building green and unlock financial investment. EDGE helps developers design buildings that reduce their buildings’ energy and water consumption by 20 percent while lowering GHG emissions. Through a cloud-based App, builders can assess these savings early on, and then make sure their buildings reduce energy and water use, in turn lowering the monthly utility bills for owners and tenants. EDGE is available in most countries and will soon be a global tool. As of November 2020, EDGE has certified over 14 million square meters of space, consistent with international financial and disclosure standards such as ICMA, Climate Bonds Initiative, EU Taxonomy, GRESB, and CDP.
• Since 2005, IFC has committed $4.2 billion to green buildings and mobilized $1.6 billion from other investors. IFC’s investments improve building efficiency, leading to cost savings and reductions in greenhouse gas emissions across homes, hospitals, commercial real estate, warehouses, and airports. In FY20, IFC committed $362 million of own-account in green buildings, mobilizing an additional $215 million for a total of $577 million.

Water and Waste

• In Brazil, IFC signed a $56 million green and sustainability linked A loan to Companhia Riograndense de Saneamento (Corsan) a state-owned water utility in June 2021. This is IFC’s first sustainability-linked loan in infrastructure in Latin America and second in the water sector globally. The investment will support Corsan's water loss program and energy efficiency improvement efforts through network replacement and substitution of obsolete electric pumps and hydrometers.  IFC has also worked with SABESP, one of the largest water treatment and sanitation companies in Brazil, to reduce pollution and improve water access and quality in communities alongside the Pinheiros River.
• IFC committed a $30 million loan (in local currency equivalent) to IZSU, the water utility of the City of Izmir, Turkey, in order to upgrade its water treatment and supply Infrastructure. This investment is the first sustainability-linked loan for IFC and first long term local currency loan to a Turkish municipal client from an international lender. The proceeds will be used for eight sub-projects in three areas, network pipeline construction, greenfield potable water treatment plant, and replacing and rehabilitating the water supply trunk. This will reduce wastewater collected in tanks, provide better quality drinking water, and improve water supply reliability. 
• In August 2020, IFC committed a $60 million investment in ALBA Asia Group which is a pan-Asia waste management and recycling company. The company focuses on waste treatment, bio waste management, plastics recycling, and smart city waste solutions. IFC’s investment will support eight waste and bio waste projects in China, mostly in frontier regions. It supports the WBG’s focus on promoting circular economy business models, in particular to help enhance environmentally sustainable waste management in the region.
• In Belgrade, Serbia, IFC and partners provided a €260 million package to transform the Vinča landfill into a new sanitary landfill, a waste-to-energy plant and a construction waste recycling unit. The project helps address the challenge of municipal waste management, curb air and water pollution, and contribute to the city’s electricity grids for the next 30 years.

Innovative Partnerships

• The Coalition of Finance Ministers for Climate Action is a global initiative that recognizes the unique capacity of Finance Ministers to address climate change and believes that progress can be accelerated through collective action and engagement.
  • The initiative was launched in April 2019 at the WBG and IMF Spring Meetings. The Coalition now has over 70 member countries and is supported by 25 Institutional Partners. Members collectively account for 39% of global greenhouse gas emissions and for 64% of global GDP. 
  • Coalition Members work together on the development of economic and financial policies that support low-carbon and climate-resilient growth. Its work is organized around the six Helsinki Principles that all member countries endorse upon joining the Coalition.
• Innovate4Climate (I4C) is the World Bank Group’s annual global conference on climate finance, carbon markets and climate investment. I4C brings together national and corporate leaders to foster the exchange of knowledge and best practices and promote investments in proven transformative climate-smart solutions.
  • I4C’s seventh edition – back in person – focuses on climate finance, carbon markets and just transition.

• The Partnership for Market Implementation assists countries to design, pilot, and implement pricing instruments aligned with their development priorities. Envisaged as a 10-year program with a capitalization target of US$250 million, the Partnership brings an ambitious and long-term vision for the viability of carbon pricing. It will support the direct implementation of carbon pricing in at least 10 developing countries and help a further 20 countries get ready to do so.
• The Climate Warehouse program prototypes, tests, and develops digital infrastructure to foster greater transparency, trust, and integrity in the carbon markets. The Bank’s Climate Warehouse program is working with public and private sector partners to build an end-to-end digital ecosystem and underpin the development of carbon markets. This initiative builds and pilots modular components of the ecosystem needed to digitize the generation, reporting, and transfer of carbon assets. Examples include the recently launched metadata platform to connect, harmonize, and aggregate carbon registry data (Climate Action Data Trust), digital MRV systems, national carbon registries, tokenization instruments, and a one-stop resource platform that enhances knowledge-sharing and capacity-building.

• The Connect4Climate (C4C) global partnership program of the Communications for Climate Change Multi Donor Trust Fund connects over 500 organizations to drive global and local climate action through advocacy, operational support, research and capacity building.
  • C4C is a key partner on the Italian Government’s Youth4Climate platform, which convened 400 global youth delegates for a landmark pre-COP26 event in Milan to draft the Youth4Climate Manifesto and continues to engage with these young climate leaders to drive ambition, power action, and spark solutions. Since the Youth4Climate 2022 flagship event in New York, C4C has been collaborating closely with UNDP and the Italian Ministry for Environment and Energy Security to promote a new Call for Solutions in the run-up to a special 2023 gathering in Rome.
  • Further supporting young climate leaders, C4C partnered with the Global Youth Climate Network (GYCN), an initiative of the Youth-to-Youth community, to select annual cohorts of Max Thabiso Edkins Climate Ambassadors, so named to honor the memory of beloved Connect4Climate ambassador Max Thabiso Edkins. The 2023 Ambassadors are now working to ramp up their climate action, develop novel solutions, and launch campaigns in their communities while engaging directly with Connect4Climate and GYCN, broadening their climate knowledge, strengthening their leadership skills, and engaging with GYCN’s ever-expanding network of young climate champions.

Last Updated: May 12, 2023